The Wider View: Neuromodulation still electrifying investors

The neuromodulation space has seen three successful IPOs this year so far and a steady influx of venture capital to support earlier-stage innovators. Investors' interest in this field are fuelled by growth opportunities in this market, driven by the expanding breadth of clinical conditions which neuromodulation is targeting and the anticipated influx of products like Axonics’ r-SNM device for overactive bladder, among others, which are designed with features to make the technology more accessible.

What’s happened

Axonics Modulation Technologies last week became the third neuromodulation technology company to make its stock market debut this year, raising $120 million in gross proceeds through its IPO. This is the second largest medtech-related IPO - behind liquid biopsy company Guardant Health’s $240 million stock launch that same month - and the funds will enable Axonics to ramp up global commercialisation of its r-SNM (rechargeable sacral neuromodulation) system for treating overactive bladder (OAB).  

Axonics’ IPO follows two other stock market launches by neuromodulation companies earlier this year. electroCore, which specialises in noninvasive vagus nerve stimulation, raised $78 million from its stock float in June while Neuronetics, which is targeting depression with its transcranial magnetic stimulation system, pulled off an upsized IPO at $107.5 million in July, after its shares were offered at $17 each, above its initial price range of $14 to $16.

On the private financing side, FirstWord MedTech has recorded nine venture investments in neuromodulation companies this year to date, including Axonics’ pre-IPO round. The largest among these was a $65-million Series C round by Metavention, which is developing a system that modulates the sympathetic nerve to manage blood glucose levels in diabetic patients.

Venture financing deals in neuromodulation companies, 2018 YTD




Amount raised

Financing round


Metavention (US)

The Metabolic Neuromodulation Therapy modulates the sympathetic nervous system to control blood glucose levels in Type 2 diabetes patients.

New Enterprise Associates, Sanderling Ventures, RK Mellon and Horowitz Group, Versant Ventures and others


Series C


StimWave (US)

Stimwave has a wireless, microchip device that electrically stimulates the peripheral nerves to provide pain relief. It does not require any internal batteries and can be placed at any peripheral nerve throughout the body or in the spinal column nerve bundles.





Neuspera Medical (US)

Neuspera is developing a class of hermetically sealed neuromodulation devices that are 100 times smaller than current models.

6 Dimensions Capital, Action Potential Venture Capital, Windham Venture Partners. Delta Capital, LLC and Purple Arch Ventures.


Series B


Halo Neuroscience (US)

Halo Sport is a headset that delivers neurostimulation to the motor cortext to improve muscle memory acquisition from athletic training. The technology will be developed for medical applications.

TPG, Lux Capital, JAZZ Venture Partners, XFund


Series B


eNeura (US)

eNeura's SpringTMS  transcranial magnetic stimulation device is US FDA-cleared for migraine treatment and prevention.

Camden Partners Nexus, and others


Series D


Synergia (Belgium)

Synergia’s NAOS is a vagus nerve stimulation (VNS) device. It is smaller than conventional VNS devices and is rechargeable. Its electrical leads use optical fibres with photovoltaic cells, which makes its MRI compatible.

Newton Biocapital, Financière Spin-off Luxembourgeoise, SRIW (Société Régionale d'Investissement de Wallonie) and SFPI-FPIM (Belgian Federal Holding and Investment Company)


Series A


Axonics Modulation Technologies (US)

Axonics has developed a rechargeable sacral neuromodulation (r-SNM) system for treating urinary and bowel dysfunction. It is CE marked and approved in Australia and Canada.

Longitude Capital, Gilde Healthcare, CICA, Edmond de Rothschild Investment Partners, Advent Life Sciences, Cormorant Asset Management, Legend Capital, NeoMed Management, and private investors




Cardionomic (US)

Cardionomic is developing a neuromodulation technology to increase the heart muscles' contractibility and reduce acute heart failure.

New Enterprise Associates, Cleveland Clinic, Greatbatch, others




NeoTherma Oncology (US)

VectRx is a clinical-stage noninvasive thermal oncology therapeutic device to treat a wide range of cancers. Its first target is pancreatic ductal adenocarcinoma. It will be an adjuvant therapy.

Gary Barnett, Flor-Med Partner, R&D Edwards Investments and others


Series A



The wider view

Looking at the portfolios of the three biggest neuromodulation players – Medtronic, Abbott (it got into this space via its acquisition of St Jude Medical) and Boston Scientific – pain management continues to be the main indication and the biggest market for this therapy modality. Another area in which neuromodulation has become a well-established treatment option is in motor disorders like epilepsy, where LivaNova, in its former incarnation as Cyberonics, pioneered vagus nerve stimulation for drug-resistant epilepsy and is now the leading player in this segment.

