PMA approval process is now required by FDA for Cranial Electrotherapy Stimulator devices

In order to use a medical device in the US, a device manufacturer has to get an approval from FDA. Invasive devices, such as neural implants, are classified as Class III and can be approved in one of two ways: 1) a comprehensive “de novo” Premarket Approval (PMA) or 2) a streamlined 510(k) clearance, also called a Premarket Notification (PMN), when the device is “substantially equivalent” to an existing approved device. The complete device development and approval process takes 4-10 years and costs $5-300 million depending on the complexity of the device and FDA approval process. Approximately 40 PMAs and 3,000 510(k) clearances are approved each year by the FDA.

Cortical and spinal neural implants are among the most invasive and, therefore, always require a PMA approval. In comparison, the “Cranial Electrotherapy Stimulator” (CES) devices, are implanted under the scalp and pose fewer surgical risks. Until recently, they required only a 510(k) clearance, and such relaxed approval process resulted in their multiple applications for neurological and psychiatric disorders, such as anxiety, depression, insomnia, chronic pain, and migraine.

In August 2011, FDA proposed a new rule to require PMAs for CES devices, and the device makers responded by proposing instead that the devices be given less stringent Class II status, which often does not require PMA approval. In February 2012, the Neurological Devices Panel of the Medical Devices Advisory Committee at the FDA advised against such downgrade, so the CES devices would still require a lengthy and expensive PMA process. According to recent estimates, an average PMA approval process would take ~27 weeks and would cost the CES device makers an additional $1 million, as compared to 510(k).

NeuroNexus acquisition by Greatbatch: silicon-based probes are getting closer to clinical market

In recent years, the medical manufacturing company Greatbatch Inc. has made several steps indicating its ambition to become a major player in the neuroprosthetic device arena, currently dominated by Medtronic, St. Jude, and Boston Scientific. Until recently, Greatbatch’s two subsidiaries, Greatbatch Medical and Electrochem Solutions, were mostly known for producing the pacemakers, vascular catheters, orthopedic implants, leads, and batteries. The company does not market any neurostimulation devices, although several other manufacturers use Greatbatch’s batteries and leads in their neuromodulation implants (e.g. obstructive sleep apnea device by Inspire Medical). In fact, 95% of all pulse generators worldwide contain at least one Greatbatch’s component. In 2008, Greatbatch created the QiG Group, its third subsidiary, with a goal of making targeted investments in innovative cardiovascular catheters and neuromodulation devices. Last year, QiG has started the Algostim brand of spinal cord stimulation devices to treat chronic pain, The QiG has also invested, along with Boston Scientific, into Intelect Medical, an early-stage company developing deep brain stimulation devices for traumatic brain injury, and stroke. And most recently, on February 17, 2012, Greatbatch’s QiG Group announced its acquisition of NeuroNexus for $12 million. Dr. Daryl Kipke, NeuroNexus President and CEO, indicated that its technologies would be used to develop novel “neuromodulation clinical therapies”. It remains to be seen whether the Greatbatch’s definition of “neuromodulation” will be modified, as the key NeuroNexus technologies, the high-density silicon-based electrodes and their interconnects, are more suited toward neuroprosthetic rather than neuromodulation therapies. But, in any case, this news brings us one step closer to a long-awaited clinical trial of probes developed using the semiconductor microfabrication technologies.

