Rewiring the Body

Exotic implants are bringing new hope to victims of epilepsy,

paralysis, depression, and other diseases

By Michael Arndt
Business Week

Reed S. Kohn has donated his brain to science. An epileptic since he was 8 years old,
Kohn has tried everything from experimental drugs to harrowing surgery to control
his seizures. Time and again, neurosurgeons have taken out bits of his brain that
spark his hallucinations, or auras, and have severed nerves that enable aberrant
electrical impulses to arc from lobe to lobe and generate a full-blown seizure. They
have also run filaments to a nerve in his neck and to the core of his brain to
microshock the disease into submission. Inevitably, though, the illness reemerges,
corrupting a new clump of brain cells, and he is disabled once again. A college grad
and certified computer programmer, Kohn lives with his parents at age 34 and has
never had a job. Since his first seizure in 1978, he figures he has had 10,000 more.

His life may get better. Last fall, Kohn underwent his 12th operation. First, doctors
scrutinized images of his brain as it malfunctioned. Then, guided by these scans,
they wired electrodes to eight "hot spots" deep in his brain, and implanted under his
skull a pacemaker-like device from NeuroPace Inc. in Mountain View, Calif. About the
size of a microcassette tape and only a bit heavier, it houses a microprocessor
programmed to detect the brain-wave pattern that precedes a seizure. Whenever
this pattern arises, it immediately zaps the trigger sites with tiny jolts of electricity.
The goal is to override his abnormal synapses and restore normal brain activity
before Kohn is even aware that a seizure is brewing.

Since the operation on Oct. 14, Kohn has been averaging 10 to 15 seizures a month,
down from 50 to 70. As a veteran guinea pig, Kohn knows that it takes at least six
months before anyone can truly gauge how well a treatment works, so he doesn't
want to rush to judgment. "I'm feeling pretty good," he says. His doctors, who
believe they can lower that rate by tinkering with the device's settings, are less
guarded. "We've been looking for solutions for a long time," says Dr. Richard W.
Byrne, a neurosurgeon at Rush University Medical Center in Chicago who installed
the device. "This could be it."

Forty-five years ago, doctors successfully implanted a cardiac pacemaker for the first
time in the U.S., providing long-term hope for millions of people with heart disease
and creating what has become a hugely profitable -- and still fast-growing -- $10
billion-a-year business. Now, electrical therapy may be approaching an historic
transition. Using advances in pacemaker technology, researchers and doctors are
finding that rapid-fire bursts of low-voltage electricity can alleviate symptoms in an
astonishing number of illnesses in many other parts of the human body. Scourges
such as depression, post-stroke paralysis, migraines, sleep apnea, angina,
obesity, tinnitus, and digestive tract disorders all may be treated with
neurostimulators by the end of the decade. If early-stage experiments pan out,
Alzheimer's disease, obsessive-compulsive disorder, Tourette's syndrome, bulimia,
and other brain ailments could be next.
Mysterious Ways
Many doctors are thrilled by this emerging vision of the body electric because it
provides fixes beyond the ken of the medical mainstream. Life sciences today are
heavily swayed by recent advances in molecular biology. The Human Genome Project
and other well-funded efforts have cracked some of the inner workings of genes and
the biochemical pathways of disease. In contrast, science has paid less attention to
the role of electricity, which governs everything from the ethereal transmission of
thought to the rhythmic music of the heart. The race to design and test new
implantable devices could help correct this imbalance.

The high-tech implants are neither cheap nor risk-free. For one thing, they must be
replaced every 5 to 10 years. Why they work is also still something of a mystery.
What's more, neurostimulation won't cure most diseases, even though it eliminates
or alleviates some symptoms. Doctors note that much of the research is in an early
stage. It could be 10 years before they can say for sure if some devices are a fix --
or a flop.

But the potential upside is great. Unlike most drugs, these implants produce few side
effects. And while they might be a burden on insurers initially, studies show that
they should save big bucks on hospitalization over time. The devices also are aimed
at prevalent diseases that can't always be treated with drugs. As a result, medical-
products executives and their surgeon partners predict that such implants could one
day become as common as cardiac devices, which are currently helping 2 million
Americans.

Little wonder, then, that some of the biggest names in health care are in a scramble
to get into the market. Most recently, in December, Johnson & Johnson (JNJ ) bought
implant-maker Guidant Corp. (GDT ) for $23.9 billion. "Any organ that a nerve
can influence -- and that's every organ in the body -- can be affected using
this technology," says Dr. Ali R. Rezai, who is director of functional
neurosurgery at the Cleveland Clinic. "It's a new era in neurology."

