Brain implant company Paradromics moves closer to FDA approval

A rapidly growing team of nearly 50 scientists and engineers at neurotech startup Paradromics has caught the eye of federal regulators.

Paradromics, founded in 2015, is developing a brain implant that could help patients with severe paralysis regain their ability to communicate by deciphering their neural signals. And on Thursday, the Austin, Texas-based company announced that it had received Breakthrough Device Designation from the Food and Drug Administration for its flagship system, called Connexus Direct Data Interface.

CEO Matt Angle said the designation, in addition to $33 million in funding the company also announced on Thursday, will help Paradromics bring its device to market.

Paradromics is part of the emerging brain-computer interface, or BCI, industry. A BCI is a system that deciphers brain signals and translates them into commands for external technologies. Experts believe the systems could one day help treat conditions like blindness and mental illness.

Perhaps the most well-known name in space is Neuralink, thanks to the notoriety of its co-founder Elon Musk, who is also the CEO of Tesla, SpaceX and Twitter.

Scientists have been studying BCI technology for decades, and several companies have developed promising systems that they hope to bring to market. But receiving FDA approval for a commercial medical device is no small feat – it requires companies to complete multiple rounds of extremely thorough testing and collect safety data.

As of May, no BCI company had managed to get the final stamp of approval from the FDA.

Paradromics’ BCI, the Connexus Direct Data Interface, is an assistive communication device that translates neural signals into text or synthesized speech. An array of tiny electrodes is implanted directly into brain tissue, where it measures and deciphers brain signals that are ultimately transmitted to external devices through a transceiver that sits under the skin in the chest.

“It’s basically taking some of the things that have been successful in previous clinical trials and then technically improving them to make them better,” Angle told CNBC in an interview.

Angle said the company’s BCI is designed to last about 10 years and will initially be used to help patients who have lost their ability to physically communicate. The device will require invasive brain surgery, but Angle said the quality of neural signals it can measure will allow patients to communicate at a faster, more natural pace than they could with a less invasive BCI, such as one developed by Paradromics competitor Synchron.

So far, regulators seem to agree with Paradromics’ approach. The FDA Breakthrough Device designation is granted to medical devices that have the potential to provide improved treatment for debilitating or life-threatening conditions.

The agency has granted 32 such designations in fiscal year 2023 so far, according to its website.

Angle said the designation will help create a “fast lane” for communication between the FDA and Paradromics. This is an advantage that could be key in getting regulators to approve future clinical trials more quickly.

The company is currently conducting animal safety trials, and the data from these trials will help the FDA determine whether to approve a human study. Angle said Paradromics hopes to launch its first clinical trial with human patients in the first half of 2024.

The startup’s new $33 million funding round was led by Prime Movers Lab.

“It’s a great story,” Dakin Sloss, founder and general partner of Prime Movers Lab, told CNBC in an interview. “And it’s real technology that works now, today. It’s not like a pipe dream that you have to wait 10 years.”

Angle said it’s been an exciting time for BCI, especially as several companies strive to distinguish themselves in an industry he believes will create billions of dollars in value. But while it’s easy to get excited about the future capabilities of BCIs, Angle thinks a lot of good can already be done.

“A lot of people are excited about futuristic, speculative applications. But the reality of brain-computer interfaces is, in some ways, more exciting,” he said. “It can transform what would otherwise be really difficult brain health issues.”