Featured Image Source: Optogenetics and Neuromodulation

The neuromodulation market is a rapidly evolving segment of the medical device industry, expanding into emerging applications. From shifts in strategic investment to insights in technological advancements, this article covers recent sales trends and projections, neuromodulation VC fundings, as well as explores the emerging neurostimulation device recent headlines for the range of techniques and clinical applications. Strategy Inc. www.strategyinc.net offers a full suite of lifescience consulting services for essential financial and market due diligence, combining rigorous analysis with decades of industry knowledge. As neuromodulation is an area of focus for our business, and innovation in this space of significant interest, this article explores current trends in the business of emerging neuromodulation technologies.

Global neuromodulation markets are expected to reach $17.8B by 2027. Up from 2020 estimates of $7.8B, analysts also forecast a high compound annual growth rate (CAGR) during this period of 12.4%.1 The 2020 US neuromodulation market is estimated at $2.3B. China is forecast to reach a $3.1B projected market size by the year 2027 with CAGR of 12.1%. Japan, Canada and Germany are also forecasted to have high CAGRs for the 2020-2027 period, 11%, 10.6% and 9.1% respectively.1 As innovation unlocks opportunity for more clinical applications, growth in this market is inevitable.

Segmenting the market by neuromodulation technique, the global deep brain stimulation (DBS) device market segment is projected to reach $2.9B by 2027, increasing from 2020 estimates at a CAGR of 11.2%.1 The global spinal cord stimulation (SCS) market, estimated at $5.8B in 2020, is projected to grow at a CAGR of 8.6% (2020-2025).2 Lastly, the global vagal nerve stimulation (VNS) segment (for the US, Canada, Japan, China and Europe) is expected to drive a 9.3% CAGR, with a combined market size of $1.2B in 2020 and projected to reach $2.2B by 2027.1

Previously identified trends in neuromodulation development included miniaturization of devices capable of multiple waveforms with a longer battery life. These devices will continue to improve how the nervous system is modulated and interacted with to improve patient outcomes. The reduction in device size has been driven by the transition to minimally-invasive procedures and engineering technological advances. The market has responded with devices having a several-fold reduction in size, while increasing battery capacity and life. Furthermore, recent research has uncovered that glial cell function has a greater role in the central nervous system than originally thought, including links to Alzheimer’s disease. Targeting these glial cells is anticipated to open up expanded treatment options with glial cell stimulation and has become an area of significant interest for neuromodulation growth.3,4 Innovation surrounding the stimulation of glial cells shows promising results, and in one example, with Stimgenics (acquired by Medtronic January 2020), the potential to restore pain to a normal state versus masking the pain. Recent advances in closed-loop SCS systems to provide real-time monitoring and modification of stimulation parameters report improved treatment efficacy.5

Other recent advancements in neuromodulation and identified potential innovations include:6

  • MRI compatibility
  • Neural signal recording
  • Remote online programing
  • Variable frequency stimulation (combined high frequency and low frequency stimulation)
  • AI technique applications

The Covid-19 Pandemic Driven Neurotech Market Growth

The pandemic reportedly had a significant impact on the spinal cord stimulation market as many implant procedures are considered elective, thus they were put on hold. However, post-pandemic market studies anticipate 2021 will see a return to 2019 market numbers, with market growth in 2022, as shown in the chart below.7 Innovation driven by Covid-specific clinical needs led to the emergence of vagal nerve simulations (VNS) to alleviate respiratory systems and the use of phrenic nerve stimulation to wean patients off of ventilators is anticipated to continue growth.

Global Spinal Cord Stimulation Sales

In addition to these innovations, some identified areas of unmet need or growth potential include better delivery of larger macromolecular drugs and/or gene therapies directly to the brain. The potential for collaborations with pharmaceutical strategics will increase therapeutic opportunities. Furthermore, the market could grow significantly with expansion into major disease areas, with low profile, data driven devices. Imran Eba, Partner at Action Potential Venture Capital noted, “The size [of the Neurotech market] comes from the fact that you can charge a pretty high price per patient, but if you’re wanting to offer this to a much larger group of patients the idea is going after major disease areas with solid data and making the devices less invasive.”