Consumer-oriented neural interfaces for non-medical applications

As documented in other posts on this blog, mutliple neural prosthetic devices are currently being developed by startup companies throughout the US, Europe, and Asia. Practically all of these startups are pursuing the well-established R&D strategy of building a device to treat a specific neurological disorder and going through a lengthy process toward eventual FDA approval and reimbursement by private and government-run health insurance companies. In following with this R&D strategy, the resulting device is usually fully implanted and contains only the circuitry needed for its primary function to treat a specific disorder. The device is designed for autonomous operation without user accessibility, and any device’s software tuning/upgrade requires a physician and specialized clinical equipment. These features are aimed at limiting the manufacturer’s and surgeon’s liabilities.
Here, I would like to propose a possibility of developing the consumer-oriented neural interfaces. Such a strategy is inspired by recent developments in the consumer electronics industry and, particularly, by a wide adoption of body-worn health monitoring gadgets (such as a sleep sensor Lark, EEG monitoring device Mynd, and muscle stimulator Compex). The proposed new strategy requires a fundamental shift in the user attitudes toward body-worn neural interfaces. Instead of treating the neural interface as a “band-aid” for restoring the lost or damaged neurological function, the users would treat the neural interface as a sensory or motor extension of their existing own nervous system. The following table illustrates the key attributes that differentiate a conventional neurological treatment device from a consumer-oriented device:

Attribute Conventional device Consumer-oriented device
Usage Repair of lost/damaged neural functions Enhanced use and preventing the decay of existing neural functions due to Alzheimer’s
Customer Hospital, doctor End user
Reimbursement Health insurance company End user
Implanted components Electrodes, active electronics Electrodes only (minimally-invasive placement)
Body-worn interface (BWI) Telemetry for battery re-charging and data input/output User-controlled multi-purpose graphical computer interface
Placement of BWI Inconspicuous or hidden from view Prominent
Operation of BWI Primarily by a physician By the end user
Communication with other devices None (standalone use) Standard wireless protocols (Bluetooth, WiFi, 3G)

 

As can be seen in the table above, the fundamental changes in the R&D strategy relate to every aspect from the device marketing to its configuration, operation, and user control. The reduced complexity and size of the implanted device are crucial for allowing a minimally invasive implantation that can be performed by a neurologist (rather than a neurosurgeon) in an outpatient clinic. Fabrication of a simple implantable device combined with a simple surgery can dramatically reduce the overall user cost (perhaps to a sub-$10,000 level) and therefore make the devices applicable for non-medical applications, such as memory improvement, cognitive training, and around-the-clock personal assistance.

Continuing the parallel with the consumer electronics, let’s think for a moment about our computer use just 10 years ago. The computers back then could serve specific functions, such as data entry, word processing, accounting, etc. Our everyday lives, however, have been rather “un-tethered”, as we lived our lives oblivious to a possibility of having constant access to our email inbox or a Facebook status. There is no denying, that we are evolving into a new social species, the “homo twitterus”, with the reported ~60% of smartphone users waking up voluntarily during the night to check their messages. Let’s compare that with our evolving attitude toward the neural interfaces.  In the classic SciFi movies Star Trek: First Contact (1996) and The Matrix (1999), a images of the brain and spinal interfaces were positively repulsive. A decade later, in the movie Tron: Legacy (2010), the Identity Discs worn by the Grid inhabitants, prominently featured on their back, appear rather attractive and stylish. The public interest in the consumer-oriented neural interfaces may start initially among the techno-gadget aficionados and gradually spread to general population. Similar evolution has occured with the computer use and has now reached the stage where pure functionality and low cost of the device are no longer as important as its esthetic, social-status, and “coolness” appeal (think of Apple’s Macbook Air, iPad, and iPhone). While many Android phones are arguably more feature-rich and less expensive than iPhone 4S, Apple Inc. is enjoying robust growth by strengthening its deep personal relationship with customers and by changing their lifestyle in a profound way. The proposed consumer uses of neural interfaces can bring such device-user relationship to a whole new level, with the person’s everyday life being dependent on bidirectional exchange with their body-worn personal assistant. A rich virtual environment provided by the neural interface can be used, for example, by retired baby-boomers for muscle exercise and rehabilitation; memory improvement and cognitive fitness; and learning of visual and motor skills (e.g. golf, tennis, driving). Many other applications, perhaps even more pervasive and lifestyle-changing (such as novel sensory/motor modalities), could emerge as the neural interface technology takes hold in the society.

