For years, as Medtronic (MDT) developed the pacemaker and defibrillator and then adapted these implantable devices for use in the brain and spinal cord, Dr. Stephen N. Oesterle could only watch from the outside. Today, he could hardly be more on the inside.
A former cardiologist and medical-school professor, Oesterle is Medtronic's chief medical officer. Much of what he sees is wondrous. The devices -- lightweight titanium canisters packed with powerful microprocessors and long-lived batteries -- send out carefully measured pulses of electricity through wires as thin as a strand of hair. They're already on the market to stimulate the brain to halt tremors from Parkinson's disease; the spine to alleviate pain; and the sacral nerve in the lower back to restore bladder control.
That may be only the start, however. Medtronic products are in clinical tests to pulse the thalamus to treat epilepsy; another region of the deep brain to treat migraines, depression, and obsessive-compulsive disorder; the hypoglossal nerve in the neck to treat sleep apnea; the sacral nerve to treat bowel disorders; and the stomach to treat obesity. Oesterle believes medicine may be on the verge of rethinking the way it treats many chronic ailments.
Oesterle, 54, came to Medtronic in 2002 from Harvard University's medical school and Massachusetts General Hospital in Boston. From his office in Medtronic's headquarters outside Minneapolis, he recently gave BusinessWeek Senior Correspondent Michael Arndt his insider's perspective on these breakthrough devices. Edited excerpts of their conversation follow:
Q: A lot of people may be frightened by the idea of brain stimulation. The image that comes to mind is Frankenstein's monster getting jolted. How is this different?
A: We're talking about microvolts of electricity as opposed to megawatts. This is not someone dropping a switch and seeing an arc of electricity. These are micropulses so small that patients have no sense they are happening. There are no sensory fibers down deep in the brain, anyway.
Q: The pacemaker has been around for more than 40 years. Why has it taken so long to find other applications for this device?
A: We call these devices IPGs, which is an acronym for implanted pulse generators. The short answer is the barriers to entry to the IPG market are huge. These things are extremely complicated and difficult to make, so you don't see people say, "Gee, I could go do that," raise $10 million, and get working. The info-tech hurdles are as big as they get. This is really an oligarchy of three or four companies, and that's why progress has been slower.
Q: What are the advantages of using these devices?
A: Most people, when they think of therapy, they think of it in a pharmaceutical way -- taking a pill. The issue is that pharmaceutical treatments are not targeted treatments for the most part. You take an antibiotic for a local infection, but that antibiotic goes everywhere in the body. You take a drug like L-dopa for Parkinson's disease, and it has a lot of side effects because it's distributed everywhere. If you get it right, devices offer a targeted therapy where there aren't a lot of side effects.
Sophisticated clinical studies also suggest there are cost/benefit advantages here. It always looks like it's a good deal to take that pill because it's just a buck a day, whereas a device may cost $10,000 or more. But if you amortize the benefit of those devices over the life of the devices, these things start to look quite beneficial from a cost/benefit analysis.
Q: How does electrical stimulation actually work?
A: The body is on fire with electricity. Everything that happens in the body is controlled by an electrical/chemical reaction, whether it's the release of a protein, the contraction of a cell, or the delivery of a neurotransmitter. It's logical then that by using controlled electricity in controlled areas, you could control local phenomena, whether it's the closure of a sphincter in the bladder, the contraction of a muscle in the heart, or the delivery of neurotransmitters in the brain. If you start with that concept -- that the body is on fire with electricity -- all you need is imagination.
Q: So what's next?
A: I think the next big application for pacing is going to be in obesity. The other big application could be for things like sleep apnea. But I think the greatest thing on the horizon -- the thing that brought me to Medtronic out of a career in cardiology -- is in the brain.
Everything up there is electrical. There are no moving parts. You start looking at people with strokes, and you begin to wonder whether stimulating parts of the brain might be able to restore function to people who are paralyzed.
If we really understand how we move and think, then you begin to understand how we can use stimulation for addictive disorders. We know we can stimulate for obsessive-compulsive disorders. Drug addiction, alcohol addiction -- all these things could potentially be treated by stimulation.
But when you start stimulating the brain for thought disorders, this gets into ethical issues I'm not prepared to deal with, let alone talk about. Medtronic is not spending a lot of time right now on things that would sidle up against ethical issues. We're too big and public of a company to do that.
Q: Do you think this is a market or a medical application that one day will be as big and important as cardiac devices?
A: This is a huge market. It is underdeveloped and underpenetrated, and it's where growth will be in the medical-device industry over the next decade.
If I had to pick one business I said would grow unambiguously in the next decade, I would pick IPGs over biotechnology.