Northstar Neuroscience, Inc. (NSTR)

Northstar Neuroscience is a medical device company committed to providing neurostimulation therapies for people who suffer from stroke and other neurological disorders. The company's innovative technology is designed to deliver targeted electrical stimulation to the outermost layer of the brain, called the cortex, in a process referred to as cortical stimulation. It is also studying therapeutic applications for other neurological conditions including stroke-related aphasia and tinnitus.

Northstar has not generated any revenue in the past two years, and the same is expected to continue until late 2008, when it plans to launch its first product. The profitability of the company has also been negative and is expected to remain in red till 2009, one year later from the launch of its first product when it is expected to post some operating profits.

The company is expected to have a difficult path ahead because of the intense competition it faces in the industry. It is expected to face large challenges in developing operational skills and marketing expertise once it launches its first product. Moreover to launch its product it will have to build a strong sales force from scratch which is mountainous task in itself.

Moreover the company faces a huge risk of the failure of its product if the expected clinical results are not favorable enough to support its planned submission to the Food and Drug Administration. Due to the small size of the company and the heavy weight competitors in the market Medtronic, St. Jude, and Boston Scientific, which have many more resources at their disposal, it is not expected that Northstar will show promising results in the coming two years.