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Ohio's neurostimulation industry: on the brink of a breakout

Dr. Hunter Peckham, a biomedical engineering professor at Case Western Reserve University
Dr. Hunter Peckham, a biomedical engineering professor at Case Western Reserve University - Bob Perkoski
After decades of research and development in neurostimulation technology, Ohio is riding a national commercialization wave in neurodevices. Neurostimulation, also referred to as electrostimulation, uses electricity as an alternative to drug therapy. Treatment applications include relief of chronic pain, paralysis and depression.

There are approximately 725 persons currently employed in Ohio manufacturing industries related to electromedical and electrotherapeutic apparatus equipment, according to Economic Modeling Specialists, Inc. At first blush, the number may not look impressive, but jobs in these industries garner an average income of $75,000.

The economic impact of the industry is just the beginning.

Poised for a breakout
"It's becoming known we're not a flyover zone," says Dr. Hunter Peckham, a biomedical engineering professor at Case Western Reserve University. "Neurotechnology is the fastest growth area of the medical device industry. All of a sudden, Cleveland is an area where investors are starting to look at something going on with company formation."
For good reason.

In 2010, for example, the Neurotechnology Industry Organization (NIO) named Cleveland one of six "regions to watch" in an analysis of worldwide industry clusters for all related industry sectors. Cleveland shared the honor with cities such as Munich, Shanghai and Chicago. When focusing just on neurodevice companies, the report ranked Cleveland sixth internationally with eight companies and Cincinnati fourteenth with three companies. While not yet on par with cluster giants such as Boston, the report notes that although the Cleveland-area market has relatively few startups, the presence of "large scale government institutional support" makes up for it.

From humble beginnings to robust collaboration
Since 1968, Peckham has pioneered neurostimulation technology at CWRU. He helped found the Cleveland FES (functional electrical stimulation) Center with the university, MetroHealth Medical System and the Cleveland VA Medical Center. "We've had a strong research community and extra strong clinical community using all these products, but until the last decade we had a very modest business community," he says.
Peckham says the state's passage of the Ohio Third Frontier economic development initiative in 2002 helped fuel the upswing. Ohio has funneled nearly $20 million into research and commercialization funds in neurostimulation projects linked to CWRU and its partners.
One direct outcome was the creation of Neuros Medical, Inc. in Lake County. Company CEO Jon Snyder initially served as "CEO in residence" at the regional bioscience incubator BioEnterprise, which helped CWRU researchers determine the most promising business applications. They recommended one project involving implantable technology that delivers high-frequency stimulation to sensory nerves in the peripheral nervous system in order to block chronic pain. JumpStart Inc. and Case Technology Ventures also invested in the effort.
Neuros proceeded and in June, announced results of a pilot trial indicating that seven out of nine study subjects reported significant pain reduction (defined as 50 percent or greater) for up to 12 months of evaluation. "Jon had five (research applications) he thought were viable, and four are still sitting on the table," says Peckham.
"A pioneer in the use of neurostimulation devices"

Another research and commercialization giant in neurostimulation technology is the Cleveland Clinic, which the 2010 NIO report describes as "not only a pioneer in the use of neurostimulation devices, but (one that) has cultivated the necessary talent and capital to create innovative startups which stay in the region."
The Clinic has also obtained OTF funds for neurostimulation research and has spun off at least three companies in the field, including Autonomic Technologies, Inc., whose initial product is an almond-sized device implanted behind the nose and sinuses to relieve cluster headache attacks. The technology was voted #2 on the Clinic's Top 10 Medical Innovation list for 2013. It is currently marketed in Europe and awaiting approval from U.S. regulators.
The chief clinic researcher behind the efforts, Dr. Ali Rezai, now directs Ohio State University's Center for Neuromodulation. He remains a key linchpin in a commercialization alliance announced last year between the Clinic and OSU's Technology Commercialization and Transfer Office, which has identified neurostimulation devices as a key collaborative area.
Akron's international connection
Unlike most Ohio neurostimulation companies that connect back to research local hospitals, Akron's Nervomatrix features technology stemming from Targetech, an Israeli business incubator. Nervomatrix was financed in part by the city of Akron, Summit County, and several local private investors. One investor, Everett Partners Ltd., invested $3.5 million directly in Nervomatrix and established an Akron headquarters last year.
The company plans to begin marketing its pain-relief neurostimulation device this month with a focus on the chiropractic market, says Nervomatrix U.S. Business Development General Manager Robert Rossell. The device identifies chronic pain points in the back and delivers targeted electrical stimulation.
"Akron is fertile ground. The local authorities have done a nice job in creating a pro-business environment to facilitate startups," says Rossell. "There is very good infrastructure in this region for supporting commercialization with … manufacturing, regulatory, product development, and all different entities to support startups." Rossell adds that once the market is established. "Moving forward, there is the possibility for future manufacturing in Ohio."
Ohio company garners celebrity attention

While most neurodevice companies remain concentrated in the northeast part of the state, one of Ohio' industry pioneers gained national attention when in 1983, paraplegic student Nan Davis, got out of her wheelchair and "walked" to get her diploma at the University of Dayton Arena via stimulated muscles. The breathtaking moment was courtesy of researchers at Wright State University. Although the school no longer operates the research center, Therapeutic Alliances, Inc. was born of it.
The Fairborn company's signature product is a stationary bicycle that impaired persons can operate via a complex system of electrical stimulation for the leg muscles. Company president James Schorey says neurological patients suffering from stroke to paralysis use the device to aid circulation and build strength and muscle mass. Quadriplegic celebrity Christopher Reeve owned a unit. "He told me it was his favorite therapy," says Schorey, who estimates the company has sold a "couple thousand" bicycles through the years.
TAI also helped develop new neurostimulation technology championed by another disabled celebrity, noted physicist Stephen Hawking. The biofeedback technology uses electromyography (EMG) to monitor the electrical activity of muscle tissue and sense even the faintest nerve signals from incapacitated patients.
"That signal gets sent by bluetooth over a Macintosh to a controller, so they can start writing emails and communicating with their family," says Schorey. He adds the next application of this technology could help amputees gain more accurate control of prosthetic arms.
TAI sells the EMG technology to another neurodevice manufacturer as a component. Schorey believes smaller neurodevice companies like TAI will survive by serving as vendors or directly licensing technology to larger entities. 
A $42 million sale in the past, a $3 million grant for the future

Peckham says some Ohio startups have indeed licensed initial technology, but then re-invested. For example, the Cleveland-based venture capital and commercialization firm, NDI Medical, which focuses on innovative neurodevice technologies, sold its first product (a bladder pacing system) to Medtronic, Inc. for $42 million in 2008. It has since spun off three other companies and partnered with Peckham to land a $3 million OTF grant earlier this year. The funding is slated to commercialize a neurostimulation technology platform designed to test multiple clinical indications, including pain and muscle paralysis. The technology has been in development for 10 years at CWRU.
Peckham says the platform will allow for very efficient testing of 70 different clinical applications – a normally expensive and time-consuming part of medical research. Instead of spending millions to get a very specific piece of technology to test an idea, the platform would adapt to the user's need. He says the project could entice larger neurodevice companies to relocate to northeast Ohio.
"We would have the capacity in this region of utilizing technology to test out these applications. We've got it into a form they need and we'll make it accessible to them," says Peckham.

"Why wouldn't they want to be here?"

Tom Prendergast is a Mansfield-based freelance writer.
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