Brain-computer interfaces are hot! Science fiction has finally come to life

Author / Boiled under the stars

Edit/Spinach's Starry Sky

Typography / Okra under the stars

The brain is the most complex and sophisticated organ in our body.

What is the structure of the brain and how it functions is the most mysterious and fascinating field of human science, and it is also one of the most challenging frontier topics of the 21st century. Many countries around the world are laying out scientific research and industries related to brain science, intending to conquer this scientific and technological highland.

In May this year, Neuralink, a brain-computer interface company founded by Silicon Valley's "Iron Man" Elon Musk, announced that its program had been approved by the U.S. Food and Drug Administration (FDA). In September, the company announced that it had been officially approved to implant devices in the brains of ALS patients.

These high-profile announcements have even affected the A-share market.

Although there has not yet been a listed company with brain-computer interface-related business as its main business, it does not prevent the multiple changes in A-share related theme stocks. For example, Nanjing Panda (600775), which has officially announced its participation in the research and development of the brain-computer interface project, soared in November, recording 5 consecutive price limits, hitting a new high in the past four years. Rock Mountain Technology (002195), Innovative Medical (002173) and Sanbo Brain (301293) and other stocks that are somewhat "rubbing" are also outstanding.

Nanjing Panda K-line chart Source: Straight Flush iFinD, compiled by the author

What is a brain-computer interface? Is the related business of these listed companies really reliable?

1. The concept has been born for 60 years

A brain-computer interface (BCI) refers to the interaction and control channels established between the brain and external devices such as computers. Depending on how the external device is accessed, there is a distinction between intrusive and non-intrusive. When it comes to invasive brain-computer interfaces, the author remembers the science fiction novels I read when I was a child, and installed a bridge similar to a broadband plug on the back of the head, and when the protagonist needs to access it, he can smoothly access the "metaverse" by copying the network cable to the back of his head. But in reality, such imagination is clearly limited by the technology of the last century, and the current invasive devices have advanced to the use of neurosurgery to implant microscopic hardware such as chip electrodes into specific parts of the cerebral cortex to monitor and collect neuronal activity in the brain. Instead of invasive brain-computer interfaces, these hardware are usually placed outside the skull so that surgical implantation is not necessary.

In the implementation path, the brain-computer interface should start from signal acquisition, then carry out a series of decoding and processing of the collected signals, generate and execute instructions and transmit them to external devices to realize the user's intentions, and finally send feedback signals to the brain to form a closed loop.

Schematic diagram of BCI technical system Source: China Academy of Information and Communications Technology

The concept of brain-computer interface was actually proposed very early, and it has gone through 60 years of exploration since it was first formally proposed by humans in 1973. After entering the 21st century, benefiting from the rapid progress of basic disciplines such as computer science, the technical routes and methods of various brain-computer interfaces are gradually maturing, and the results have been slowly realized.

This is inseparable from the enormous resources poured into it.

Taking China as an example, we launched the China Brain Project in 2016, and during the "14th Five-Year Plan" period, we further proposed the "One Body, Two Wings" plan for brain science research, and included brain-like computing and brain-computer integration into the scope of key support. In 2021, the major project of 10 billion yuan "brain science and brain-like research" will be officially implemented again. In addition to the strategic planning at the national level, more than 10 provinces and cities such as Beijing and Shanghai have also successively introduced relevant policies on brain science and brain-computer interface to support research and industrial implementation in related fields.

Under the care of global attention, the brain-computer interface industry has been nurtured and grown.

According to data from overseas research institutions, the global brain-computer interface market size in 2020 was $1.46 billion, although it still looks very limited. But it is expected to reach $3.6 billion in 2027, with a CAGR of 14%. Moreover, with the gradual implementation of application scenarios, the market may experience strong non-linear growth in the future, and the brain-computer interface industry still has certain development potential on the whole.