CMS Rulings Drive Sales

Another factor that contributes to the US market is that medical device commercial success is driven by reimbursement. As with any medical device segment, emerging neuromodulation device adoption depends on private and public payor reimbursement. Emerging neurostimulator companies need not only to receive FDA approvals for their therapies but also a favorable coverage decision from the Centers for Medicare and Medicaid Services (CMS). Historically CMS ruled favorably for some technologies and denied coverage for others.8,9

Some noted recent reimbursement changes for neurostimulators include:

  • Proposed implementation of the Medicare Coverage of Innovative Technology rule, to provide four years minimum national coverage for FDA approved devices with breakthrough device designation – currently delayed until December 2021
  • CMS requires prior authorization for implanted spinal cord stimulators; the electronic exchange of healthcare data is anticipated to help streamline the authorization process
  • A 15% increase in payments to physicians for in-office SCS and PNS system trials; but a 7-8% reduction in facility reimbursement for both trials and permanent devices (2021)
  • In hospitals and ASC reimbursement for permanent PNS systems increased $1,000

CMS prior authorization rulings have received some pushback from neuromodulation vendors.

Investors and Entrepreneurs Saw a Change in Fundraising

One point of change is an increase in venture capital attention and funding in the neurotech space. Ana Maiques, CEO of Barcelona-based Neuroelectrics, whose non-invasive electro-stimulation headgear is being developed for the treatment of epilepsy and depression commented on her experience with this shift. “I think there are a number of reasons. Drugs haven’t been very successful in CNS for a long time. What is really exciting is that now the venture capital community I think is paying attention to CNS and in particular neurotech. …One sign that things are changing is that in November I raised a $17.5M Series A led by Morningside Ventures who is a traditional bio investor in this domain. So, this is a clear sign of how the investors are changing gears.”10

Additionally, there has been a shift towards SPAC (Specialty Purpose Acquisition Company) and IPOs. According to Jeffrey Cohen, seasoned MedTech analyst and Managing Director of Equity Research with Ladenburg Thalmann and Co, “Strategics continue to get hungrier and they have a lot more competition now. If I have something interesting, I can throw it into a SPAC or an IPO fairly swiftly and I can find the capital and I’m no longer a small company in need of the strategics.” Cohen later went on to share that in MedTech and healthcare, in the past six months more money has been invested in the stock market than in the past 10 years.

2020 Neuromodulation Venture Capital Funding

Serial successful MedTech entrepreneur Lloyd Diamond, identified a similar trend, “It’s only been over the last 12 months where a precommercial MedTech company could even imagine accessing the public markets.” Diamond is currently the CEO of Pixium-Vision, a Paris-based developer of an implantable retinal neurostimulator for dry AMD, enabling regain of visual perception. He goes on further to say, “What is even more interesting to me is some of these US investors are even willing to participate in funding a small public company on the French market, such as ours. I think so much money has been made in this sector, and investors need to put money to work, and when they see a technology that shows promise, targeting a very large disease state which today doesn’t really have any potential therapy, they certainly show interest.”

A few noted recent IPOs in neuromodulation include:

The Role of Neuromodulation is Expanding

The neuromodulation device market was founded for the treatment of chronic pain and neurological diseases. There is expansive potential for these devices due to the reported clinical improvements in nerve function.  Future research will be geared toward the stimulation effects of various electrical parameters as well as identifying target indications as seen in the recent emergence of expanding innovative neuromodulation solutions for indications such as depression, incontinence, obesity, and obstructive sleep apnea. Ana Maiques, CEO of Neuroelectrics, sees a shift in neurotech innovation. She says, “What is really exciting is that we are using brain models to personalize therapy…So, I think that neurotech is getting more sophisticated in terms of personalizing protocols for patients and you have the potential to record an EEG every time you deliver therapy.”

These indications are redefining and expanding the role of neuromodulation devices. There are large players in the market, such as Boston Scientific, Medtronic, and Abbott (acquired St. Jude Medical in 2016). Companies initiating entrance in this space should seek the advisement of medical device consulting firms to comprehend the competitive landscape as well as market trends and barriers. As illustrated by the Table below, competition varies between segments of the expansive market.