But neuromodulation has been branching out beyond these tried and tested medical conditions and taking root in other medical specialties – cardiology, urology, diabetes, autoimmune diseases like rheumatoid arthritis and even oncology. As evidenced by the amount of money this area is attracting, investors are buying into the lucrative potential of this market. And pharma companies like GlaxoSmithKline and Sanofi are also putting their money into neuromodulation – which they have tried to appropriate by dubbing it bioelectronics medicines – knowing that this device-based therapy could disrupt traditionally pharma-dominant markets.

The technology advancements seen in neuromodulation no doubt play a big role in the increasing acceptance of this field. electroCore’s vagus nerve stimulator gammaCore and Neuronetics’ NeuroStar transcranial magnetic stimulation therapy have different approaches and are targeting different indications but both technologies are noninvasive. This makes the therapies more appealing to patients and could bring the upfront costs down by eliminating the need for implantation procedures (for the impulse generators) or dealing with complications that might arise from the implants.

Even if the therapy calls for implants, one direction this field is heading towards is reducing the size of the devices. A number of the companies that got venture backing this year are working on miniaturisation, like Neuspera Medical which claims its hermetically sealed implants are 100 times smaller than conventional neuromodulation devices.

In addition to size, rechargeability and MRI-compatibility of the implants are also key issues that are being addressed by the newer generation of devices in development (see Synergia and StimWave in the venture financing table above).

Axonics’ makes neuromodulation more appealing

Indeed, both size and rechargeability is a key differentiator between Axonics’ r-SNM system and Medtronic’s InterStim device, which was the first on the market; it was CE marked in 1994 and US FDA-approved in 1997 for the treatment of OAB and urinary retention in patients who do not respond to behavioural therapy and conventional drug treatment.

Sacral neuromodulation works by electrically stimulating the sacral nerves located in the pelvis, which control voiding action. The r-SNM system’s implant is about a third the size of Medtronic’s and a fourth the size of standard neuromodulation implants used for other indications.

Also, because Medtronic's Interstim does not have a rechargeable battery, the implantable pulse generator has to be explanted every four years or so. The r-SNM implant has a lifespan of at least 15 years and it is designed to be recharged transcutaneously – once every two weeks, for an hour – using an external wireless device shaped like a hockey puck.

MRI compatibility is another feature of the r-SNM implant. The system is approved for commercialisation in Europe, Australia and Canada and it has MRI labelling in those geographies for head and neck MRIs using both 1.5T and 3T scanners. Axonics CEO Raymond Cohen told FirstWord MedTech the company will be using part of the funding it has raised on various product development and regulatory initiatives, which would include obtaining Full Body MRI labelling, first in Europe then Canada and the US.  "As one can imagine, not having this labelling is keeping some patients from choosing SNM therapy and for those who do have an implant, it’s burdensome and costly to have the device explanted if an MRI below the head or neck is required," he said. "Our r-SNM product was designed with this capability in mind and we have completed all the testing and have the evidence to support this claim. We are now waiting for the regulators to complete their reviews."

Other enhancements, which Axonics expect will come to market in early 2020 include reducing the frequency of recharging the implant from once a fortnight to once a month.  

The company already has its first orders from hospitals in the UK, according to Cohen, but with the US accounting for nearly 90 percent of worldwide uptake of sacral neuromodulation, the company’s strategy is to channel the majority of its resources to commercialising the r-SNM system in this market. It completed enrolment of its US pivotal trial in June and it plans to file its premarket approval with the FDA in Q1 2019; if all goes well, the product could be in the US market in the second half of next year.

Converting technical advantages into profit

Thanks to Medtronic being first on the market with Interstim, Axonics can benefit from the reimbursement codes that are already in place to cover sacral neuromodulation and should help facilitate with the technology’s adoption. Cohen is also bullish about how soon the company would be in the black once r-SNM sales are up and running – and it is these statements which make the neuromodulation play alluring to investors.  

"We believe that it is possible to get Axonics to cash flow breakeven based on the [IPO] funds we raised. Of course, revenue with good gross margins are the key to this statement. Sacral neuromodulation is not the same as the spinal cord stimulation market, where there is a lot more after-implant support that is required by the manufacturer," he told FirstWord MedTech.

"One of the key design goals of our r-SNM product was to make the experience 'fuss-free' for patients and physicians and their staff. SNM with the right product design is as close to 'set it and forget it' as you can get in neuromodulation. The point here is that we don’t need as many people nor the expense that we see in the SCS business and therefore expect to be able to actually generate a profit sooner than we’ve seen with certain standalone SCS companies."

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