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S.E.C. RESPONSE LETTER

January 19, 2005

Thomas J. Poletti

310.552.5045

Fax: 310.552.5001

tpoletti@klng.com

Via Edgar and Fed Ex

Securities and Exchange Commission

Division of Corporation Finance

450 5th Street, N.W.

Washington D.C. 20549

Attn: Peggy A. Fisher

    Re:

    Cyberkinetics Neurotechnology Systems, Inc.

    Registration Statement on Form SB-2

    File Number: 333-120973

    Filed December 3, 2004

Dear Ms. Fisher:

On behalf of Cyberkinetics Neurotechnology Systems, Inc. (the “Company”) we hereby transmit for
filing Amendment No. 1 to Form SB-2 filed January 19, 2005 (“Amendment No. 1”). We are also
forwarding to you via overnight delivery courtesy copies of this letter and Amendment No. 1 (marked to show
changes and additions from the Form SB-2 filed December 3, 2004 (the “SB-2”). We have been advised
that changes in Amendment No. 1 from the SB-2, as submitted herewith in electronic format, have
been tagged.

The staff of the Securities and Exchange Commission (the “Staff”) issued a comment letter, dated
December 29, 2004, in respect of the above-referenced filing. The following consists of the
Company’s responses to the Staff’s comment letter in identical numerical sequence. Please note
that page number references in your comments may not refer to the same page number(s) in Amendment
No. 1.

General

     1. Further to our conversation, the Company has revised the section entitled “Plan of
Distribution” to indicate that affiliates selling securities in the offering may be deemed
statutory “underwriters.” However, as we discussed, we respectfully submit that the registration
statement need not be revised to state a fixed price for shares offered by affiliates during the
duration of the offering. The Staff has directed us to Item D. 29 of the Manual of Publicly
Available Telephone Interpretations, which defines criteria whereby a secondary offering by certain
selling shareholders should in fact be considered a primary offering by the issuer. For the
reasons set forth below, we respectfully submit that the offering at hand does not constitute a
primary offering by the Company.

Securities and Exchange Commission

Division of Corporation Finance

January 19, 2005

Page  2

First, all of the shares offered for resale by the selling stockholders were purchased from the
Company in the October 2004 private placement referenced in the SB-2 (the “Private Placement”).
The terms of the Private Placement, including the grant of registration rights, were required to be
approved by the unanimous vote of the Company’s disinterested board members- i.e., board members
who did not participate in the Private Placement, nor had shares registered in connection with the
resale registration statement in question.

A main factor in determining whether the offering is in fact a primary offering of the issuer is
whether the Company sold to shareholders who in fact dictated the terms pursuant to which the
Private Placement, including the registration rights granted in the transaction, were effected. As
specified above, we note that the Private Placement could not have been effected without approval
from disinterested board members. In fact, the terms upon which the affiliates were granted
registration rights were identical to those granted to other investors in the transaction.
Finally, as a condition to the Private Placement, all affiliates of the Company, including the
selling stockholders at issue, were required to sign lock-up agreements covering all other shares
held by them which were not sold in the Private Placement. In no way could this be considered an offering by the issuer
when such substantial limitations were placed on the shareholders at issue.

Second, the substantial
portion of the shares proposed to be offered for resale, approximately 75%, were
purchased by new investors brought in by Rodman & Renshaw, LLC, the Company’s placement agent in
the Private Placement. This was clearly not an instance where affiliates purchased a large portion
of the offering with the express purpose of recognizing substantial benefits not afforded to other
unaffiliated investors. Again, as set forth above, these affiliated investors could in no way
independently dictate the terms of the Private Placement.

Third, no selling stockholder that may be deemed an affiliated entity of the issuer is
proposing to sell a substantial or material portion of the Company’s outstanding shares or a
substantial or material portion of their respective holdings in the Company.

    •
    Oxford Bioscience Partners and affiliated entities (collectively,
“Oxford”). Oxford is proposing to offer up to 423,606 shares for
resale, which represents only 2.7 percent of the Company’s
outstanding common stock. Oxford holds an aggregate of 7,312,496
shares (including the 105,105 warrants issued in the Private
Placement); however, all but the 423,606 shares offered for resale
are restricted and therefore subject to the applicable holding
period and volume limitations set forth under Rule 144 of the
Securities Act of 1933, as such shares were obtained at the
closing of the reverse merger transaction in October 2004.
Additionally, the proposed resale shares represent only 5.8
percent of Oxford’s overall holdings in the Company.

