Test of Brain Device Is Setback for Maker
Any impact that Tuesday’s plunging stock markets might have had on Northstar Neuroscience was lost in the bad news released before trading began — results from a crucial clinical trial showed that its brain-stimulating device failed to help stroke victims recover the use of their arms and hands.
Northstar, which is based in Seattle, said it would drop efforts to have the therapy approved by regulators. Northstar’s stock, which ended Nasdaq trading on Friday at $8.36, plunged as low as $1.09 before recovering slightly to end the day at $1.37, down 83.6 percent.
The trial results highlighted the hit-or-miss nature of efforts to develop devices that use electrical stimulation or magnetic fields to treat brain and nerve disorders.
Mindful of successes treating conditions as diverse as epilepsy, deafness and chronic pain, device makers have been investing heavily in what James Cavuoto, publisher of Neurotech Reports, forecasts will be a $3.6 billion neurotechnology market this year.
Northstar has focused on the brain’s outer layer, or cortex, as opposed to deep-brain stimulation or stimulation of the spinal cord or major nerves before they enter the brain. The company has studied treatment of major depression and the chronic ringing in the ears called tinnitus by stimulating various regions of the cortex, but it had bet heavily on reaching the market first with stroke therapy after initial research produced promising data.
“To put it mildly, we are extremely surprised and disappointed by these results,” said John S. Bowers Jr., Northstar’s president and chief executive, in a conference call with analysts.
In the trial, stroke victims who had lost control of a hand or arm received either vigorous physical therapy or the physical therapy as well as gentle stimulation from the Northstar Renova, a device the size of a pocket watch that was implanted in the upper chest and connected to the brain by a wire.
Northstar said that analysis of results after four weeks showed that the group getting only physical therapy had done much better than previous research had indicated — so much so that there was no advantage to the stimulator. Preliminary data from patients followed for 24 weeks showed no change in the pattern, Northstar said.
Looking for a silver lining for patients if not investors, Mr. Bowers told analysts that the trial might have demonstrated the value of providing aggressive physical therapy for all stroke victims.