Overview of SCS and PNS Vendors

There are several proposed key drivers of continual growth of the neuromodulation market, identified by the Sachs 2021 Investment Trends in Neurotech & Diagnostics Panel and Scott Pantel, Founder and CEO of Life Science Intelligence. The aging population is one such driver in the US; according to the World Populations Ageing report the number of Americans age 65+, is expected to do more than double from 46 million in 2015 to over 98 million by 2060.11 These drivers include:12-14

  • Technological advancements increasing device potential to deliver therapeutic solutions
  • Innovation improving macromolecular drug delivery to the brain, especially those historically limited by the blood-brain barrier
  • Increasing population age and thus rising vulnerability to neurodegenerative diseases such as Parkinson’s and Alzheimer’s
  • Rising prevalence of chronic diseases and neurological disorders
  • Diagnostics capabilities of neurostimulation devices in monitor real-time treatment efficacy
  • Research expanding the range of potential clinical applications
  • Increasing awareness of neurodegenerative disorders

These market drivers coupled with the expansion of treatment indications, as well as technology refinement improving efficacy and lowering device profile suggest that the neuromodulation device market will remain a highly-innovative space in the medical device industry. It is essential that early-stage technologies seek the services of medical device consulting firms to receive essential financial and market due diligence, and receive guidance in forming optimal business plans and commercialization strategies in this rapidly evolving market.

Here at Strategy Inc., we can help you to determine the best inroads to market success for your emerging innovation in the neuromodulation market. We have been involved in supporting the commercialization of neuromodulation innovation for 20 years. We consider the practice patterns, treatment preferences and perceived hurdles to adoption, identified by clinical key opinion leaders and in-the-trench physicians, to determine the attributes of your technology anticipated to drive the highest level of adoption. We build this foundational diligence into go-to-market strategies in conjunction with robust competitive positioning analyses to identify niche market opportunities best positioned to leverage the unique value proposition of your technology.  Our recommended market diligence is designed around your technology and company specific needs to ensure you receive actionable diligence for entry into the expanding, though competitive, neuromodulation space.

For more information about how Strategy Inc can help you leverage the unique value proposition of your technology, please reach out to Nancy Patterson, CEO of Strategy Inc. since 2000 at info@strategyinc.net

While not exhaustive, the table below includes a range of neuromodulation devices identified in recent headlines for clinical or financial milestones achieved. These technologies are organized by neuromodulation device type, implantable and non-invasive, and cover target clinical applications. Lastly where available, the table include  recent and total fundraise figures, clinical trial milestones achieved and, in some cases, regulatory status.

