Neurological Devices Attract Investors Despite Cautious Venture Market

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startups with medical-device alternatives to medications for brain diseases that are common but difficult to treat. They include implants, known as brain-computer interfaces, designed to restore functions lost to disease or injury. One such company, Elon Musk’s Neuralink, recently disclosed a $280 million venture round.

Companies advancing an existing type of medical-device treatment known as neuromodulation also are attracting investors. Saluda Medical in April secured $150 million to market a spinal-cord stimulation therapy for chronic pain, and Cognito Therapeutics collected $73 million in March to test a neuromodulation therapy for Alzheimer’s disease. U.S.

and European neurological device makers gathered $764 million in venture capital in the first half of this year, according to HSBC. It was the highest total among the 12 medical-device markets the bank analyzed, topping fields such as cardiovascular- and orthopedic-device treatments. Musk’s involvement is drawing interest to neurological devices, but the best investors are making decisions grounded in a technology’s value to society, said Manish Kothari, founding managing partner of venture firm First Spark Ventures.

These companies face challenges such as blazing a trail to regulatory approval and market adoption. Proponents say patients are seeking new options for conditions like chronic pain that often aren’t well-treated with medicine. “We’re crossing over into an age where innovations in neuroscience and innovations out of neuroscience are enabling creation of a whole new generation of therapeutic and diagnostic technologies," said Dr.