Device Investors Look for Gains in Pain
This article was originally published in Start Up
In 2009, investors quietly invested in seven different start-ups develoipng devices for pain. Why the sudden interest? Interventional pain is on the rise as a specialty, large numbers of patients with chronic pain need better therapies, and relative to other emerging device sectors, pain offers large markets but lower clinical, regulatory and market risks.
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Nothing has arguably hurt pharmaceutical investors and dealmakers quite so often and with such force as novel pain drug development failures. As a result, a once hot field has gone cold. Despite setbacks, great strides have been made in understanding the complex biology of pain. Scientists have discovered numerous new pain pathway targets with the potential for designing effective agents with fewer off-target effects. Improvements that make preclinical studies more predictive of clinical success are also opening up new opportunities. At the same time, drug developers now understand better how to design drug trials that can segment patient populations to demonstrate therapeutic efficacy more precisely, potentially reducing placebo effects and paving the way for an era of personalized pain medicine.
The neurostimulation market is becoming electric for many large companies looking for major growth opportunities. Worth $1.3 billion in the US in 2009, the neurostimulation market is expected to grow to $2.7 billion by the year 2014. Those robust figures take into account some fourteen different clinical product categories, some of the largest being Alzheimer's disease, chronic pain, depression, epilepsy, obstructive sleep apnea, obesity, and stroke. In fact, that's the beauty of neurostimulation for medical device companies: it offers a single platform technology that can be leveraged over multiple, large product areas. But what model most efficiently helps a company with core expertise in neurostimulation - the knowledge of impulse generators and leads and their interface with nerves, power sources, and controllers - leverage that knowledge over numerous product areas? NDI Medical has its own strategy with a for-profit incubator solely focused on neurostimulation.
Implantable neurostimulation devices have the potential to ameliorate a number of debilitating conditions in which neural pathways play a role. Combined, these applications are expected to bring in device revenues of nearly $1.4 billion in the US alone in 2010, and that number is forecast to increase by double-digits going forward, reaching over $2.6 billion by 2014, according to Medtech Insight's recently published report, "US Markets for Neurostimulation Products."