The use of implantable mini-generators is more widespread than you probably think.
Already, 190,000 patients are wearing electrodes in their heads to control
Parkinson's disease tremors or spinal-cord stimulators to relieve pain or prevent
urinary incontinence. Some 30,000 have wires threaded to the vagus nerve in the
neck to treat epilepsy, while 60,000 have microtransmitters in the inner ear enabling
them to hear. These numbers are likely to grow -- and quickly. One of the most
promising devices is a $15,000 neurostimulator for chronic depression from
Cyberonics Inc., which the Food & Drug Administration conditionally approved on
Feb. 2.

Candy Bradshaw can testify to the power of neurostimulation. She had a gastric
pacemaker implanted in her abdomen in 1999 at Tufts-New England Medical Center
in Boston as part of an early-stage trial sponsored by Transneuronix Inc. Today,
Bradshaw, 47, weighs 200 pounds, down from 280 before surgery. She still has to
watch her diet and exercise regularly. But the device makes her feel full sooner than
before, so she eats less. "What it has done is fantastic," says Bradshaw, an office
manager in Worcester, Mass. Executives of Transneuronix in Mt. Arlington, N.J., say
the implant, now in a pivotal trial, could be available as a less-invasive alternative to
stomach stapling within three years.
At Indiana University Medical Center in Indianapolis, researchers hope
neurostimulators might enable paraplegics to walk again. Their device beams
microvolts of electricity through six surgically installed electrodes to the site of a
spinal cord injury. The electric field reverses direction, or oscillates, every 15
minutes. In a just-completed experiment on 10 volunteers, oscillating stimulation
helped nerves regenerate after 14 weeks of treatment, say doctors in the study, a
joint venture between Indiana University and Purdue University. Two patients even
recovered some movement in their legs, and one man who had been impotent
regained sexual functions. Doctors, fully aware that earlier efforts in this area failed
to achieve results, now are screening paraplegics for a second round of trials.

Infection Risk
As neurostimulators get even smaller and their microchips more powerful,
researchers foresee new uses for these implants. Advanced Bionics Corp., a startup
that Boston Scientific Corp (BSX ). acquired in 2004, is testing a rechargeable device
so tiny that it can be injected almost anywhere in the body to treat pain or muscle
dysfunction. Implants also could act as sensors, telling a miniature pump when to
deliver a drug or customized protein to a precise location in the body. "The body is
on fire with electricity," says Dr. Stephen N. Oesterle, chief medical officer at
Medtronic Inc (MDT )., the No. 1 maker of implantable electrical devices. "If you
start with that concept, then all you need is imagination."

As with any invasive procedure, there are dangers in implant surgery. When a
cardiac device is implanted, for example, the rate of infection is 3% to 4%, which is
twice the average rate for surgery in general. Batteries in these devices last only 5 to
10 years, which means patients may need a second implant. (The second operation
is generally easier and less costly, since the electrical leads can be left in place.)
Some device experts have expressed concerns about airport scanners interfering
with implants. And the devices can fail. Last year, Medtronic had to recall thousands
of defibrillators after discovering that their batteries were running low too quickly. At
least four people died as a result of the product defect. On the other hand, sick
people die after undergoing other therapies, or doing nothing. All in all, "these are
low-risk products," says Dr. Stuart M. Portnoy, a former cardiac-device specialist at
the FDA and now an industry adviser with PharmaNet, a Princeton (N.J.) consultant.

The neuromodulation market is potentially enormous. There are up to 3 million

Americans with chronic migraines and 4 million with depression who do not respond
to drugs. The number of morbidly obese American adults is also estimated at 4
million. An additional 5 million Americans have been crippled to some degree by
stroke, and the number grows by about 750,000 each year. Most of these people
won't rush out and have surgery. But if only a fraction get an implant, executives at
medical-device companies project that overall sales of noncardiac pulse generators
should balloon from $1.6 billion today to $10 billion in 10 to 15 years, depending on
how quickly the FDA approves new uses. "Ultimately," says Todd K. Whitehurst, vice-
president for emerging indications at Advanced Bionics in Valencia, Calif., "this is
going to be as big as cardiac-rhythm management."

The returns for investors may also be substantial. Today, most neurostimulators
don't make money because years of research and development and marketing
outlays overwhelm what are, in the beginning, only trickling revenue streams. Still,
Advanced Neuromodulation Systems Inc. (ANSI ), of Plano, Tex., averages gross
margins of 70% on its spinal-cord device for chronic pain. Houston's Cyberonics,
Medtronic, and Boston Scientific -- the other companies with FDA- approved
neuromodulators -- all boast even fatter margins.

