Elon Musk is investing millions in technology to enhance and connect the brain to robots and prosthetics. So far, this kind of technology has been limited by our current hardware.
Upstart NeuroOne Medical (NMTC) could change that with their first FDA approved device, anticipated by the end of this year - a thin-film electrode that was pioneered at The Mayo Clinic. This prestigious institute owns 10% of NMTC, validating the tech.
NMTC is still new to the public markets and has yet to get much investors attention. A planned FDA product filing and approval, expected in the second half of 2018, could send NMTC ripping by 2X or 3X.
The potential to "hack" the brain has been a dream of scientists and futurists for years. We're still far from pairing the intricate human mind with the calculating qualities of computers, but progress is being made, and it's attracting some of the smartest minds of the century.
Tesla's (TSLA) own Elon Musk has launched a new company called Neuralink Corp to pursue implanting tiny brain electrodes that may one day upload and download information straight into the human mind. Braintree co-founder Bryan Johnson has launched his own brain hacking startup called Kernel, where the prevailing question is when, not if, humans will have brain implants improving our lives.
Both founders are realistic about how much work there is to be done, and the reality today is much less sexy. Very few people have multiple electrodes implanted IN their skulls. The few applications today are in Parkinson's and other neurological conditions, where they can help to alleviate symptoms and restore movement to some paralyzed patients. The limitations are mostly due to a lack of high-quality, flexible electrodes that can stay in the brain for long periods of time.
That could change in 2018. A new upstart biotech company with backing from the prestigious Mayo Clinic (a 10% equity holder) is bringing a unique implantable electrode array to the market, with a goal of FDA approval by the end of this year. NeuroOne Medical (NMTC) isn't on most investors' radars, even though the company could be generating revenue by this time next year in a large market - they could easily capture tens of millions in sales within a few year's time considering the substantial improvements in their thin-film electrodes over old, bulky technology. 2018 could be a breakout year for NMTC, and the stock could easily double with a possible FDA clearance. Factoring in multiple FDA catalysts, commercial traction and a possible uplisting to a senior exchange within the next 12 months, the stock could be valued at multiples of where it currently trades.
Neural Hacking Could Be Closer Than You Think
The first brain interfacing devices are already here, though they're not exactly mainstream. Deep brain stimulation, which uses small electrodes and low current, can reduce the symptoms of Parkinson's disease, Epilepsy, and certain movement disorders. Amputees are able to operate increasingly impressive prosthetic limbs using their thoughts. Second Sight Medical Products, Inc. (EYES) is helping the blind "see" with their Argus II retinal prosthesis already, for example, and a recent DARPA-funded project actually resulted in improved memories for patients with epilepsy; the doctors are calling it a "Prosthetic Memory."
Think of the brain as a massive network of electrical connections. Figuring out how to interface with this giant computer is a matter of identifying the right connections and inserting electrodes that can either replace damaged connections - as is the case with some current prosthetics - or enhance and expand on some connections, which is what Kernel and Neuralink hope to do.
This is an emerging market, but research firm Grand View Research believe it to be immense. The global microelectronic medical implants market size is anticipated to reach $57 billion by 2025, with a 9.8% CAGR during the forecast period. This includes things like pacemakers, but cochlear and ocular implants as well as neurostimulators are expected to be a major growth driver as this tech evolves in the next ten years.
One Problem Is Connectivity
There are a few major hurdles.
First, we still have a LOT to learn about the brain and how it works. The brain has approximately 100 billion connections, like small wires, that pass electrical signals back and forth to control bodily functions. These nerve cells are how sight, touch and sound are measured and then translated to the brain. Mapping the brain to figure out what connections do what, and where, is a monumental task, and it's only just begun. Akin to the mapping of the human genome in the late 20th century, we've only scratched the surface of understanding how to interact with and potentially control these connections in the brain. Many common disorders are the result of damage to these physiological wires.
Second, electrode technology hasn't evolved as rapidly as the chips and infrastructure that have made computers smaller and cheaper over the last 30 years. One of the major fundamental roadblocks to implantable replacement or enhancement "wiring" has been a lack of capable electrodes that can be placed within or on the brain and work reliably for the lifetime of a subject. These would have to be strong, but soft enough to conform and match the tissue of the brain to avoid damaging this critical infrastructure. Today's electrodes are bulky and often cause inflammation in the brain over time - they simply don't always hold up.
Elon Musk and Bryan Johnson have started companies based on the idea that millions of wires can soon be safely implanted in the brain, but so far they've been missing this critical piece of equipment.
NMTC's New Mayo Clinic-Backed Tech Could Change Everything
What's going on at NeuroOne is highly interesting in light of the push by visionaries like Musk and Johnson. NeuroOne's proprietary technology, which is anticipated to have an FDA 510k approval by the end of the year, can provide exactly what may be missing today - a platform where thousands of soft wires can both record and generate electrical signals safely in the human brain.
NTMC's core technology lies in manufacturing thin-film electrodes; the company just went public in 2017 with The Mayo Clinic as a key backer and equity holder. The prestigious institute owns 10% of the company's outstanding shares, and the company's lead technology actually emerged from a partnership with Mayo's neurology division. A number of Mayo researchers are on the company's advisory board.
NeuroOne's thin-film electrode technology has a more brain-friendly material than today's devices, which can reduce inflammation and improve electrical signal clarity for better diagnosis and electroencephalography readings. This offers high-resolution EEG recording to increase the accuracy of diagnostics, improving resection planning and outcomes - it's like comparing the high-definition television displays of today to older tube technology of the 70's. The tech also utilizes disposable, sterile cables, saving EEG techs time and extensive costs related to cable management, which is part of the process today. And most importantly to many patients, the technology may be implanted through non-invasive methods, without the need to remove part of the brain.
Completely Undiscovered, NMTC Could Fly in 2H18
NMTC is a micro-cap stock and carries certain risks. The company could have trouble financing the business, and they still face competition from larger device companies. You should view NMTC as a high-risk high-reward option on the medical device space.
NMTC is planning their first U.S. Food and Drug Administration (FDA) device submission for the second half of this year, and they could receive a clearance from the agency by the end of the year. This is a major event for any healthcare company, and we've see how rapidly things can change for small-cap medical stocks: GalMed Pharmaceuticals (NASDAQ: GLMD) recently rallied over 200% with some new clinical trial data in liver disorders. In fact, robotics-focused Ekso Bionics (NASDAQ: EKSO) last year rallied over 3X in the course of one week when their own bionics product was rumored to be impemented by Ford (F) motor company; could NMTC see a similar implementation by the likes of Neuralink or Kernel? NMTC could be set up for their own surprise rally in 2018 as their potential FDA clearance approaches.
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