Our Medical Technology expert analyzes the medical potential and
market opportunity in technology that allows direct communication
between the human brain and an external device.
----- Transcript -----
Welcome to Thoughts on the Market. I’m Kallum Titchmarsh,
from Morgan Stanley’s U.S. Medical Technology Team. On today’s
episode – a dive into a topic that sounds like it’s straight out
of science fiction. Brain Computer Interfaces, or BCIs.
It’s Tuesday, October 22, at 10 AM in New York.
The latest version of Tony Stark – better known as his alter ego
Iron Man – is a good example of a brain computer interface. When
the billionaire businessman-inventor is critically wounded, he
builds an armor suit that gives him superhuman abilities. Flying
through air. Clearing out obstacles with repulsor blasts.
Shooting enemies with guided missiles. All controlled by his
brain.
This, of course, is the stuff of science fiction. Real world
examples of brain computer interfaces – or BCIs – aren’t
fantastical. But they are fascinating. Translating thoughts into
actions like generating text on a screen or moving a robotic
limb.
BCIs have been in development for more than a century, but recent
advances have brought them much closer to becoming a reality. We
expect to see BCIs in commercial medical use in about five years,
at which point they can help treat a wide range of health
disorders, from motor neuron disease – such as ALS – to
depression.
The market opportunity for BCIs looks enormous – $400 billion of
total addressable market – or TAM – in the US alone. This figure
includes two types of BCIs: enabling BCIs, which facilitate
behaviors like moving a cursor on a screen, and preventive BCIs,
which can prevent adverse events like depressive states or
epileptic seizures.
We divide the BCI healthcare opportunity into two segments: early
TAM and intermediate TAM. The early TAM includes individuals with
critical upper limb impairment and select variants of
neurological conditions like epilepsy and depression. These
patients will likely be the first to receive a BCI. The
intermediate TAM includes patients with moderate upper limb
impairment and severe lower limb impairment. As BCI technology
develops, these patients will eventually become eligible for
treatment.
There are at least 2.8 million patients in the US forming the
early TAM and an additional 6.8 million within the intermediate
TAM. Together, these groups represent the $400 billion of
potential revenue I already mentioned based on a single implant
procedure.
The opportunity may be significantly larger when factoring for
potential replacement cycles and recurring revenues from software
upgrades. But while the estimated TAM is indeed vast, we think
penetration will remain limited through the first 20 years of
launch. By 2035, we expect just under $1.5 billion of revenue to
be generated from BCI implant procedures, hitting north of a $500
million annual run rate in 2036, and reaching the $1 billion
annual run rate by 2041.
It’s exciting to think BCIs will begin their healthcare
application in the coming years, but we anticipate a number of
regulatory hurdles on the way to widespread adoption in
healthcare and beyond. Will BCIs push into fields like
neurogaming, warfare, and even biological optimization of
humans?
The potential is certainly there, and with it the burden of the
safe and responsible use of this cutting-edge technology.
Thanks for listening. If you enjoy the show, please leave us a
review wherever you listen and share Thoughts on the Market with
a friend or colleague today.
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