NeuroPace - 2014 Fierce 15

CEO: Frank Fischer
Based: Mountain View, CA
Founded: 1997

The scoop: NeuroPace's RNS System is the only neurostimulation device that delivers stimulation on an as-needed basis due to its unique ability to monitor and assess the brain's response to its treatment. In the three-month blinded period of its pivotal clinical trial, the device to treat epilepsy reduced the number of seizures by nearly 38% on average.

"We have the ability to sense electrical activity and set specific and personalized detection parameters for each individual patient to look at their unique signature of abnormal electrical activity, and once that's detected we deliver stimulation, at imperceptible levels so that the patient can't feel it, to disrupt that abnormal activity so that it doesn't spread through the rest of the brain and result in a seizure," CEO Frank Fischer said.

He added that the competitors are programmed "to either continuously deliver stimulation or to deliver stimulation on a preprogrammed, cyclic basis."

The RNS System exemplifies the advent of neurological implants, as well as the growing importance of patient-specific data as a means of enabling personalized healthcare. In fact, the information gathered by the device can be downloaded onto a centralized server and made available to a doctor with access to the Internet from anywhere in the world.

"The physician can access that information and make a very meaningful determination as to what his or her recommendation might be," Fischer said.

What makes NeuroPace Fierce: The RNS System was one of three devices awarded new technology add-on payments from the federal Centers for Medicare & Medicaid Services (CMS) this year, in recognition of its clinical benefits and innovative nature. NeuroPace was the only privately held company to receive the bonus reimbursement.

NeuroPace's RNS System--Courtesy of NeuroPace

Fischer said in a previous story that he expects CMS's decision to increase access to the device among Medicare patients because it will enable hospitals to just about break even on the total costs of the procedure, which includes the cost of the device as well as the associated surgery.

The Department of Defense also singled out the RNS System by using the implant in its $40 million study into restoring memory, a move that NeuroPace said could help expand the product's indications beyond epilepsy. Patients with the implant who agree to participate in the DOD initiative will be studied using data gathered from the device.

"The device plays a very fundamental role in the ability to gather the necessary knowledge," Fischer said.

Investors have also been enthusiastic supporters of NeuroPace. The company has raised about $180 million total since its foundation in 1997 from partners like New Enterprise Associates, InterWest Partners and Johnson & Johnson ($JNJ).

Now they expect a payoff since commercialization is underway, with 67 patients receiving the implant since FDA approval in November 2013. The RNS System is available in about 45 level 4 epilepsy centers, according to the CEO. He aims for the device to be offered in all 120 of the centers and says that market opportunity is 400,000 to 500,000 patients, or about a fifth of all epilepsy sufferers.

So far, NeuroPace's RNS System has lived up to the expectations of being one of FierceMedicalDevices' top FDA med tech approvals of 2013.

What to look for: Fischer said he aims to take the company public in late 2015. Unlike many other device companies, NeuroPace chose to focus on the U.S. first; Fischer cited the country's advanced infrastructure for treating epilepsy. But the CEO said he aims to commercialize the RNS System in Europe and elsewhere outside the U.S. in 2016.

A next-generation version of the implant is in the works. It will have greater longevity and twice the memory storage capacity of today's RNS System, Fischer said, adding that he anticipates the improvements will receive a PMA supplement approval from the FDA in late 2015.

Most exciting of all, the technology has the potential to treat a whole host of neurological problems, including mood, movement and bipolar disorder, according to Fischer. The possibility of an expanded indication beyond the relatively small market for epilepsy will be an important selling point to Wall Streeters when the company goes public.

"Any neurologic disorder that you can think of that would have a change in brain state, there should be an eventual ability to treat," Fischer said. "It's very logical given the further research to determine the actual specifics, that this technology could be applied to look for those changes in brain state and deliver stimulation accordingly." -- Varun Saxena (email | Twitter)

For more:
Special Report: 2013's top FDA approvals in med tech - NeuroPace's antiepilepsy neurostimulation implant
NeuroPace stimulator to be deployed in $40M DOD brain research initiative
NeuroPace's neurostimulation epilepsy implant is already making an impact
NeuroPace wins FDA signoff for neurostimulation epilepsy implant

NeuroPace - 2014 Fierce 15