As sales grow, device makers will be able to spread their expenses over a wider base
and become more efficient manufacturers. If the FDA approves their new treatments,
says Jan D. Wald, a medical-device analyst at A.G. Edwards & Sons Inc. (AGE ) in
Boston, pretax earnings at the smaller companies should rise to 20% to 30% of
revenue, equaling the return on more established products such as pacemakers.
"The market is close to an inflection point," he says. Mark Landy, an analyst at
Susquehanna Financial Group in Bala Cynwyd, Pa., also sees the market growing by
20% for the next several years. For now, though, he cautions against buying these
stocks, saying the share prices are already based on outsize returns.

Nevertheless, as more patients request implants for conditions that drugs can't treat,
the creaky health-care system will have to brace itself for yet more financial strain.
Today, a patient with migraines might get by on $10 a day for drugs. A
neurostimulator, by comparison, typically costs $15,000, or about as much as a
heart pacemaker or defibrillator. The total bill can hit $50,000 with doctors' and
hospital charges. Equipping just 10% of the estimated 500,000 Americans with
epilepsy that drugs can't help could cost $2.5 billion. Even amortized over the
average 7 1/2-year life of a device, that $50,000 would cost about $17 a day.

Too Much of a Good Thing?

Beyond the sticker shock, officials at the government's Centers for Medicare &
Medicaid Services (CMS) also worry that, as with other glitzy treatments, too many
of these devices might end up in patients who don't really need them. Sean Tunis,
the agency's chief medical officer, points out that the nation might get more bang for
the buck if physicians did less expensive things first -- for instance, routinely
screening people for depression and putting them on medications before their
conditions become untreatable. "There's no end to the numbers of new devices that
are being developed, but there is a limit to how much employee-benefit plans can
absorb," warns Karen Ignagni, chief executive of America's Health Insurance Plans, a
trade group representing the major health insurers.

Over time, however, these devices may restore more than lives; they could save
money, too. In a comprehensive review of spinal-cord stimulation, a doctor and an
economist at Maastricht University Hospital in the Netherlands reported in 2002 that
the cost of implanting the device was offset by savings on physical therapy and other
expenses in 2 1/2 years. The study's authors, who tracked 54 patients over five
years, also extrapolated that over a lifetime, each patient would save $60,000. CMS
and most major private health plans such as Blue Cross Blue Shield Assn. cover
implants for FDA-allowed devices, although reimbursement rates and prerequisites
for surgery vary.

Neurostimulation has another selling point: Because the implants alter tissue only at
their points of contact, side effects are generally negligible. In epilepsy patients with
electrodes implanted to pulse the vagus nerve, the most dire side effect is
hoarseness, sometimes accompanied by the desire to clear the throat. Only 3% of
such patients report this minor complication. Most say they can't sense the
stimulation at all. Contrast that with the most common drug treatment, Dilantin,
which can cause dizziness and nausea and can lead to liver damage. "Think of the
device as a smart bomb,"says Advanced Neuromodulation (ANSI ) CEO Christopher
G. Chavez.

Medical-device executives and surgeons point out that today's implants are not
generally intended to be a first-line treatment. Someone with heart trouble, for
instance, would start off on a cholesterol-reducing drug and a stricter diet before
getting outfitted with an implantable defibrillator. The same goes for
neurostimulators, which are meant for patients with illnesses or disabilities for which
there are no other treatments. People like Judith Walsh of Elmwood Park, Ill. In
1999, when Walsh was just 54, she suffered a stroke that paralyzed her entire left
side. Thanks to aggressive physical therapy, she recovered the ability to speak --
and also learned how to walk again. But her left arm remained atrophied, with her
left hand permanently clenched in an almost-useless fist.

Last February, Walsh began electrical-stimulation therapy. In a clinical study

sponsored by Northstar Neuroscience Inc., doctors at Northwestern Memorial
Hospital in Chicago implanted a pacemaker in her chest and tunneled wires up her
neck to her head. They drilled through her skull to place an electrode patch about
the size of a postage stamp on the protective membrane surrounding her brain, close
to the swatch that had been killed by the stroke. The surgery took 90 minutes. For
the next six weeks, even though she couldn't feel it, the device bathed the target
site with electricity as she willed her left arm and hand to move during 3 1/2 hours
of supervised rehab every day. Then the implant and electrodes were surgically
removed.

Today, Walsh can make a peanut-butter and jelly sandwich and grip the steering
wheel of her car with her left hand. More gratifying, she says, she can feed and dress
her five-month-old granddaughter, Emma, things she couldn't do with her three
older grandchildren when they were babies. "It's hard, as a grandmother, not to be
able to hold the grandchildren -- and now I'm able to do that," she says. "It's the
thrill of my life." Executives at Northstar, a Seattle startup financed by J&J and
Boston Scientific, among others, are now negotiating the parameters of a final-stage
clinical trial with the FDA.

