Saturday, March 20, 2010

Brain Fitness Market

Resident getting brain fitImage by The Pointe at Kilpatrick via Flickr
Executive Summary
Advances in Neurotechnology are accelerating rapidly as a result of advances in neuroscience, electrical stimulation, biomaterials, and microelectronics.    The overall worldwide market for neurotechnology products will be $3.6 billion in 2008 and will reach $8.8 billion in 2012.  Neurotechnology industry revenues rose 10% to $120.5 billion in 2006; this includes neuropharmaceutical revenues of $101 billion, neurodevice revenues of $4.5 billion, neurodiagnostic revenues of $15 billion.  Venture capital investment in neurotech rose 7.5% to $1.67 billion in 2006.  Since 1999, venture investment in neurotech has increased over 250%.  Brain-related illnesses afflict more than two billion people worldwide and 100 million in North America.   There are over 500 drug, device and diagnostic neuroscience companies worldwide.  The annual economic burden of brain-related illnesses has reached more than $1 trillion in the U.S. and $2 trillion worldwide.

 A subset of the neurotechnology market, brain fitness is estimated to be $225 million in 2007, up from $100m in 2005 (50% CAGR). “The two segments that fueled the market growth: consumers (grew from $5m to $80m, 300% CAGR) and healthcare & insurance providers (grew from $36m to $65m, 35% CAGR).   Over 20 companies are offering tools to assess and train cognitive skills to four customer segments: consumers (individuals and institutes); healthcare and insurance providers; K12 school systems; and Fortune 1000 companies, the military, and sports teams.   The Nintendo Brain Age phenomenon has driven much of the growth. The consumer segment grew from a few million in 2005 to an estimated $80 million in 2007.  There is major confusion in the market, so education will be key. Users and buyers need help to navigate the maze of products and claims.   Over 400 residential facilities for older adults have launched computerized “brain fitness centers.” Sales to the healthcare and insurance provider segment grew from $35 million in 2005 to an estimated $65 million in 2007.   More than five programs have shown results in randomized controlled trials. Cognitive functions that can be trained include: visual and auditory processing, working memory, attention, and decision-making.   A product has obtained 510(k) FDA clearance for rehabilitation of stroke and Traumatic Brain Injury patients. Another product is being used by a growing network of ADHD specialists.  Large-scale, fully-automated cognitive assessments are being used in a growing number of clinical trials. This opens the way for the development of inexpensive consumer-facing, baseline cognitive assessments.  The potential for K12 Education remains largely untapped due to limited research linking cognitive training to academic performance.  Companies, sports teams and the military are finding opportunities to improve productivity.  Aging populations are increasing the prevalence of brain-related illnesses creating unprecedented demand for treatments that delay, prevent and cure chronic neurological and psychiatric illnesses”.(1)



Trends and Drivers

Demographic Drivers: 
                                                                                                                                                                                               
 The average age of the US population is aging.  According to Census Bureau projections, the elderly population will more than double between now and the year 2050, to 80 million.  Much of this growth is attributed to the "baby boom" generation which will enter their elderly years between 2010 and 2030.  The number of those hit by the debilitating Alzheimers across the globe would quadruple by 2050, and the biggest jump is projected for Asia. At the moment the continent has almost half of todays Alzheimers patients, at 12.6 million. By 2050, the region will have 62.8 million of the world's 106 million Alzheimer's, researchers at Johns Hopkins University say.

According to the Kalorama Report, the market for treating depression is one of the most promising applications of neurotechnology devices. Both rTMS and vagus nerve stimulation (VNS) are being targeted for these condition, and FDA approvals have recently been announced. The potential market opportunity is huge, with between 15 million and 20 million people in the U.S. alone who could potentially benefit. This corresponds to a market value of $12 billion to $15 billion.  Approximately one third of people suffering from depression do not respond to current treatments.

Social Drivers:  
The increased acceptance for inexpensive, self-administered treatments as opposed to hospitalization has increased the potential for brain fitness products.  Innovative modalities and new methods for evaluating effectiveness are proving the value of brain fitness products over drug regimens.


Economic Drivers:  
Brain Fitness Software is more cost-effective than other alternatives such as Neurostimulation Devices or Drug Regimens.   As part of cost control measures, prevention of illness is increasingly emphasized.  Adverse changes in regulations or reimbursements by Medicare, private insurers, managed care organizations or workers compensation could limit competitors’ ability to market and sell neurostimulation products and drugs.  Also, cognitive therapies and drugs are usually covered by insurance, while software is not. 


Research Funding


Federal Government Initiatives
  • National Neurotechnology Initiative:  `
  • NNTI plans to distribute $200 million per year in Federal funding as follows:
  • National Neurotechnology Coordination Office -- $5M to create and run a National Neurotechnology Coordination Office and advisory council (improves national coordination among agencies)
  • National Institutes of Health -- $80M to fund the NIH Blueprint for Neuroscience Research (expands basic neuroscience infrastructure available to 16 NIH Institutes involved in the brain and nervous system) -- $75M to fund neurotechnology-related SBIR and STTR at the NIH (additional funding beyond current program to accelerate translational innovation and small business funding)
  • Food and Drug Administration -- $30M for the FDA to increase neuroscience-related staff and to develop workshops to develop neurotech standards (increases timeliness & safety of neurotech review process)
  • Ethical, Legal, and Social Issues -- $10M to develop a research center to conduct studies on the ethical, legal and social implications of neurotech (increases national coordination and industry growth)
  • Traumatic Brain Injury Initiative by the Veterans Administration.
Regulatory Trends
According to the International Journal of Marketing, FDA approval process can often take several years from the time a new product is conceived to the time that it is approved for market .  The average time for a PMA clearance is 11.9 months compared with 3.4 months for a 501K application.  Clinical trials generally add another year to the process.  The regulatory barriers affect not only the process of generating revenue but places constraints on marketing, public relations and customer service since the government places restrictions on what can and can not be said about products undergoing evaluation.

