New Delhi: Elon Muskcommissioning of brain implants Neuralinkwhich was valued at close to $2bn in a private fundraising round two years ago, is now worth around $5bn according to privately executed stock trades described to Reuters by five sources with knowledge of the matter.
Some buying by bullish investors boosted valuation in recent months, before NeuralinkThe May 25 announcement that US regulators had approved a human test on its brain chip, the sources said.
Experts have said that Neuralink could take several years to obtain authorization for commercial use. Kip Ludwig, former director of the neural engineering program at the US National Institutes of Health (NIH), said he “optimistically” expected Neuralink to take at least 10 more years to commercialize its brain implant. The company also faces other challenges including federal investigations into its handling of animal research.
However, after the approval of the judgement, Neuralink Actions they were privately traded to investors in recent days at a valuation of $7 billion, equivalent to $55 per share, according to an email seen by Reuters. Reuters could not establish whether the seller found buyers for that price. The email cited the US Food and Drug Administration’s (FDA) approval of the clinical trial as reason for making the deal “sweeter.”
Neuralink and Musk executives did not respond to requests for comment.
Musk has expressed high ambitions for Neuralink, saying his chip would allow able-bodied and disabled people to come to neighborhood facilities for rapid surgical insertions of devices to treat obesity, autism, depression and schizophrenia. He even sees that they are used for web browsing and telepathy.
A Neuralink executive recently gave more modest short-term goals, such as helping paralyzed patients communicate via computerized text without writing.
Stock transactions with a valuation of around $5 billion have been done by shareholders, such as employees and early backers of the company, rather than Neuralink selling new shares to investors. So-called secondary transactions are an imperfect indicator of a company’s value; their volume is thin and they lack the broader market consensus of a fundraising round or initial public offering (IPO).
Neuralink’s valuation leap in secondary operations is in stark contrast to other startups. About 85 percent of pre-IPO companies are currently valued in secondary transactions at an average discount of 47 percent in their latest funding round, according to data provider Caplight.
In Neuralink’s last known fundraiser in 2021, it raised $205 million at a valuation of about $2 billion, according to data provider Pitchbook.
Many of the recent stock sales have been to relatively small investors, who are typically more focused on getting a piece of a Musk-owned company than looking at its valuation. The maximum amount requested by the Neuralink Actions marketed for sale at a valuation of $7 billion was just $500,000, according to the email seen by Reuters.
Sim Desai, chief executive of Hiive, an online platform where shares are traded, said demand for Neuralink shares has been “tremendous.” He set the valuation buyers are willing to pay at around $4.5 billion.
Some biomedical experts are skeptical. Arun Sridhar, a scientist and entrepreneur who specializes in neuromodulation, called Neuralink’s assessment “crazy” based on how early the brain implant is in its clinical development.
“A study to assess safety and tolerability is neither fit nor valid to justify a $5 billion valuation,” said Sridhar, who helped launch Galvani Bioelectronics, an implant developer backed by GSK Plc and Verily Life Sciences of Alphabet Inc. Galvani is not a competitor to Neuralink because its implants under development will be installed in an artery in the spleen to help treat rheumatoid arthritis, rather than the brain.
Research
The FDA initially rejected Neuralink’s request for a human trial last year, citing safety reasons, Reuters reported. Even after getting approval, the company faces several challenges.
Neuralink has come under scrutiny from US lawmakers after Reuters reported in May that its animal research board may have violated conflict-of-interest rules.
Neuralink employees who were on that board, which oversees the welfare of the animals being tested, also benefited from the rapid development of the implant. Neuralink shares held by some of the employees have risen about 150 percent in value in just two years, according to side transactions.
The law enforcement arm of the US Department of Agriculture has been investigating Neuralink for possible animal welfare violations. Neuralink staff told Reuters last year that the company was rushing and botching surgeries on monkeys, pigs and sheep, resulting in far more animal deaths than necessary, as Musk lobbied staff for approval from the company. FDA.
The Department of Transportation is separately investigating whether Neuralink illegally transported dangerous pathogens on chips extracted from monkey brains without proper containment measures.
Neither Musk nor Neuralink have responded to multiple requests for comment on the Reuters investigations or reports.
