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Chronic pain

More than 100 million Americans suffer from chronic pain.

Living in constant pain for an extended period of time can have a devastating impact on a person's quality of life. Without relief, or the hope of relief, many patients lose the ability to sleep, work, and function normally.

Back pain is the most prevalent type of chronic pain, affecting approximately 10 percent of the U.S. population. Many patients suffering from chronic back pain following spine surgery receive oral medications and other therapy, but many of them fail to obtain relief.

A neurostimulator is a surgically placed device about the size of a stopwatch. It delivers mild electrical signals to the epidural space near the spine through one or more thin wires, called leads. The electrical signals cause a tingling sensation in the area of chronic pain.

Three layers of tissue cover the spinal cord. The epidural space is the area of space between the outermost tissue layer and the inside surface of bone in which it is contained. The epidural space runs the length of the spine. It contains fat tissue along with blood vessels and nerve roots.

Medtronic (NYSE:MDT) and Boston Scientific (NYSE:BSX) are frontrunners in offering and developing devices that treat pain.

Medtronic

At 30 sites around the country, Medtronic is looking to recruit up to 323 patients who have undergone back surgery to participate in a large-scale study called SubQStim II. The trial is designed to test whether peripheral stimulation treatment can safely and effectively interrupt pain signals.

The device has already been approved for spinal cord stimulation, but Medtronic is hoping to extend the indication for post-surgical back pain. In spinal cord stimulation, the leads reach all the way to the spinal column. Peripheral nerve stimulation is a less-invasive approach which uses leads just under the skin.

PNS (peripheral nerve stimulation) involves an implant of electrical leads just under the skin of the lower back. These leads are connected to a stimulator which delivers mild electrical impulses to the nerves, interrupting pain signals traveling through the nervous system to the brain.

Medtronic received European CE approval in 2011 for the first 16-electrode, fully implantable system for the percutaneous delivery of PNS in the management of chronic back pain. The goal now is to obtain FDA approval.

For the first three months of the trial, patients will be divided into treatment and control groups. Afterwards, all will participate in an open label follow-up for up to five years. Medtronic's neuromodulation business includes implantable neurostimulation and targeted drug delivery systems for the management of chronic pain, common movement disorders, spasticity, and urologic and gastrointestinal disorders.

Boston Scientific

In April, Boston Scientific (BSX) received FDA approval for its Precision Spectra pain-relief device, which, the company claims, offers better coverage of the spinal cord than any product on the market.

The device is the world's first and only SCS (Spinal Cord Stimulator) system with Illumina 3D software and outfitted with 32 contacts and four lead ports, twice the capacity of any other approved technology. It is now cleared to treat chronic pain in the U.S.

The company now holds the second largest share of the U.S. market, and the launch of Precision Spectra gives Boston Scientific an opportunity to beat the competition, according to Neuromodulation President Maulik Nanavaty, who said:

This is a really huge launch for us. Spectra has been 7 years in the making, and it's sort of a Holy Grail for the therapy of pain and treatment of pain.

Spinal cord stimulators deliver electrical pulses from an implantable pulse generator to leads with stimulating contacts in order to mask pain signals traveling to the brain.

The Illumina 3D software is the first SCS programming technology based on advanced anatomical and scientific principles. It is designed to improve control of the stimulation field. The software is based on a proprietary computer model that takes into account 3D anatomical structures, including the conductivity of the spinal cord and surrounding tissue. The physician simply selects a desired location on the spinal cord and the programming software creates a customized stimulation field to mask the patient's pain.

Until now, SCS systems offered a maximum of 16 contacts and two lead ports, with each lead port allowing the placement of one lead. Additional lead ports give physicians more flexibility to cover their patients' pain at the time of implant and more flexibility to adapt to changing pain patterns in the future. With more contacts, the Precision Spectra System also offers more coverage of the spinal cord for the management of chronic pain.

Neuromodulation

Neuromodulation devices have emerged as one of the fastest growing segments of the medical device market. Neurostimulation provides pain relief by blocking the pain messages before they reach the brain. The neurostimulator sends out mild electrical impulses that reach the brain faster than the pain signal can arrive. Instead of pain, the person feels a tingling sensation.