Emerging Neurostimulation Devices with Recent Headlines                 www.strategyinc.net
Technique Indication Company/Device Milestones
Deep Brain Stimulation Epilepsy NeuroPace
NeuroPace RNS System
neuropace.com
California, US
  • 03/21: Filed IPO target of $75M upsized to proceeds of $102M
  • >3,000 patients had received its closed loop RNS system (12/20)
Neurodegenerative Disease Functional Neuromodulation
Vercis DBS Systems
fxneuromod.com
Toronto, Canada
  • 01/21: Breakthrough Device designation
  • ADvance II pivotal study currently enrolling
  • Received funding from Genesys Capital, Foundation Medical Partners and Boston Scientific
Newronika
AlphaDBS
newronika.com
Minnesota, US
Milan, Lombardia, Italy
  • First closed-loop deep brain neuromodulation system for Parkinson’s
  • Spin-off company of Fondazione IRCCS Ca’Granda Ospedale Maggiore Policlinico Hospital and the University of Milan
  • 02/21: AlphaDBS receives CE mark; first patient implanted with AlphaDBS
  • $11.1M raised over 3 rounds, including a Series A with lead investor Omnes Capital
Nia Therapeutics
Smart Neurostimulation
System
niatherapeutics.com
Pennsylvania, US
  • 05/21: Received $1M subcontract from US Army to complete development
  • Improves memory function
Migraine + Cluster Headache Unity HA
Pulsante SPG Microstimulator
unity-ha.com
Missouri, US
  • Stimulation of the sphenopalatine ganglion, battery-free device
  • 1/21 Results of double-blind RCT published in Lancet
  • 04/21: FDA has granted Breakthrough Device designation
  • Acquired Autonomic Technologies assets
  • Treated over 700 patients in US and EU
Traumatic Brain Injury (TBI) Michael Kahana and Team
USAMRDC project
University of Pennsylvania
  • 06/21: $3.4 Million Grant
  • Sponsored by the U.S. Army Medical Research and Development Command (USAMRDC)
  • Closed-loop brain stimulation
  • Builds on a recently completed $24.5 million DARPA-funded study
Sacral Nerve Stimulation Overactive Bladder (OAB) Axonics Modulation Technologies
Axonics r-SNM
axonics.com
California, US
  • r-SNM implantable neurostimulator and wireless patient remote control
  • 05/21: CE mark for Gen2 device
  • 05/21: FDA approval expanding MRI labeling
  • 05/21: $201.3M IPO
  • 2014 – 2021: Raised a total of $604.4M in funding over 9 rounds
  • 02/21: Acquires Contura, developer of Bulkamid, an FDA-approved treatment for stress urinary incontinence
BlueWind Medical
Renova iStim Leak
Fempulse Vaginal Ring
Neuspera SNS System
bluewindmedical.com
Israel and Utah, US
  • 3 Clinical trials for 3 devices, study being completed by UW Medicine; estimated completion date: December 2022
  • 06/20: $40M, Later Stage VC
Spinal Cord Stimulation Chronic Pain Boston Scientific
WaveWriter Alpha
bostonscientific.com
Massachusetts, US
  • 05/21: Best Overall Medical Device Solution MedTech Breakthrough Awards
  • 12/20: FDA approved
  • 10/20: Launched in Europe
Medtronic
Vanta SCS Neurostimulator
medtronic.com
Minnesota, US
  • Recharge-free, battery life of up to 11 years
  • 05/21: FDA cleared
  • 2021: Medtronic stock has risen 3.9% against the industry’s 1.9% drop
Nalu Medical
Nalu Neurostimulation System
Nalumed.com
California, USA
  • Also FDA cleared for PNS applications
  • 03/21 micro-implantable pulse generator received FDA clearance for an expanded service life of 18 years
  • 04/20 FDA clearance for MRI-conditional labeling for full-body 1.5T scans
  • 04/20 New CEO Earl Fender; Keegan Harper remains Chairman of the Board
  • Total funding $11.9M (2015) Advent Life Sciences and Stanford-Start-X Fund
Saluda Medical
Evoke Closed-Loop System
saludamedical.com
New South Wales, Australia
  • Investigational device in the US
  • 2015 – 2019: $124.5M in funding over 4 rounds
  • Redmile Group and Boston Scientific are the most recent investors
Chronic Low Back Pain Mainstay Medical
ReActiv8
mainstay-medical.com
Swords, Ireland
  • Stimulates nerves in low back for stabilization and for treatment of pain
  • FDA Approved
  • US commercialization to begin 1H 2021
  • 02/21: Closing of an equity financing: $108M
  • 03/21: Commercial launch in Australia
Spinal Injury ONWARD
onwd.com
Eindhoven, Noord-Brabant, The Netherlands
  • 01/21 Trial for non-invasive SCS IPG
  • Developing and commercializing innovative therapies to enable functional recovery for people with spinal cord injuries
  • Formerly GTX Medical
  • 04/21 raised $37M from Gimv and 5 other investors
  • Total investment $73.1M
Vagal Nerve Stimulation Autoimmune disease SetPoint Medical
VNS MicroRegulator
setpointmedical.com
Valencia, CA
  • Total investment $216.4M in 10+ rounds including $64M 1/21 lead by NEA. Other recent investors include SVE Capital, Topspin, Morgenthaler, Shangbay Capital
  • 01/21 RESET-RA Clinical trial for chronic inflammation-mediated autoimmune disease – initially for RA 250 patients at 40 sites
  • FDA Breakthrough Device Designation
Peripheral Nerve Stimulation
Technique Indication Company/Device Milestones
Carotid Artery Baroreceptor
Stimulation
Heart Failure CVRx
Barostim Neo
Implantable baroreflex activation therapy
cvrx.com
Minnesota, US
  • 6/21 filed for $75M IPO
  • Booked $7 M in sales for the 12 months ending March 31, 2021
  • 2020: Secured reimbursement with CMS
  • FDA Breakthrough device designation
High Frequency Nerve Block Post-amputation Pain Neuros Medical
Altius System High Frequency Nerve Block