    •
    Global Life Science Ventures and affiliated entities
(collectively, “Global”). Global is proposing to offer up to
87,403 shares for resale, which represents less than 1.0 percent
of the Company’s outstanding stock. Global holds an aggregate of
2,138,320 shares (including 34,320 warrants issued in the Private
Placement); however, all but the 87,403 shares offered for resale
are restricted and therefore subject to the applicable holding
period and volume limitations set forth under Rule 144 of the
Securities Act of 1933, as such

Securities and Exchange Commission

Division of Corporation Finance

January 19, 2005

Page  3

    shares were obtained at the closing of the reverse merger transaction in October 2004.
Additionally, the proposed resale shares represent only 4.0 percent of Global’s overall
holdings in the Company.

    •
    GDH Partners, LP (“GDH”). GDH is proposing to offer up to 70,600 shares for resale, which
represents less than 1.0% percent of the Company’s outstanding common stock. GDH holds an
aggregate of 1,292,822 shares (including the 17,517 warrants issued in the Private Placement);
however, all but the 70,600 shares offered for resale are restricted and therefore subject to
the applicable holding period and volume limitations set forth under Rule 144 of the
Securities Act of 1933, as such shares were obtained at the closing of the reverse merger
transaction in October 2004. Additionally, the proposed resale shares represent only 5.5
percent of GDH’s overall holdings in the Company.

Additionally, each of the entities referenced above are long-term investors in the Company, as
original investments in Cyberkinetics, Inc. date back to
2002, 2003 and 2002, respectively.
These investors then exchanged those Cyberkinetics, Inc. shares for
newly-issued Company shares in connection with the reverse merger
transaction. These Company shares are subject to resale restrictions
until at least October 2005. Therefore, the above-referenced entities are not seeking immediate resale for a large portion of
their respective holdings in the Company.

Further, we respectfully submit that none of Oxford, Global or GDH is “in the business of
underwriting securities.” These are entities that are engaged in the business of private long-term
investments in companies as venture capitalists, not as underwriters.

Based on the above factors, we respectfully request that the registration statement should not be
revised to state a fixed price for shares offered by affiliates during the duration of the
offering.

Summary- Page 1

     2. Further to the request of the Staff, the reference to “development stage” has been included
in this section.

     3. Further to the request of the Staff, clarification with respect to the Investigational
Device Exemptions (“IDE”) has been added. Additionally, the language with respect to regulatory
approval has been revised.

     4. Further to the request of the Staff, disclosure has been added with respect to the type of
application that the Company expects to submit to the Food and Drug Administration (“FDA”).
Additionally, we have expanded the discussion to include a timeline for FDA review of any
subsequent application.

Risk Factors- Page 6

     5. Further to the request of the Staff, the last sentence of the second introductory paragraph
has been deleted. Additionally, a cross-reference to “Special Note Regarding Forward-Looking
Statements” has been added, as this section sets forth a discussion of material risks.

Securities and Exchange Commission

Division of Corporation Finance

January 19, 2005

Page  4

     6. Further to the request of the Staff, certain of the risk factors have been revised. Those
headings that previously set forth only a condition, fact or uncertainty have been revised to state
a risk that results from such condition, fact or uncertainty.

Risks Related to Our Business- Page 6

     7. Further to the request of the Staff, the risk factor has been eliminated as it was
substantially similar to the risk factor beginning “[f]ailure to develop products would have an
adverse effect....” See also response number 8.

     8. Further to the request of the Staff, the second risk factor on page 6 has been eliminated.
Further to comment number 7, we have quantified research and development expenses for the last two
years in this risk factor.

     9. Further to the request of the Staff, this risk factor has been revised to identify existing
alternatives to the Company’s proposed products.

Risks Related to Capital Structure- Page 13

     10. Further to the request of the Staff, this risk factor has been combined with the risk
factor that was previously entitled as follows, “[b]roker-dealer requirements may affect trading
and liquidity.”

Management’s Discussion and Analysis of Financial Condition- Page 19

     11. Further to the request of the Staff, the referenced language has been deleted.

Results of Operations- Page 23-25

     12. Further to the request of the Staff, we have quantified the significant factor that
contributed to increased revenues during the comparable periods, namely sales of Bionic research
product units sold. Additionally, we have provided additional details regarding research and
development expenses in fiscal 2003 compared to fiscal 2002.

