Big hopes from small technologies
Promising smaller, lighter, quicker and better-performing materials, components and systems, nanotechnology could open new opportunities for collaborations in a number of sectors ranging from pharmaceuticals to medical devices, chemicals, energy and technology. That's what the proponents of the technology argue, anyway.
In fact nanotechnology is pretty much pointless unless it is applied to an existing technology. So collaboration between companies with nanotechnology-related patents and companies in other sectors will drive the success or failure of the nascent industry over the next few years. Nanontechnology executives have the job of convincing a wide range of industries that their technology means getter better, quicker, cheaper products to market.
The adoption of nanotechnology by industry appears to have begun, albeit in patches. Akzo Nobel, which specialises in healthcare products, coatings and chemicals and BASF, a chemical company formed an alliance based on BASF’s nanobinder technology. In April 2007 Akzo Nobel introduced a new facade coating based on the nanobinder technology. The coating is reported to absorb less dirt than conventional coatings and prevents fungal growth.
Medical devices are one sector where nanotechnology is making an impact. Zyvex Corporation, a molecular nanotechnology company specializing in micro-electro-mechanical systems and Diabetech LP, a medical device company, formed an alliance in February 2006 to develop an active implantable device developed by Zyvex. The Glucose Nanobiosensor Implant involves a wireless sensor implant that picks up the blood glucose levels in the body and transmits this information to a hand-held device that displays real-time glucose levels. The data can also be automatically relayed to Diabetech's clinical management system. The device will enable diabetic patients to avoid the procedure of pricking their fingers on a regular basis through the day to collect readings.
Siemens Medical Solutions is also getting into the nanotechnology space. For the past two years Siemens and Xintek Inc, a nanotechnology manufacturing company, have been jointly investigating the possibilities of bringing nanotechnology and X-ray technology together for diagnostic X-ray imaging. The alliance moved forward one step in September 2007 when the two companies entered an agreement to establish a joint venture company, XinRay Systems, based in Research Triangle Park, North Carolina. XinRay Systems will develop a multi-pixel X-ray source technology for a range of diagnostic imaging applications.
Nanotechnology in the pharmaceutical and biotechnology space has shown the most promise - so far - in drug delivery technologies. pSivida is one company in this space. The Australian company is developing drug delivery products in the healthcare sector, initially in ophthalmology and oncology. pSivida has licensed its eye treatments for chronic eye disease to Bausch & Lomb. pSivida's next generation product is licensed to Pfizer for ophthalmic applications and Alimera Sciences for the treatment of Diabetic Macular Edema. The deal with Pfizer was valued at US$165 million. Pfizer has a 3% shareholding in pSivida.
pSivida's BioSilicon nanontechnology was developed by QinetiQ, a company set up by the United Kingdom Government Defence Evaluation & Research Agency in 2001. BioSilicon was trialed at the Singapore General Hospital and in June 2004, QinetiQ exchanged its stake in the technology for shares in pSivida Limited in a deal that valued the company at the time at £40 million (US$80 million). QinetiQ holds 3.50% of shares of the company.
The equity markets have been less impressed with pSivida's prospects. The company is quoted on NASDAQ. Despite the Pfizer deal, the company's shares have fallen from a price of US$10.50 in January 2005 to less than US$1 in September 2007. The company is capitalised at US$40 million. pSivida's finances are not pretty. The company had negative operating cashflow A$21 million (US$ 18 million) in the nine months to March 2007 and cash in hand of just A$7.40 million (US$6.40 million).
Nanotechnology seems unlikely to live up to its early hype. But the technology, much like the internet, will gradually become integrated into the research and development model of whole slews of research-based industries including pharmaceuticals, medical devices, chemicals and electronics. Whether the early startups in the industry can survive that long is another matter.
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