neurosmedical.com
Ohio, US
  • 01/21: $38.5M in Series BB Funding for Completion of Pivotal Clinical Study
  • Raised $34M (2018) + $20M (2017)
Hypoglossal Nerve Stimulation Obstructive Sleep Apnea (OSA) Inspire Medical Systems
Two-Incision Implant
inspiresleep.com
Minnesota, US
  • 03/21: FDA approval
  • Raised $186M in funding over 6 rounds
  • 12/18: $75M, Post-IPO Equity
  • Revenue: $115.4 million (2020)
Nyxoah Genio
Bilateral hypoglossal nerve stimulation
genio.nyxoah.com
Mont-Saint-Guilbert, Belgium
  • Genio system better sleep trial in Australia reached primary endpoints
  • CE mark and FDA approval for MRI compatibility
  • 01/21: DREAM pivotal IDE study underway
  • 02/21: Exclusive licensing agreement with Vanderbilt University
  • 09/20 Oversubscribed IPO of $85M on Euronext Brussels
  • Revenue was $224,000 for the three months ended March 31, 2021
Phrenic Nerve Stimulation ZOLL Medical
remedē System
Transvenous phrenic nerve stimulation
zoll.com
Massachusetts, US
  • Implantable device approved by FDA
  • 04/21: Acquired 13 organizations including Respicardia and its neurostimulation technology for treating sleep apnea
  • 2021: Over $500M in revenue
PNS Chronic Nerve Pain BioVentus
StimRouter PNS System
bioventus.com
The Netherlands and
North Carolina, US
  • 3/21: Acquired Bioness, Inc. for $45M in up-front consideration, with up to $65M of contingent consideration
  • 2021: Net Income of $24.5M, up $14.0M, or 133.9%, year-over-year
Retinal Nerve Stimulation Dry AMD Pixium Vision
pixium-vision.com
Paris, France
  • Bionic vision for lost sight, enabling regain visual perception
  • Prima retinal implant system for dry AMD nearing end of Phase 2
  • 7 patients implanted US/EU with positive endpoint results
  • Final pivotal study underway in EU
Tibial Nerve Stimulation Overactive Bladder (OAB) Valencia Technologies
eCoin
valenciatechnologies.com
California, US
  • Also indications for median nerve stimulation in the forearm for hypertension
  • $11M total funding over 4 rounds
  • 11/19 Most recent fundraise – $4M
  • 03/18 FDA investigational device exemption approval to launch a pivotal trial of its eCoin in OAB
Non-implanted Neurostimulators
Technique Indication Company/Device Milestones
Cardionomic Pulmonary Neuromodulation System Chronic Heart Failure Cardionomic
Cardionomic Pulmonary Neuromodulation System
cardionomicinc.com
Minnesota, US
  • 04/21: Pilot Study, initial enrollment
  • 02/21: Later Stage VC (Series A2): $15.8M
Cranial Nerve Innovation Gait deficit in MS Helius Medical Technologies
Portable Neuromodulation Stimulator (PoNS) Device
heliusmedical.com
Pennsylvania, US
  • Raised a total of $68.9M over 10 rounds
  • 01/21: $11M, Post-IPO Equity
  • 03/21: Authorized marketing for use as a short-term treatment of gait deficit due to MS
Deep Transcranial Magnetic
Stimulation (TMS)
Depression, OCD Brainsway
Theta Burst
brainsway.com
New Jersey, US
and Jerusalem, Israel
  • 04/21: Granted 510(k) clearance
  • 100,000 patients have been treated with its Deep TMS therapies to date
  • > 620 TMS systems are in place in 22 countries
Kinetic Oscillation Stimulation Chronic Migraine, Chronic rhinitis Chordate Medical
chordate.com
Kista, Sweden
  • Received CE marking even before migraine study was completed
  • Planning to launch in Italy, Nordic countries, and Israel
Magnetic Stimulation Pain Management NeuraLace Medical
Axon Therapy
neuralacemedical.com
California, US
  • Post-traumatic peripheral neuropathic pain
  • Investigational use only, not for sale in the US – clinical study phase
  • 06/19: $3M additional funding
Multichannel brain Neuromodulation (occipital and trigeminal nerves) Chronic Migraine Neurolief
Relivion
Multi-channel brain neuromodulation system
neurolief.com
Netanya, Israel; Florida, US
  • 02/21: FDA clearance
  • Fall 2021: planned entrance into the US market through a limited market release
  • 2022: Planned full market release
Percutaneous Tibial Neuromodulation (PTNM) Overactive Bladder (OAB) Medtronic
NURO System
medtronic.com
Dublin, Ireland
  • 05/21: TITAN 1- A prospective, multicenter, feasibility study
Transcutaneous Electrical Nerve Stimulation Epilepsy, Depression Neuroelectrics
Starstim – neurostimulating electrical headcap
neuroelectrics.com
Barcelona, Spain
  • 05/21: Raised $17.5M in Series A
  • Developing platform into clinical trials
  • Recently ran a pilot study; Based on Phase III trial results will submit to FDA
Opioid Withdrawal Syndrome Spark Biomedical
The Sparrow
Therapy System
sparkbiomedical.com
Texas, US
  • S. Patent for use of neurostimulation in treating substance use disorder
  • 05/19: Grant round raised a total of $50k, (1) Funding Round
Vagal Nerve Stimulation Chronic Migraine electroCore
gammaCore
electrocore.com
New Jersey, US
  • Successful study involving gammaCore device, published in NPJ Parkinson’s Disease
  • FDA cleared and CE-marked
  • 05/21: Q1 revenue of $1.2M, 64% increase over 2020 and 30% sequentially
  • 06/21: To join Russell Microcap Index
Vibro-tactile Wrist Stimulation Hand tremor (Parkinson’s, Essential Tremor) Encora Therapeutics
AI-powered wearable
encoratherapeutics.com
Massachusetts, US
  • 03/21: Breakthrough Device designation, patent-pending AI-powered tremor reduction wearable
  • 09/20: $1.5 million in pre-seed funding
  • Senses wrist essential tremor severity and introduces personalized vibro-tactile stimulus

