Investment Is Pouring Into Neuromodulation Treatments

The last month has seen several big investments in European neuromodulation and neurostimulation companies, which aim to treat neurological conditions by zapping nerve cells. What’s the reason for this funding peak?

Last week, the Italian firm WISE announced the closing of a €15M Series C round to fund the development of a device that blocks chronic pain signals in the spinal cord by electrically activating nerve cells. In late September, the Dutch company Salvia BioElectronics raised €26M in Series A funding to develop a neuromodulation therapy for migraine.

Similarly, the Belgian firm Nyxoah completed an oversubscribed IPO on the Euronext stock exchange raising up to €85M. The IPO, which smashed the initial goal of €60M, will finance the development of an implant designed to treat sleep apnea by electrifying nerve cells under the tongue.

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Neuromodulation is where a device controls nerve cell firing either with electrical currents, known as neurostimulation, or with localized doses of drugs. The technology has been used for decades to provide treatments for conditions involving the nervous system. For example, cochlear implants can improve hearing in hearing-impaired patients, and the motor symptoms of Parkinson’s disease can sometimes be treated by electrically activating neurons deep in the brain. With advances in computational technology, these devices are getting more sophisticated, and new disease indications are opening up. 

So, why is there so much interest in neuromodulation right now? One reason is that the technology has now reached a point where there are effective examples of its use on the market. 

The first pioneers in this area began development in the early 2000s, but there was insufficient evidence of its efficacy at the time. Clinical trials were small, there was limited wider knowledge about the technology among clinicians, and regulatory pathways were uncertain. All of this resulted in low amounts of funding early on.

Olivier Taelman, CEO of Nyxoah, has been working in the field of neuromodulation for the last 20 years. He believes that the recent success of companies such as Nyxoah is due to three key factors.

“The first one is you need to have disruptive technology. The second reason is that you need to have an existing market… And third, if you look at the current timing with the impact of Covid-19, there is now a lot of money that people want to invest.”

He credits US company Inspire Medical Systems with paving the way for the use of neurostimulation devices in sleep disorders – the firm was the first to develop an implantable neurostimulation device for treatment of sleep apnea that is now on the market. 

Nyxoah aims to improve on the technology developed by Inspire with a machine that requires less intensive surgery to implant. Still, Taelman believes that the existence of a successful earlier company in this space has helped to reassure investors about the validity of his company’s technology.

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Basic spinal cord stimulators were developed in the ‘60s and ‘70s to treat chronic pain, but the best devices usually require surgery to implant. WISE is also targeting chronic pain by stimulating spinal nerves, but with a slightly different approach. The company is using its recent Series C investment to develop an implant that can be injected via a catheter and expands onto the spine in the form of a paddle after implantation. This can avoid the need for a specialist operation.

Over the last 10 years, the neuromodulation market has grown considerably with an annual growth rate of 10%, Luca Ravagnan, WISE’s CEO, told me. Spinal cord stimulation for the treatment of chronic pain represents more than 50% of the market.

“Although the beginning of the modern era of neuromodulation dates back to the ‘60s, the currently approved indications are still limited in comparison to the number of foreseeable ones,” he explained.

“As new technologies like our own enter into this sector, overcoming the limits of the current technologies, more and more therapies are becoming accessible.”

Salvia BioElectronics has developed thin, flexible bioelectronic foils that can be implanted under the skin near target nerves. The goal is to treat chronic migraine headaches, one of the biggest causes of disability in those under 50 years of age.

Neurostimulation has been shown to be an effective way to treat migraine in the past, but there have been many problems with the devices that have been developed to date and none are currently approved for use.  

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Daniel Schobben, COO at Salvia, says he has noticed big changes during the last decade and a range of new companies coming up to compete with the traditional players such as Medtronic, Abbott, and Boston Scientific. “There is more and more evidence that stimulation of selected nerves can be used to treat a range of disorders… Next to the already existing neurostimulation indications, such as chronic pain, or movement disorders, there is a huge untapped potential for these new indications.”

Schobben thinks that the digital era that we live in now has helped make these technologies – which undoubtedly have an aura of science fiction about them – acceptable.

“Investors recognize the large untapped potential and the value that drug-free solutions may bring… Patients readily embrace these developments and doctors understand and are more open to the possibilities that novel neurostimulation technology can bring beyond the traditional approaches.”

Ravagnan points out that having an air of mystery, or perhaps science fiction can actually help promote these technologies more widely, particularly in the area of direct brain-to-computer interfaces, long a goal of those working in rehabilitative medicine to help people with paralysis.

“The neurotechnology field is gaining great visibility to the public as companies like Elon Musk’s Neuralink foresee visions of interconnecting the human brain to computers.”

A European company in the brain-to-computer interface space – Germany’s CereGate – underlined the trend with an undisclosed Series A round in September.

With ever-improving technology, better clinician and patient acceptance, and recent increased interest from investors, it seems certain that the field of neuromodulation will continue to develop and provide new, drug-free solutions for a variety of medical conditions. Furthermore, there might even be advances in using light to stimulate neurons without needing any invasive procedures. 

“Novel device architectures, different from the traditional neurostimulator systems, will be developed and brought to market, opening up a range of new indications; particularly in chronic diseases,” predicts Schobben.

“Integration with digital technologies will drive the field towards more patient-specific solutions and reduced burden for healthcare providers.”


Image from Elena Resko

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