Clinical Trials:   Preliminary results from the IMPACT (Improvement in Memory with Plasticity-based Adaptive Cognitive Training) study are being presented today at the International College of Geriatric Psychoneurpharmacology's 8th Annual Scientific Meeting in Randwick, New South Wales, Australia. that show that after 10 weeks of training, significant group by time interactions favoring the experimental group (the Brain Fitness Program) were seen on the primary endpoint measure (RBANS Auditory Memory) and multiple within-modality but not cross-modality secondary endpoint measures.  The device used in this study was Posit Science’s Brain Fitness Program.


Intellectual Property Trends
 Risks include:  if a company fails to protect its intellectural property rights, its competitors can take advantage of its technology/property and compete directly.

Leading Research Centers
  • University of California, San Francisco (UCSF)
  • Massachusetts Institute of Technology (MIT)
  • University of California, San Diego (UCSD)
  • Harvard University
  • Stanford University
  • University of California, Los Angeles (UCLA)
  • Columbia University
  • University College London (UCL)
  • Karolinska Institutet, Stockholm
  • RIKEN Brain Science Institute, Japan

Senior Communities Using Brain Fitness
  • Senior Star Community, Tulsa OK – Posit Science
  • Belmont Village Senior Living, Houston, TX – Dakim
  • Erickson Retirement Community, various communities 
    • Wii, Dakim
    • UCLA’s Memory Fitness
    • Posit Science 
Brain Fitness Technologies
  • List of Companies -- Software 
    • Advanced Brain Technologies
    • Applied Cognitive Engineering
    • Autogen
    • Brain Resource Company
    • BrainTrain
    • CNS Vital Signs
    • Cogmed
    • CogniFit
    • Cognitive Drug Research
    • Cogstate
    • Dakim
    • Gemstone
    • Houghton Mifflin
    • Lexia Learning
    • Lumos Labs
    • MyBrainTrainer
    • Nintendo
    • NovaVision
    • Posit Science
    • Scientific Brain Training
    • Scientific Learning
    • TeachTown
    • Wii
    • Lexicor qEEG
    • Thought Technology
    • Infinity System,
    •  FlexComp,
    •  ProComp,
  • Other NeuroTechnologies 
    • Hand held GSRs with all related programs,
    • EEGs,
    • neurotherapy systems,
    • SEMGs and muscle systems
    • Kiddie QR
    • Journey To The Wild Divine
    • Performance Enhancement System – Sue Wilson
    •  
  • Electrical and Magnetic Stimulation
    • Acumed Medical Supplies
    • Adaptive Technology Resource Centre (University of Toronto)
    • Advanced Neuromodulation Systems (ANS)/ Hi-Tronics Designs, Inc. (HDI)
    • Amrex Electrotherapy Equipment (Division of Amrex-Zetron
    • Austin Medical Equipment
    • Banner Therapy Products
    • Berkley Douglass Limited
    • BioMedical Life Systems
    • Chattanooga Group
    • Compex
    • CONMED Corporation
    • CPR Medical
    • Cyberonics
    • Delsys
    • Dynatronics
    • DynaWave
    • Electromedical Products International (EPI)
    • EME Services
    • Empi
    • Exogen/Smith & Nephew
    • Heart Math
    • Hill Laboratories
    • International Medical Electronics
    • Koalaty Products
    • LSI International
    • Magstim
    • MedFaxx
    • Medtronic (Medtronic Neurological)
    • Medical Services Company (MSC NESS Ltd.
    • NeuMed
    • Neuronetics
    • NeuroTech
    • Newcare Products
    • Noraxon
    • Northstar Neuroscience
    • OrthoLogic
    • Pharmaceutical Innovations, Inc. (PII)
    • Prizm Medical
    • Quality Health Products (QHP
    • Rehabilicare
    • Rich-Mar
    • RS Medical
    • Sparta Surgical
    • Somatics, LLC
    • Thought Technology Ltd
    • Vertis Neuroscience
    • Williams Healthcare Systems

References
SharpBrains, Aging in an Aging Society, Victor Marshall, UNC, Age in America Symposium, 1/1/08.
Sharp Brains
James Cavuoto, “The Market for Neurotechnology”, International Journal of Marketing, 1/18/02
“Electrical and Magnetic Neurostimulation:  Applications, Technologies, and Market Applications”, Kalorama Information, 9/04
Alzheimer’s Incidence Set to Quadruple by 2050”, Bio-Medicine
“First Cognitive Training To Demonstrate Generalization On Standarized Assessments Of Memory”, MarketWatch, 9/4/08,
Sonia Arrison ,“Thank Boomers for Buffing Up Brain Market”,
“Exercise Your Brain, or Else You’ll ... Uh ...”, New York Times, 5/3/08