Liquidity and Capital Resources- Page 26

     13. Further to the request of the Staff, we have added additional details regarding cash flows
from operations.

Business- Page 27

     14. Further to the request of the Staff, we have added a discussion regarding expenditures on research and development activities during the previous two fiscal years. Further,
we have inserted additional information with respect to customers and availability of

Securities and Exchange Commission

Division of Corporation Finance

January 19, 2005

Page  5

materials. With these additions, we respectfully submit that we have complied with all
applicable provisions of Item 101(b) of Regulation S-B.

Products- Page 27

     15. Further to the request of the Staff, information regarding Bionic products has been added,
including disclosure regarding revenues generated from such products during the last two fiscal
years.

     16. Further to the request of the Staff, the discussion has been expanded regarding the
NeuroPort device.

     17. Further to the request of the Staff, we have revised the language in this section with
respect to craniotomies.

     18. Further to the request of the Staff, clarification has been made with respect to the
NeuroPort device design.

     19. Further to the request of the Staff, a summary of the BrainGate system contained in a
December 7, 2004 press release has been included.

Market Opportunity- Page 29

     20. Further to the request of the Staff, the requested language regarding FDA approval has
been included.

     21. Further to the request of the Staff, the disclosure has been expanded to indicate the
material differences among the types of FDA approvals.

Competition- Page 29

     22. Further to the request of the Staff, we have identified Neural Signals, Inc. as a
potential competitor.

Intellectual Property- Page 29

     23. Further to the request of the Staff, we have revised to state the duration of the patents
and licenses.

     24. Further to the request of the Staff, the material terms of the license agreements have
been included in the intellectual property discussion.

     Government Regulation- Page 29

Securities and Exchange Commission

Division of Corporation Finance

January 19, 2005

Page  6

     25. Further to the request of the Staff, a discussion has been included regarding the
differences among the different types of FDA approval and the type of approval that the Company
will seek with respect to the BrainGate system. Additionally, a discussion has been included
regarding the estimated timing for approval from the FDA for any subsequent application.

     26. Further to the request of the Staff, disclosure has been added regarding the status of
outstanding 510(k) applications.

     27. Further to the request of the Staff, disclosure has been added regarding post-approval
surveillance by the FDA.

Clinical Trials- Page 30

     28. Further to the request of the Staff, disclosure has been added regarding IDE approval and
an estimate of the timing of such approval.

Audit Committee- Page 34

     29. Further to the request of the Staff, disclosure under “Audit Committee” has been revised.
We respectfully submit that the directors on the committee are not required to meet the
“independence” standards set forth under Section 10A-3(m)(3)(B), as the Company is not listed on a
“national securities exchange.” The Company’s common stock trades on the Over-the-Counter Bulletin
Board, which is not required to enact independence standards with respect to audit committees.

     30. Further to the request of the Staff, we have named the “financial expert(s)” serving on
the Audit Committee.

Beneficial Ownership- Page 38

     31. Further
to the request of the Staff, we have identified the natural persons with investment
and/or voting control over the entities identified in the beneficial ownership table.

Certain Relationships and Related Transactions- Page 43

November 2004 Private Placement- Page 43

     32. Further to the request of the Staff, the numbers disclosed in the bullet points have been
corrected.

     33. Further to the request of the Staff, a discussion has been inserted regarding pre- reverse
merger holdings in Cyberkinetics, Inc.

Securities and Exchange Commission

Division of Corporation Finance

January 19, 2005

Page  7

     34. We respectfully submit that Bionic Technologies, Inc. was not affiliated with any current
officers, directors or significant stockholders prior to the acquisition. Therefore, a discussion
is not required.

Selling Stockholders- Page 46

     35. Further to the request of the Staff, we have revised the selling stockholder section to
identify the natural persons with voting and/or investment control over the shares held by each
entity.

     36. Further to the request of the Staff, we have identified whether any of the selling
stockholders are broker-dealers or affiliates of broker-dealers. We respectfully submit that only
one of the selling stockholders (Rodman & Renshaw, LLC) must be
identified as an “underwriter” with
respect to the shares they are offering for resale.

Financial Statements

     37. We take your comment under advisement and will file updated financial statements as
required under Item 310(g) of Regulation S-B.

     38. Further to the request of the Staff, an update