Occipital nerve stimulation for migraine

Migraine is a highly prevalent neurological disorder, affecting more than 10% of people (6% of men and 18% of women) worldwide. It is not surprising, therefore, that all three of the major neurotech device manufacturers, Medtronic, St. Jude Medical, and Boston Scientific, have evaluated their implantable stimulators for treatment of his chronic condition. Multiple areas have been targeted for treating migraine; with most common ones being the occipital nerves and the cerebral cortex. The latter approach is usually accomplished non-invasively with the transcranial magnetic stimulation and is most helpful for patients whose migraines begin with an aura, a condition characterized by flashing lights or other visual (or sometimes sensory, motor or verbal) disturbance. The occipital nerve stimulation is more generally applicable to migraine sufferers, and involves a chronic implantation of the stimulating device. The clinical trials have been performed to see whether any of the devices could clear at least one of two FDA-mandated thresholds: a 50% reduction in migraine severity or a 50% reduction in migraine frequency. Boston Scientific’s pivotal trial PRISM was completed in 2009, showing no significant improvements. Medronic’s pivotal trial ONSTIM was completed in 2010, indicating that 39% of patients achieved 50% reduction in migraine frequency. St. Jude Medical’s pivotal trial ended in June 2011 and was, perhaps, the most successful of the three: they reported an overall 28% reduction in migraine frequency and 42% reduction in migraine severity. Although these results are insufficient for the FDA clearance, the St. Jude Medical’s Genesis device was able to receive the European CE mark approval  in September 2011. This gives the first-mover advantage to St. Jude Medical in Europe, but the battle for the lucrative US migraine market is still waging on.

China emerges as a global maker of neurotech devices

One does not need the future-telling skills of Ray Kurzweil to predict the rise and eventual dominance of China in manufacturing of neurotech devices. Outsourcing of medical device manufacturing to China has been on the rise in the last few years as evidenced, for example, by a reduced US export-import surplus for medical devices from $6 billion in 2005 to $3 billion in 2010 (according to US officials), of which $1.2 billion is the trade surplus with China. The market for medical devices in China is at $14 billion and is projected to double by 2014. The rise in China’s medical device market is fueled by an ongoing government-funded healthcare reform ($123 billion over the next four years), which aims, among other things, to make medical devices affordable by subsidizing their domestic manufacturing. The importance of such governmental  subsidies can be illustrated by the stunning revelation that in 2008 the number of cardioverter-defibrillator implants in China was fewer than 700 compared with 100,000+ implants annually in the United States.

Unlike the biomedical device industry as a whole, the implantable neural device industry has so far been resilient to migration to the land of rising dragon from its birthplaces in the US, Europe, and Australia. There are multiple reasons for that, which perhaps could be better explained by an economist. In my view, there had been two key obstacles: 1) assuring the regulatory conformance of the China-assembled medical device in the western countries; and 2) poor protection of intellectual property rights in China, making western device makers uneasy about sharing their fabrication secrets with Chinese subsidiaries. Both of these obstacles seem to be melting away. The regulatory conformance is rapidly improving as more reciprocal agreements are being ironed out between the US FDA and its Chinese counterpart, while inadequate IP rights protection no longer stops the leading electronics companies, such as Apple and Sony, from manufacturing their cutting-edge devices (e.g. iPhone, iPad, and PlayStation) in the Foxconn’s Chinese factories.  

With gradual dissolution of the economic barriers, we are now faced with a barrier of a different kind: an acceptance of the level-playing field in the emerging global medical device market. When Terry Gou, the CEO of Foxconn (the largest exporter and largest private employer in China), first approached Steve Jobs, the Apple’s CEO, he had to force Mr. Jobs to give him his business card. Now, a decade later, the relationship between the two companies has evolved from a contract manufacturing to a strong and dedicated partnership, with Foxconn being a main producer of iPhone and iPads. One can hope that a similar transformation is taking place in the mindsets of leading implantable neural device makers. China has recently begun fabrication of its own cochlear implants and DBS devices. The production rate of these domestically-made devices is not high enough to compete with large multinational companies, which still control 90+ percent of the Chinese market.