The question remains: How do these devices alleviate symptoms? In the case of
rehabilitating stroke victims, doctors aren't sure whether the stimulation enables
brain cells in proximity to the stroke site to learn new functions or whether the
pulses instead are helping cells in stroke-damaged tissue regenerate. Similarly,
doctors are baffled as they test pacemakers to treat obesity. They know the device
stimulates nerves in the stomach to tell the patients they are no longer hungry. But
they're not sure which organ is being tricked: the stomach itself or the brain. "There
must be a central mechanism," says Dr. Jay B. Prystowsky, chief of gastrointestinal
and endocrine surgery at Northwestern Memorial, "but the bottom line is we really
don't know exactly how this works."

Burst of Uses
For such basics still to be a mystery is odd, considering how long science has been
studying electrical stimulation of the body. As far back as the late 1700s,
experimenters showed they could make muscles twitch with shocks from static-
electricity generators. By the 1930s, as engineers perfected how to control the
frequency and flow of electricity, scientists were dabbling with battery-powered
pacemakers to pulse the heart. These early devices were bulky, requiring patients to
be anchored to an external contraption. Then in 1960, electrical engineer Wilson
Greatbatch patented the first successful implantable pacemaker. Finally, in the mid-
1990s, the FDA began approving pacemakers for uses outside the heart.

Now, after that initial burst of approvals, a raft of new treatments may be around the
corner. On Feb. 2, the FDA cleared Cyberonics' vagus-nerve stimulator for chronic
depression, pending some clarification on the labeling of the device. Chairman and
CEO Robert P. "Skip" Cummins says Cyberonics analyzed results from 240 people
with long-term depression after two years of neurostimulation. All of the subjects
had failed to respond to drugs. The analysis found that half the patients were
markedly better, with 18% reporting they were no longer depressed. With the FDA's
go-ahead, Cummins says, Cyberonics will begin pilot studies on Alzheimer's disease,
headache, anxiety disorders, and bulimia. Medtronic also may be closing in on a
number of new therapies. Its products are in clinical tests to pulse the thalamus to
treat epilepsy; another region of the deep brain to treat migraines, depression, and
obsessive-compulsive disorder; the hypoglossal nerve in the neck to treat sleep
apnea; the sacral nerve to treat bowel disorders; and the stomach to treat obesity.
Medtronic may have a deep-brain treatment for epilepsy in two or three years.

New treatments may become feasible as device sizes shrink and rechargeable
batteries evolve. Advanced Bionics, for example, has developed a rechargeable
implant that is about the size of an ink tube from a ballpoint pen cut to a one-inch
length. Its first use, already permitted in Europe, is to prevent bladder incontinence
by stimulating the organ directly, rather than through the sacral nerve. The Boston
Scientific subsidiary also has begun a stage-one trial to see whether the device can
alleviate chronic headaches by injecting it into the base of the skull to stimulate the
brain's occipital lobe. And soon, company executives say, they hope to start testing
the device in the leg and arm as a therapy for pain or carpal-tunnel syndrome.

The leading cardiac-device makers are packing their newest implants with enough
computing power to sense the environment around them and alter a patient's
treatment as needed. A next step would be to link sensor-laden neurostimulators to
miniature drug pumps. In this way, a patient could be dosed exactly when needed
and at the precise site where the medication is most effective. Researchers say this
could reduce dosages by a thousandfold and avert side effects. Such systems would
also enable a patient to be treated with bioengineered drugs and proteins too large
to be absorbed by swallowing a pill. The combined therapy seems most promising in
the brain, where many disorders might be tackled with protein drugs complemented
by electrical pulses.

As these new therapies move closer to reality, the medical-products companies are
putting down their markers. Last June, Boston Scientific paid $740 million in cash to
acquire Advanced Bionics. Boston Scientific also holds a 14% stake in Cyberonics.
Then in December came J&J's megadeal with Guidant. Although Guidant does not
have any neurostimulators in clinical trials, the Indianapolis company has been
earmarking an increasing share of its R&D budget for these devices. Some medical-
products executives predict J&J or Boston Scientific could buy Cyberonics or
Advanced Neuromodulation next.

Implants won't cure everything that ails us. The Parkinson's treatment, for one,
stops tremors but can't halt the deadly disease. Yet the list of therapies is growing.
And they all benefit from advances in microelectronics and our deepening
understanding of the brain and nervous system. "These de- vices were science-
fiction dreams 20 years ago," marvels Dr. Robert Levy, a Northwestern Memorial
neurosurgeon who has seen neurostimulation give stroke victims like Judy Walsh use
of their hands and arms again. The body, as medicine is learning, truly is electric.

SOURCE: Business Week