The main driver for the neuromodulation market is the rising population of aged people who suffer from age-related diseases like Alzheimer's, epilepsy, spinal cord injury, and Parkinson's disease.

According to the International Neuromodulation Society, about 40 to 50 million patients worldwide suffer from epilepsy, and 1.5 million people currently suffer from Parkinson's disease in the U.S. Also, a large pool of people suffer from depression, strokes, anxiety disorders, lower back pain, urinary incontinence, and tremors. With advancements in technology, neuromodulation could provide relief for all of these conditions, offering the industry huge opportunities for growth.

The neuromodulation devices market includes deep brain stimulation, spinal cord stimulation, vagus nerve stimulation, sacral nerve stimulation, and others.

Neurostimulation provides advantages over other therapies for chronic pain. For example:

  1. A patient can try out neurostimulation before committing to long-term therapy, an opportunity not afforded by other pain treatments or surgeries.
  2. The procedure does not have to be permanent. The neurostimulator can be surgically removed if the patient decides on a different treatment.
  3. Unlike oral medications that circulate throughout the entire body, neurostimulation targets the precise area where the pain is felt.
  4. A neurostimulator may provide relief when other treatments, like medications or injections, have failed.

Competition

Medtronic and Boston Scientific are not alone in chasing a share of the multi-billion dollar neurostimulation market. Millions in venture capital have gone to small companies to develop newer pain-relief implants.

California based Nevro is working on a spinal-modulation device for pain management using higher frequencies to cover a larger area with fewer side effects than the existing devices. It is heading toward FDA approval.

Cleveland based Neuros Medical is developing a neurostimulation treatment to address amputee pain.

Another Californian company, NeuroPace, is on the path to FDA approval for its anti-epilepsy neurostimulation device, having won unanimous backing from the agency's neurological devices panel earlier this year.

Investor summary

Chronic pain suffered on a mass scale represents a severe financial burden for society, but also a huge potential market. In 2011, the Institute of Medicine reported that the 100 million Americans living with pain cost up to $635 billion a year.

Chronic pain costs the European healthcare system as much as 300 billion euros a year in medical treatment and lost productivity. A 2013 survey reported that one out of five Europeans suffers from chronic non-cancer pain. That ratio holds true throughout the developed world, where 20 percent of people live with chronic non-cancer pain, according to the WHO.

Medtronic: In the third quarter, ending on January 25, 2013, neuromodulation revenue amounted to $447 million, an increase of 7 percent from a year ago.

Growth was driven by the solid new implant growth of Activa deep brain stimulation systems, strong sales of InterStim Therapy for both urinary and bowel indications, and continued strong U.S. adoption of the RestoreSensor spinal cord stimulator, with its proprietary AdaptiveStim technology.

Neuromodulation is the second-oldest and third-largest of Medtronic's business units. It all started when the company applied its expertise in heart electrical stimulation to developing treatments for diseases and conditions involving the nervous system.

Medtronic is the leader in the field. Its products include neurostimulation systems and implantable drug delivery systems for chronic pain, common movement disorders, psychiatric disorders, and urologic and gastrointestinal disorders.

Boston Scientific: Neuromodulation income for the first quarter of 2013 was $89 million, up 6 percent from the same period a year ago. Neuromodulation is Boston Scientific's fastest-growing unit, charting a 9 percent revenue jump in 2012 and a 14 percent leap in the fourth quarter alone.

CEO Mike Mahoney has preached a turnaround for the device giant since taking the reins two years ago. His plan for returning the company to annual growth involves investing in two segments: neuromodulation and renal denervation, while slashing costs and jobs.

The company now holds the second largest share of the U.S. market, and Boston Sci's Neuromodulation President Maulik Nanavaty believes that the launch of Precision Spectra gives Boston Scientific a chance to beat the competition.

Source: Medtronic And Boston Scientific Are In A Race To Build A Better Pain Device