About 60 neurotechnology industry executives, investors, and entrepreneurs gathered in San Francisco earlier this month for the 11th annual Neurotech Leaders Forum, produced by Neurotech Reports, the publisher of this newsletter.

1. Industry Veterans and Newcomers Come Together at 2011 Neurotech
Leaders Forum
Staff report
About 60 neurotechnology industry executives, investors, and entrepreneurs gathered in San
Francisco earlier this month for the 11th annual Neurotech Leaders Forum, produced by Neurotech
Reports, the publisher of this newsletter.
Keynote speaker Kip Ludwig, newly appointed director of neural engineering at the National Institutes
of Health’s National Institute of Neurological Disorders and Stroke, gave attendees an overview of the
role that the NIH can play in the growth of the neurotechnology industry. Ludwig identified several
preconceptions that neurotech startups might confront when dealing with the NIH, including that the
agency is difficult to navigate, that it’s academic-oriented, that it’s biased toward pharmaceutical
interventions, and that it has strict eligibility requirements for funding companies.
Ludwig also spoke of three trends in the industry, including the shift in research and development
toward small business in order to limit risk, the move to European trials because of delays in the FDA
investigational device program, and the increasing cost and complexity of clinical trials. He offered
several examples of ways his office could mitigate these trends and preconceptions and offered to be
a voice within the NIH for the neurotechnology industry.
Reimbursement consultant Tom Hughes gave attendees an overview of new health care reform
legislation and how it stands to impact neurotech device manufacturers in the years ahead. While
there is considerable uncertainty as a result of a potential shift in political landscape, judicial review,
and provisions that have not yet taken effect, Hughes advised neurotech firms to be aware of what’s
in the law and be prepared to respond as needed to changes that take place.
Executives of several early-stage neurotechnology companies made presentations at the conference,
including Todd Langevin, president and COO of Functional Neuromodulation Inc., Andy Gotshalk, CEO
of Blackrock NeuroMed, Allen Braswell, CEO of Magneceutical Health, Ting Lu, president and COO of
eNeura Therapeutics, and Michael Russell, CEO of Aaken Insite, Inc.
Don Deyo, vice president of R&D at Medtronic Neuromodulation, gave attendees an update on new
technology being developed at the company. In the early days of neuromodulation, Deyo said,
clinicians used open-loop delivery of stimulation, then observed the outcome of the stimulation and
made adjustments. Medtronic is now seeking to tailor its therapies to each patient, using continuous

2. monitoring. He cited as an example the company’s adaptive spinal cord stimulation system, which has
sensors embedded that give feedback based on posture. “Physio logy, anatomy, and biomechanics all
come into play,” he said. Deyo also described a bidirectional neural interface under development at
Medtronic that clinicians can use to collect real -time brain signals as the deep-brain stimulation
system is delivering therapeutic intervention.
Medtronic has recently launched a program whereby clinicians can apply to receive an Activa PC+S
system for testing and research purposes. Selected recipients will get their devices in 2012.
The Activa PC+S is a new version of the Activa PC DBS system with technology enabling bi -directional
neural interfacing. In addition to supporting all predicate clinical therapy requirements for DBS, the
system is capable of real-time telemetry and chronic, ambulatory monitoring of bioelectrical activity
from electrodes, memory storage to save recorded sensed information for later download, and
flexible embedded algorithm processing for identifying and logging user-defined events. When
associated with a custom clinical programmer, the system allows for upload and display of recorded
information, as well as reconfiguration of sensing/algorithm parameters within the implanted device.
In a session devoted to the investment outlook for neurotechnology, venture capital professionals
offered their views on issues affecting the industry. Paul Grand, managing director of RCT BioVentures
in Los Angeles, CA, said his firm only invests in medical devices. The firm has a $150 million fund that
invests in the range of $2 million. “We like to be the first money in,” he said. RCT recently invested in
Stimwave, a developer of wireless implantable microstimulation devices that spun off from Arizona
State University.
Grand said he’s wary of startups that are top-heavy in management. “We’re looking for glorified
project managers,” he said, “not management teams with five titles that start with ‘chief,’” he said.
By contrast, Heath Lukatch, a partner at Novo Ventures in San Francisco, said that an experienced
management team is an important consideration for him when making investment decisions. Lukatch
also said his firm is very leery of regulatory risk and generally won’t invest before a device has market
approval.
The second day of the conference featured a focus on consumer and alternative markets for
neurotechnology. Alvaro Fernandez of SharpBrains gave an overview of the market for brain fitness
products. Victor Pikov of Huntington Medical Research Institutes offered his views on the shape and
design of consumer-oriented neural interfaces. Chip Fisher from Fisher-Wallace Laboratories in New
York City described his firm’s low-cost transcranial AC stimulation system, which is approved for
treating anxiety, depression, and related disorders. Allen Braswell of Magneceutical Health described

3. his company’s low-power magnetic stimulation system, which is targeted at complementary and
alternative medicine markets. The Magnesphere system, which sells for about $25,000 with a $12 to
$20 per-session fee, does not require FDA approval since it is intended to enhance feelings of
relaxation, and not intended to diagnose, treat, cure, or prevent any disease.
A session called “Panning for Gold: The Search for New Brain Biomarkers,” featured a presentation by
Philip Low of NeuroVigil, which has developed a wireless EEG system called iBrain. There was also a
session on neuromarketing, featuring a vendor and user of the technology.