In anticipation of a looming challenge, the multinationals are expanding their operations in China. For example, Medtronic reported the opening a patient care center in Beijing in 2010 and its new regional headquarters in Shanghai earlier this year, with plans to double its workforce in China to 2,000 employees by 2015 (while reducing the same amount of workforce in other countries). Similarly, Boston Scientific announced a five-year, $150 million investment in China, including the construction of new manufacturing and research facilities and addition of 1,000 workers to the current 200. Following in the footsteps of its competitors, St. Jude Medical announced the opening of an R&D center in Beijing along with a manufacturing facility and training center in Malaysia. It makes sense for the neurotech device industry to embrace the Chinese emerging economy to utilize its consumers, labor, and innovation. According to this report from the Economist, Chinese R&D centers have already developed some innovative medical devices with a price tag one tenth of comparable products in the West. There’s no doubt that we’ll be seeing even more innovation from and investment in China’s neurotech industry. And with more than 1 billion of human capital at hand, it is easy to imagine the potential.

Spinal cord stimulation business: observations from London’s INS meeting

The 2011 meeting of the International Neuromodulation Society, which took place in London, England in May 2011, featured a large number of oral and poster presentations offering updated technical and clinical information on neuromodulation topics. There was also a full day of sessions devoted to commercialization, investment, and industry issues affecting neuromodulation startup firms.

But as is the case with many meetings that draw attendance from different fields of endeavor, there was as much to learn from the informal scuttlebutt going on between sessions as there was from the posters and oral presentations themselves. We offer here some of our observations based on random comments from attendees.

After the Sunday session on future innovations in neuromodulation, some attendees were perplexed by Greatbatch Inc.’s efforts to launch a new spinal cord stimulation device company, called Algostim LLC. Given that Greatbatch supplies components such as batteries and leads to many manufacturers of implanted neurostimulation systems, it raised the question as to why Greatbatch would want to compete with its customers. Greatbatch CEO Tom Hook made the case that by incubating new device startups that will eventually be spun off, Greatbatch will cultivate a greater customer base in the future. It will be interesting to see how that situation plays out.

That controversy might have presented an opportunity for component supplier Cirtec Medical to drum up business, had they have more of a presence at the event. But that company has been hit by the departure of some key staff members, including its former president Barry Smith.

There was also some discussion on the competitive positioning of new entrants in the spinal cord stimulation business such as Nevro, Spinal Modulation, and Neuros Medical. Several attendees thought that Neuros has a sound technology base, though probably the smallest market opportunity of the three. There was speculation that Nevro and Spinal Modulation might be ripe targets for acquisition by existing players in the SCS market. It will be interesting to see if either firm makes it to the market approval stage, let alone profitability, before being snapped up by one of the big three.

Speaking of spinal cord stimulation, perhaps the most profound observation we heard at the conference was by Robert Levy of Northwestern University, who noted that the SCS systems that existed five to 10 years ago, which serve as the basis for many long-term pain studies, represent the worst case scenario. Today’s SCS systems, with their greater specificity, targeting capabilities, and control over stimulation parameters, offer a far better outcome for patients and vendors alike.

James Cavuoto
Editor and Publisher
Neurotech Reports
www.neurotechreports.com

Magnetic Stim Attracts a Crowd

It wasn’t that long ago that magnetic stimulation was looked at as somewhat suspect by many in the neurotechnology industry. But now the number of new entrants in the magnetic neuromodulation space is growing steadily, supplementing existing players using magnetic devices in stimulation, neurodiagnostics, and research.

