Uncovering the mysteries of the brain has been an objective of humanity since we figured out that the organ was the command center for every operation in the body. Despite accounting for only about 2% of body weight, the brain uses around 20% of the body’s total energy, highlighting its immense complexity.  Historically, our understanding of the functional zones of the brain was limited to the study of traumatic injuries; we only knew what a specific region did once it was damaged. Today, the convergence of advanced neuroimaging like functional MRIs and magnetoencephalography (MEG), with new neural interfaces is turning the brain from a black box into a legible, and increasingly modulable organ.

As we enter 2026, there are two distinct technologies used by clinicians to interact with the brain: Brain-Computer Interfaces (BCIs) and Neuromodulation.

BCIs: Translating Thought into Action

BCIs focus on decoding neural signals to provide a method of communication for individuals with limited physical mobility. These systems act as a bridge between the central nervous system and external digital devices. By establishing a link between the brain and a computer, these BCIs translate the electrical firing of neurons into commands for hardware or software. For patients with ALS or spinal cord injuries, and the limited mobility that comes with these diseases, a BCI would provide a means of communication, movement and environmental control.

While the end results are very eyecatching, BCIs are currently only transitioning from early feasibility studies to pivotal clinical trials. This means that there’s still many years before they could become mainstream. Perhaps the most famous manufacturer of BDIs is Elon Musk’s Neuralink, which has focused on a high-channel-count implant that utilizes a robotic system for electrode insertion. Other players like Synchron have moved forward with its “Stentrode” following the completion of its COMMAND early feasibility study. Synchron’s approach is notably less invasive, utilizing an endovascular delivery through the jugular vein rather than open-brain surgery. There are other participants, such as Precision Neuroscience with its layer 7 interface. 

All in all they can all be said to be working on the same problem, to come up with the best solution to measure brain activity in a way that is both reliable and able to withstand the body’s biological response to having something implanted into it. Given the complexities at hand, it is unlikely that we end up in a winner takes all scenario, the most likely outcome is one where different companies are best suited to solve different problems. 

Neuromodulation: Stimulating nerves to restore function

While BCIs are primarily about getting information out from the brain, neuromodulation is centered on utilizing electrical stimulation to alter nerve activity and restore physiological function. One of the leaders in neuromodulation technology is LivaNova (LIVN), the latest addition to the Robo Global Healthcare Technology and Innovation (HTEC) portfolio.

LivaNova’s Vagus Nerve Stimulation (VNS) therapy is already established for drug-resistant epilepsy. The current generation of the system can detect rapid heart rate increases that are often associated with seizure onset. When detected, the device delivers an automatic stimulation dose intended to stop the episode before it fully begins.

LivaNova is currently leveraging this same VNS platform to expand into two high-growth areas: Obstructive Sleep Apnea (OSA) and Treatment-Resistant Depression (TRD). For sleep apnea, results from its 2025 medical trial showed a 65% success rate at 12 months for its aura6000 system. That said, the company is not only competing with other OSA players. Weight loss drugs have thrown a level of uncertainty on the market sizing of a condition that has a high correlation with obesity.

LivaNova is focused on a specific subset of patients who have failed four or more traditional treatments. While the primary endpoint of their latest clinical trial was mixed, the data showed significant improvements in secondary measures like quality of life and daily functioning, which has prompted a new push for broader clinical adoption.  

Catalysts and Challenges

The commercial viability of these technologies, as it does with all other medical devices, relies in part on regulatory and reimbursement frameworks. Last year, the Centers for Medicare & Medicaid Services (CMS) increased payment rates for VNS and other neurostimulation procedures, improving the financial incentives for hospital systems to offer these therapies. Something which is likely to increase adoption during 2026.  

A major catalyst to watch in 2026 is the CMS coverage reconsideration for VNS in depression. Currently, coverage is limited, but a positive national coverage determination (NCD) would significantly expand the addressable market. Additionally, the 2026 Outpatient Prospective Payment System (OPPS) final rule continues to move complex neurostimulation procedures into the Ambulatory Surgical Center (ASC) setting, which can reduce the total cost of care and improve patient access.

Despite these market tailwinds, technical challenges persist. Neuromodulators, while generally able to produce better outcomes, do compete with alternatives that don’t require surgical intervention. Which is why improved access to the technology is so important to its adoption. 

The primary obstacle for chronic implants remains biocompatibility. The brain’s natural foreign body response typically leads to the formation of scarring around implanted electrodes. This scar tissue acts as an electrical insulator, which can result in a reduction in signal quality over time. Additionally, BCIs still require regular calibration. Because neural firing patterns can shift based on factors like sleep or fatigue, users often need to spend time daily training the software to maintain accuracy. 

Conclusion 

For the investor and the clinician, the narrative around neurotechnology going forward is divided by the maturity of the underlying systems. For Neuromodulation, the focus has shifted from clinical proof to commercial scale. The removal of reimbursement barriers for the likes of  VNS and its expansion into sleep and depression suggest that the infrastructure for these established therapies is becoming a standard component of healthcare delivery.

In contrast, BCIs remain very much in a proof of concept phase as they transition to larger human trials. While successful early results from Neuralink and Synchron are promising, these systems must still overcome significant long-term hurdles in biocompatibility and daily calibration before they can achieve the same market penetration as neuromodulators. 

As we improve our ability to map and modulate the brain, the objective remains a more data-driven approach to human health, one that treats the brain’s complexities as difficult, but ultimately solvable, engineering challenges. HTEC’s investment thesis consists of identifying needs in societies and the technologies and upcoming breakthroughs that would help societies address these problems.

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