Confidential The Device Development Industry December 4, 2010 North American Neuromodulation Society 14 th Annual Meeting Frank Fischer President and CEO.

Confidential

The Device Development Industry

December 4, 2010

North American Neuromodulation Society

14th Annual Meeting

Frank Fischer

President and CEO

NeuroPace, Inc.

Confidential

DEVICE DEVELOPMENT HAPPENS IN STAGES

1STAGE : CONCEPT DEVELOPMENT

STAGE : TESTING IN ANIMALS2

STAGE : CLINICAL EVALUATION IN HUMANS3

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DEVICE DEVELOPMENT HAPPENS IN STAGES

1STAGE : CONCEPT DEVELOPMENT

• Test and refine theory – translate to a therapeutic approach• Characterize and improve approach in a representative

bench system

• Easy to iterate• Bench & In Vitro testing -

minimal regulatory issues• Cost of failure is minimal

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STAGE : TESTING IN ANIMALS

DEVICE DEVELOPMENT HAPPENS IN STAGES

2

• Iteration possible but at a cost• Testing requires compliance to

protocols• Failure results in greater loss of

financial resources and time

• Learn about the downsides - characterize side effects, adverse reactions, limitations, technical hurdles• Glean some insights into efficacy, if possible

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STAGE : CLINICAL EVALUATION IN HUMANS

DEVICE DEVELOPMENT HAPPENS IN STAGES

3

• Iterating the concept can be much more difficult• Clinical evaluation requires IRB

and/or FDA approval• Failure in almost every case is

very costly

• Prove safety and efficacy of your approach• If any uncertainty, parse this stage into parts (e.g.,

feasibility and pivotal)

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STAGES ONE AND TWO LAY THE FOUNDATION FOR COMMERCIAL SUCCESS

• Confirm your product concept is feasible and has no obvious safety issues

• Develop intellectual property

1

2

Goals of stages 1 and 2

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STAGES ONE AND TWO CAN BE COMPLETED WITH ONLY BASIC RESOURCES AND MINIMAL FUNDING

1

2

• Basic engineering and prototyping skills

• Internet/ library

• Intellectual property support

• Minimal funding

Resources required

Typically available at your university!

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READY TO BLAST OFF? A SPECTRUM OF OPTIONS EXIST FOR HUMAN EVALUATION

Use already marketed, FDA approved devices

“Boldly go where no one has gone before” – build fully custom devices or systems

Build semi-custom devices via partnership with OEM device firm(s)

STAGE : CLINICAL EVALUATION IN HUMANS3

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EXAMPLE: FUNCTIONAL NEUROSCIENCE

November 2010

“Functional Neuromodulation Inc., a medical technology company, closed a $600,000 seed financing from Genesys Capital”

October 2010

• Used off-the-shelf Medtronic DBS System

• 6 patients with mild Alz disease; stimulate the fornix/ hypothalamus

• Surgery and stimulation well tolerated• Results were mixed but highly

encouraging

STAGE : CLINICAL EVALUATION IN HUMANS3

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EXAMPLE: LEPTOS

• Began human trials using Cyberonics devices

• Learned that gradual stimulation ramping was important to acclimate patients to stimulation

• Partner with OEM device manufacturers to build semi-custom neurostimulators and leads

• Automatic stimulation ramping • Custom lead specific for nerve target

• Stimulation of splanchnic nerve for obesity

STAGE : CLINICAL EVALUATION IN HUMANS3

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EXAMPLE: NEUROPACE

• Responsive stimulation for the treatment of epilepsy

• Early realization that a fully custom system was necessary

• Build multi-functional team to develop and test implantable responsive neurostimulator, leads, programmer, remote patient monitor, and patient data management system

• Develop protocols for clinical evaluation; secure IDE approval from FDA; conduct clinical evaluations

STAGE : CLINICAL EVALUATION IN HUMANS3

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EXAMPLE: NEUROPACE

2000 20102005

Develop-ment

Clinical Evaluation

Implantable RNS

eRNS Study RNS System Feasibility study65 patients

RNS System Pivotal trial191 patients

Perform basic testing in hospital setting with external system

Evaluate implantable system for safety and secondarily, efficacy. Gather data and learn!

Evaluate implantable system for efficacy and safety.

External RNS

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EXAMPLE: NEUROPACE

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COMPARISON OF STAGE 3 OPTIONS REVEALS KEY DIFFERENCESRESOURCES AND EXPERTISE REQUIRED

In-house engineering

+ ++ +++

Device dev expertise

+ ++ +++

Financial efficiency

+++ ++ +

IP opportunity + ++ +++

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CONCLUSION

• Don’t be afraid to get started• Fail quickly!• Iterate until your concept is ready for clinical

evaluation• You cannot over invest in this phase

• Product development can take many paths, but almost always can be accomplished