Some of the credit for this upsurge in interest in magnetic stimulation can be attributed to Neuronetics, Inc., the Malvern, PA manufacturer of transcranial magnetic stimulation systems. The company’s NeuroStar system received FDA approval for major depressive disorder in 2008, and in 2011 Neuronetics announced that Category I CPT codes were available for the procedure, making reimbursement much easier.

At least one new entrant hopes to follow in Neuronetics’ footsteps. NeoStim Inc., a startup in San Mateo, CA, cites the existence of an FDA-cleared TMS therapy and the CPT codes as reasons why NeoStim is a sound investment. NeoStim’s device features an array of coils that the company says offers greater target selectivity than the NeuroStar system because of the multiple overlapping fields. The company plans to pursue other indications besides depression, including pain and addiction. Another startup, Israeli-based Neuronix Ltd., is developing a TMS system for treatment of mild to moderate Alzheimer’s disease.

eNeuras Therapeutics (formerly Neuralieve) in Sunnyvale, CA is developing a single-pulse TMS device for home use for treatment of migraine. Its SpringTMS Total Migraine System is placed at the back of the head for less than a minute, generating a focused, single magnetic pulse that induces a mild electric current in the back of the brain.

Magnetic stimulation devices are also gaining popularity in neurosensing and presurgical planning applications. Nexstim Ltd., the Finland-based manufacturer, markets its MRI-guided TMS system NBS to neurosurgeons as an alternative to direct cortical stimulation. The company is investigating other neurodiagnostic and therapeutic applications of its system, including stroke recovery and pain.

One of the oldest TMS product lines in existence is the MagVenture’s MagPro system, first introduced in 1992 (previously marketed under Dantec, Medtronic, and Natus Medical brand names).  UK-based MagStim Ltd. has also been marketing its line of TMS stimulators for many years. In 2010, the company teamed with the Dutch ANT B.V. (Advanced Neuro Technology) to market a magnetic neuronavigation system called Visor, which features integration with MRI, fMRI, and EEG.

We suspect that there will be even more magnetic ventures forthcoming in the years ahead as the road to FDA approval for more invasive forms of neuromodulation continues to be difficult.

Originally published in Neurotech Business Reports, May 2011, p2

Hypoglossal nerve stimulation for obstructive sleep apnea: revival of the old technology

Obstructive sleep apnea (OSA) is a condition in which breathing is periodically obstructed during sleep, often due to a prolapsed tongue or swollen throat. OSA affects 3-5% of people (18 millions in the US alone) and is often associated with obesity and old age. The hypoglossal nerve (HGN) controls the tongue and soft palate muscles. The closed-loop HGN stimulation, synchronized with the inspiratory phase of respiration, was shown (by Johns Hopkins U. researchers in mid-90es) to reduce the severity of OSA. In 1996-1997, Medtronic Inc. tested the first implantable HGN stimulator, Inspire I, in humans but soon abandoned the device due to concerns about its safety. Fast-forward to 2010: we have an expired patent on the HGN stimulation and several companies vying for dominance in this lucrative market. Charging ahead of the competition is a Medtronic’s spinout Inspire Medical Systems, with its device, Inspire II, that just received the CE Mark for clinical use in Europe. Not far behind are the Apnex Medical and ImThera Medical, who are undergoing clinical trials for their versions of the HGN stimulation devices. It is worth mentioning that other neurostimulation technologies are being applied for sleep apnea. Cardiac Concepts Inc. is developing a device for the phrenic nerve stimulation to restore a more natural breathing pattern in patients with the central sleep apnea, a related medical condition. Inspiration Medical Inc. holds several patents for the diaphragm pacing as yet another method for OSA treatment. Finally, there are some less-invasive approaches including tongue stimulation with sublingual electrodes and the repelling magnetic implants in the tongue base and posterolateral pharynx. Perhaps, it is too early to predict which of the technologies will ultimately prevail, so let’s not lose our sleep over this for now.