1. The Emergence of Therapeutic Neurostimulation: Reducing Barriers to Innovation and Growth John Reppas MD- PhD Director of Public Policy American Society for Experimental NeuroTherapeutics | 15 th Annual Meeting

2. Learning Objectives What is the current industry landscape for innovation and investment in neuromodulation? How will therapeutic neuromodulation, in both its existing and emerging form, impact clinical care in the next decade? American Society for Experimental NeuroTherapeutics | 15th Annual Meeting

3. 2000 Years of Neuromodulation AD 70AD 1870AD 2013

4. Neuromodulation: it’s not easy … Weakly translatable preclinical models. Challenging clinical development: subjective rating scales; placebo effects; absence of surrogate end-points; long- term risk of behavioral side effects and adverse events. Post-market challenges: does it work ? (TMS); in whom will it work ? (SCS); who will avoid/tolerate side effects ? (SCS); which symptoms will it modify ? (DBS); how long will it take to work ? (DBS) Tenuous provider/payer/patient acceptance ↵ ↵ ↵

5. … but the risk can be managed For CNS, seek label extension and new indications for approved therapies. Target the predicate-device regulatory pathway. Innovate around clinical workflow, cost and patient experience: safer/cheaper/easier to deploy devices. Stay away from CNS: target neuromodulatable indications with clear regulatory precedent from therapeutic development.

6. Medical Device Innovation in 2013

7. Neuromodulation Financings: Later Stage

8. Neuromodulation Financings: Early Stage

9. Transcranial Magnetic Stimulation (TMS) Current Clinical Status: 30+ year old technology; single approved platform – Neuronetics ®; single approved indication - treatment-resistant depression. Drivers of Adoption: safety; R x side effect avoidance; label extension, new indications. Headwinds: perception of marginal efficacy; reimbursement; clinical work-flow; patient inconvenience of daily treatment. Innovation Horizon: coil/protocol design to target deep bran structures; novel indications; new treatment modalities (e.g. focused ultrasound).

10. TMS: Clinical Innovation – New Indications

11. TMS: Technology Innovation – Coil Design

12. Deep Brain Stimulation (DBS) Current Clinical Status: 15+ years since first regulatory approval; multiple approved indications in movement disorders and psychiatry. Drivers of Adoption: potential to personalize symptom management (Patient-Centric Outcomes); unmet medical need; potential as a first-line therapy in PD. Headwinds: invasive procedure; patient consent; patient and caregiver perception; demonstrate risk-adjusted benefit in new therapeutic areas. Innovation Horizon: closed-loop modulation; MR-compatible devices; optimized pulse programming; new indications; disease modification, not just symptom modification

13. DBS: Clinical Innovation – New Indications

14. DBS: Technology Innovation – Closing the Loop

15. Spinal Cord Stimulation (SCS) Current Clinical Status: established procedure; 50k cases/year world-wide; indicated for FBSS; LBP. Drivers of Adoption: prevalence of Rx- resistant back pain; age/BMI demographics; federal narcotic policy. Headwinds: need for repeat procedure; reimbursement; procedure failure rate; side effects -- parasthesias, bowel and bladder capture. Innovation Horizon: high-frequency stimulation; miniaturized electrodes, w/ external power supply & pulse programmer; better epidural lead positioning.

16. SCS: Technology Innovation -- Wireless

17. Peripheral Nerve Stimulation (PNS) Current Clinical Status: established procedure; indicated for bladder and bowel voiding problems, and incontinence. Drivers of Adoption: new indications; areas of high unmet medical need (e.g. OSA, migraine). Headwinds: currently indicated for small markets/orphan indications; procedure complexity; reimbursement. Innovation Horizon: optogenetic modulation of motor/sensory nerve fibers selectively with nerve cuff; new indications for cranial-nerve stimulation; comparative and cost effectiveness.

18. PNS: Technology Innovation – Cranial Nerves

19. PNS: Technology Innovation -- Optogenetics

20. PNS: Reimbursement Innovation

21. Neuromodulation: a new front

23. Impact on Clinical Care and Practice The medical device industry and other technology investors are committed to funding neuromodulation. Device innovation will center on externalized power and control, while miniaturizing the implantable component. The procedure to implant these devices will be faster, cheaper and safer and will enable broad anatomic access to the peripheral nervous system and end organs. In the next decade, advances in therapeutic neuromodulation with be retrograde: greatest in the innervated end-organ, least in the CNS.