References

1 www.globenewswire.com/news-release/2021/01/20/2161603/0/en/Global-Neuromodulation-Industry.html

2 Neuromodulation Market by Technology- Internal (Deep Brain Stimulation, Vagus Nerve Stimulation), External (Transcranial Magnetic Stimulation), Application (Ischemia, Chronic Pain, Parkinson’s, Depression, Tremor, Epilepsy, Migraine) – Global Forecast to 2025

3 Scientists Discover New Architecture of Cells That Are Linked to Alzheimer’s. Nicholas Chan. March 23rd, 2020  https://www.beingpatient.com/scientists-discover-role-glial-cells-alzheimers/ 

4 Ruiz-Sauri, A et al. Glia to neuron ratio in the posterior aspect of the human spinal cord at thoracic segments relevant to spinal cord stimulation. Journal of Anatomy, Vol 235, Is 5. Nov 2019.

5 Provenzano DA, Heller JA, Hanes MC. Current Perspectives on Neurostimulation for the Management of Chronic Low Back Pain: A Narrative Review. J Pain Res. 2021;14:463-479 https://doi.org/10.2147/JPR.S249580

6 Sui Y, et al. Deep Brain Stimulation Initiative: Toward Innovative Technology, New Disease Indications, and Approaches to Current and Future Clinical Challenges in Neuromodulation Therapy. Front. Neurol., 28 January 2021 https://www.frontiersin.org/articles/10.3389/fneur.2020.597451/full

7 The Market for Pain Neuromodulation: 2021-2026, Neurotech Reports

8 CMS Giveth and CMS Taketh Away. James Cavuoto https://www.neurotechreports.com/pages/publishersletterApr21.html

9 Crotti, N. CMS delays Medicare payments for breakthrough devices until December. May 17, 2021. https://www.massdevice.com/cms-delays-medicare-payments-for-breakthrough-devices-until-december/  

10 https://www.massdevice.com/neuroelectrics-raises-17-5m-series-a/

11 United Nations, Department of Economic and Social Affairs, Population Division (2019). World Population Ageing. 2019: Highlights (ST/ESA/SER.A/430).

12 https://www.businesswire.com/news/home/20200319005372/en/8.8-Billion-Neuromodulation-Market-2020-to-2025—
Expansion-in-Emerging-Economies-Presents-Opportunities—ResearchAndMarkets.com

13 Investment Trends in Neurotech & Diagnostics Panel, Sachs TV, May 27, 2021 https://www.youtube.com/watch?v=uiSXeCLOyQs&t=3293s

14 Scott Pantel from LSI