Global Brain-Computer Interface Market Size and Forecast, 2019-2027 Source: Public Information, Head Leopard, Eggshell Research Institute

2. Medical and health care is the main landing scenario

At the 2014 World Cup in Brazil, 29-year-old Juliano Pinto was invited to kick off the match. He used to be an athlete because of a car accident that resulted in a complete spinal cord injury. However, the brain-computer interface device provides him with the possibility to "imagine" the action of kicking the ball by "imagining" the action of the external device to complete it, although it is difficult for his body to move. The device, while still clumsy, is definitely a milestone in human brain science.

Brain-computer interface users kick off the World Cup in Brazil Source: Internet

This also points out the largest and most realistic application scenario in the brain-computer interface industry, that is, the medical and health field. The first is the monitoring function, for many people with brain system diseases or chronic diseases, the brain-computer interface can grasp the user's physical state through real-time monitoring of the EEG activity state, so as to intervene in advance; the second is the alternative function, such as patients who have lost their speech and motor function due to various injuries or diseases, the peripheral equipment of the brain-computer interface can be used as an extension of the user's function; the third is the rehabilitation function, patients with diseases such as stroke and epilepsy can gradually improve and restore the corresponding function with the help of the brain-computer interface.

Application of brain-computer interface in the field of medical and health Source: Prospect

These applications have great potential in a continent with a large population base and an accelerating aging population. Data shows that there are more than 100 million people with brain diseases in mainland China, in addition to a large number of people with chronic diseases and disabilities, a large proportion of whom have undermet their clinical medical needs. And due to the existence of problems such as the blood-brain barrier, it is very difficult to develop drugs for brain diseases. In this context, it is particularly important to improve the quality of life of patients through other means, such as brain-computer interfaces.

Third, domestic enterprises are already on the way

Therefore, compared with the cold winter period of the entire capital market, investment and financing in the field of brain-computer interface are still in full swing, which is quite a bit of a unique meaning on the scenery side. According to the statistics of research institutions, in the first 11 months of 2023, there were as many as 41 financing events in the domestic brain-computer interface industry. Compared with the fields of tumor drugs, the nervous system seems to have become a paradise that few people have set foot in biomedicine.

In addition to many start-up companies, listed companies are naturally also eyeing this field with a strong sense of technology, after all, the stock market needs a story. However, although various manufacturers have begun to lay out, it seems that the progress is still early.

At the investor relations event in July, Sanbo Brain said that it was not directly involved in the development of brain-computer interface products and technologies, but only had applications in clinical treatment. Innovative Medical is one step ahead, and its 40% stake Boling brain computer has advanced the principle prototype to the stage of Class II medical device declaration. As for when the declaration will be completed, the listed company also frankly said that it is "unpredictable".

Fourth, there are many difficulties in commercialization

This is also normal, after all, the extension of brain-computer interfaces from concept to application is still full of difficulties and obstacles.

First of all, this industry is essentially a deep intersection of brain science, materials science, microelectronics, computer software and other multidisciplinary and multi-technology, and it is very difficult to break through the barriers between these majors and truly integrate them.

The core technical barriers of brain-computer interface Source: Comprehensive collation of Entrepreneur Research Center

If the invasive solution is adopted, it will inevitably face the damage to the cerebral cortex caused by the implanted electrodes, immune rejection reactions, and even medical ethics. The next day, after Neuralink claimed to have conducted its first human experiment, the U.S. Board of Pharmacologists accused the company of "abusing and killing" experimental monkeys in animal experiments. Even if it ultimately proves clinically effective, invasive protocols are subject to cost and accessibility considerations if they are applied on a large scale.

In short, the global brain-computer interface industry will naturally expand gradually. In China, which has a large base of people with chronic diseases and disabilities, the growth potential should be higher than the total global market. However, from conceptual design to clinical trials and finally commercialization, there is still a long way to go for both invasive and non-invasive brain-computer interface solutions, and safety, stability, economy, and other problems need a satisfactory answer. Although Chinese manufacturers have begun to lay out the research and development of related projects, the overall situation is still in the early stage, and only a very small number of products such as Siyi Intelligence's rehabilitation robot have obtained registration certificates. It should be too early to talk about the possible impact of brain-computer interfaces on listed companies.

Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.