9 JANUARYAs a VC in the neurotechnology space, we have seen many exciting technologies that would never actually reach mainstream adoption because of this barrier. Diagnostic technologies are left without buyers (outside of research institutions), and therapeutics remain a risky proposition with a graveyard full of failed drug candidates (even more so than normal in therapeutics).Despite seeing significant grant-funded exploratory projects, the fact remains that they aren't scalable investment opportunities because ultimately, they aren't going to reach mass adoption in healthcare.THE RIGHT TIME TO STEP INAs financial investors, we occupy a specific space in the technology development landscape. That is, well after the initial concepts have been fleshed out. Research institutions, often supported with government grants, develop basic science and technology while private foundations, non-profit institutions, and specific institutions (like the National Institutes of Health, NIH) can provide even more funding and take researching those initial concepts further.The right time for financial investors to step in is when a specific concept is meant to be commercialized--actually brought to market and then scaled. These kinds of activities are generally not supported by grant funding and require private investment. But for this step to work, there needs to be a potential return in a reasonable timeframe. To understand where that leaves us, we need to consider the current state of neurology.THE ROAD TO SUCCESS IS LITTERED WITH FAILURESIt's important to note just how few treatments have been successfully created for neurological diseases. In fact, the biopharma landscape is littered with thousands of attempts at treating neurological diseases across the spectrum, yet we've only cited two here since they arguably present the most notable successes from thousands of candidates.Aducanumab, sold by Biogen as Aduhelm, gave us a small glimpse into the opportunities for investing in technology aimed at neurological disease. The drug was the first to ever be approved for Alzheimer's disease--the holy grail disease target that comprises 70% of all dementia cases. Biogen struck gold--that is, before a massive backlash at the $56,000 per person per year price cost and ensuring scrutiny of its questionable FDA approval--snd the company serves as an example of the kind of economic opportunity that even slight hope in Alzheimer's can provide.Another area of opportunity lies with Multiple Sclerosis (MS) where, over the past decade, pharmaceutical companies that have created treatments have been repeating massive rewards while simultaneously increasing out-of-pocket costs 20x between 2004 and 2016 for people taking MS drugs.Still, one can argue that Aduhelm doesn't really count as a true treatment since it can't be used once Alzheimer's is fully realized. This leaves MS as one of the few neurological conditions that can be treated versus merely managed. VCS SHOULD TARGET PLATFORMS IN TREATABLE DISEASESMost companies aren't developing therapeutics. However, around every major disease category is a robust ecosystem of diagnostic, tracking, and management technologies. Although completely untapped markets may be exciting, it's important to remember the highly uncertain timeframe of when certain treatments will (ever) be discovered and brought to market.Combining the limited treatments available with sheer market potential, we recommend investing in companies that have broad platform potential and specifically target neurological diseases that can be treated today.This logic brought us to C.Light Technologies, a rapid diagnostic tool that can very granularly track and differentiate neurological diseases--starting specifically with MS but possessing the capacity to handle concussions, Parkinson's, and even Alzheimer's disease in the future.The potential of the market dictates that investors should want to invest in it. And unfortunately, the market opportunity continues to grow alongside our aging population as more and more individuals become afflicted with neurological diseases every day. From a societal perspective, it's critical that we bring new generations of technology to solve the problems that proved so unyielding to past generations. But we must do it the right way. Otherwise, we not only risk capital, but also a broader disillusionment that could depress investment in companies targeting neurological diseases for years--a boom and bust cycle that would be reminiscent of AI in the late 90s, gene therapy, the first-generation climate tech from early 2010s, and numerous other fields.
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