ZIGZAG - this hopefully will catch you up on the Biophan story. The Nanoset relationship is discussed in middle of the page:
Little Company, Big Markets
Steven A. Edwards
Biophan (BIPH) is a little company with nanoscale technology and a big mission - to make MRI scans safe for all those who need them. As it happens, the company previously embarked on an even bigger mission to develop a therapy for AIDS, although that idea has been put on hold. The story of Biophan is full of twists and turns, but its long winding road seems headed for pay dirt. Which is only appropriate, because, technically speaking, Biophan started out as Idaho Copper and Gold.
Here is the story: Mike Weiner, entrepreneur, part-time inventor and full-time tech junkie, had formed a company called Technology Innovations (TI). A potential investor, Wilson Greatbatch, himself a multifaceted inventor of the Thomas Edison variety, read the business plan for TI. Greatbatch is credited with inventing the first implantable pacemaker, and also developed the lithium ion battery used in most implantable microelectronic devices.
Not satisfied with just being an electronic engineer, Greatbatch delved into molecular biology as well. One result of his explorations was several patents related to the use of nucleic acid antisense molecules to treat HIV infection. Greatbatch thought that TI could help commercialize his patents. Mike thought it was worth a try. The result was a company called GreatBio Technologies, which was later merged into shell company, Idaho Copper and Gold.
As the latter was already a public company, this “reverse merger” gave Greatbio tradable common stock. However, Greatbatch’s original company, Wilson Greatbatch Inc., objected to the name GreatBio and to the stock symbol GBTI. In 2001, GreatBio became Biophan, as in bio(technology), pha(rmaceuticals) and n(anotechnology).
Inventor’s Hall of Fame
Not long after Biophan came into being, Mike accompanied Wilson Greatbatch to a dinner put on by the National Inventor’s Hall of Fame, into which Greatbatch had been inducted. There, the two had a discussion with Ray Damadian, inventor of the MRI scanner that has revolutionized medical imaging. Damadian asked Greatbatch when he was going to get around to creating a pacemaker that was safe to use in MRI scans.
MRI machines use very powerful electromagnetic radiation to produce their images. As you might remember from high school science courses, magnetic fields induce electric current in conducting materials, e.g. the leads and electrodes used in pacemakers and other microelectronic implants. A pacemaker can go haywire during an MRI exam, causing the heart to beat wildly and leading in many documented cases to the death of the patient.
There is also a heating effect that can damage tissue adjacent to a metal implant. This is a serious problem not only for patients with pacemakers, but also for those with defibrillators, neurostimulators, drug pumps and certain prosthetics. As a result, MRI is effectively eliminated as a diagnostic tool for a significant percentage of the patient population most likely to need them - older folks who are the major consumers of medical services. Metal parts that many of us older cyborgs have accumulated - screws, plates, staples, and stents - may not disqualify us from MRI exams, but they do tend to mess up the images surrounding them. All of these mechanical parts for people add up to a worldwide market worth US$10 to US$12 billion annually.
MRI could also be used to guide catheters, guide wires and endoscopes into patients for minimally invasive procedures, if the devices didn’t heat up and burn the patient, not to mention the surgeon.
Safer MRI’s
What could Biophan do to make MRI scans safer? The first idea that they came up with was a photonic fiber-optic system to replace the metal leads. This is feasible, but it turns out that it would require more battery power. Also, it would entail getting a whole new technology through the FDA’s labyrinth of regulations. Another idea presented itself through Mike Weiner’s maze of connections.
Some people have catchphrases that run through their conversations. With President George W. Bush, who likes to keep things simple, the phrase is “hard work” - as in “the war on terror is hard work,” “being President is hard work,” “debating John Kerry is hard work.” With Mike Weiner, the phrase is “Another company that I’m associated with…” Besides being the CEO of Biophan, Mike sits on the boards of Biomed Solutions LLC, Technology Innovations LLC, Speech Compression Technologies LP, Nanoset LLC, and Nanocomp LLC. Most of these firms are overlapping. Mike calls this collection of companies that share management and resources a keiretsu, a Japanese term applied to companies networked around banks and trading companies.
In Mike’s keiretsu, Technology Innovations begat Biomed Solutions, which begat Biophan, which has now conceived TE-Bio out of an incestuous alliance with Biomed Solutions - more on that below. Nanoset LLC owns many of the patents and patent applications licensed to Biophan. TI and Biomed Solutions both own significant equity positions in Biophan.
When Mike Weiner gives a keiretsu corporate Christmas party and the eggnog starts flowing, you can imagine that all sorts of weird and wonderful techy conversations get started. Wilson Greatbatch started talking to Xingwu Wang, an Alfred University professor associated with Nanoset, about the safety problems that electrical leads cause during MRI procedures. Xingwu says, “Well, I think I can fix that.”
Thin film of magnetic nanoparticles
Wang’s idea was to coat the leads with a thin film of magnetic nanoparticles. These essentially act as a shield, reflecting radio-frequency waves from the MRI machine and minimizing induced current. Another innovation was a high pass RF filter that prevents high frequency pulses from being passed on to the tissue.
While working with Wang’s magnetic nanoparticles, the team realized that coatings could be “tuned” to give off very high or very low MRI “signatures.” Therefore, it was possible to make pacemakers or other implants visible to the physician through MRI. The nanoparticles could also be used to make visible to the physician the guide wires for implanting stents and other devices. Finally, they could be used by themselves as MRI contrast agents.
Mike and his team analyzed the market for MRI contrast agents and found that 25% of all MRI procedures use them (your author has had two such procedures, and both used contrast agents). The market for contrast agents is US$800 million and growing as MRI supplants other diagnostic technologies. Furthermore, other contrast agents for MRI are based on gadolinium, a highly toxic substance, making such MRI procedures not without risk for the patient.
Biophan hopes to be able to make their contrast agents tissue-specific. This could be done, for instance, by coating the particles with antibodies or receptor ligands that are bound only by certain cells. Because particles can be adjusted to give different MRI characteristics, it may be possible to do multiplexing scans where different tissue types are labeled with different particles that could be distinguished in the scan.
Drug delivery
At Nanoset, nanomagnetic particles have developed yet another talent: drug delivery. The total world market for drug delivery solutions is now estimated at around US$40 billion. Drugs can be bound to targeted nanomagnetic particles that respond to externally applied magnetic fields. The magnetic field can be used to aggregate the particles in one area of the body and then modulated to cause the particles to release the drugs. If the particles are targeted to specific tissues, the position of the particles can be verified by MRI.
A similar technology could be used to reload drugs on drug eluting surfaces such as stents. Stents are the little wire cage devices inserted to keep arteries open to the heart. They are loaded with drugs to prevent “restenosis” - reclosure of the artery. With current technology, drugs are released passively from the stent coating until the drug is used up. The nanomagnetic particles could be used to recharge the stent coating with a new dose of drug. Alternatively, they could be incorporated into the stent coating. The drug within the nanoparticles could be released as needed by activation with magnetic fields.
Biophan has set up a new division called Nanolution to work on drug delivery systems. The president is John Lanzafame, a drug delivery veteran. He was previously president of STS Biopolymers, which was acquired by Angiotech Pharmaceuticals, the company that provides the drug eluting coatings now used on stents sold by Boston Scientific.
“Another company that I’m associated with,” says Mike, again, “had a developed a thin film of thermoelectric material that could be used to drip-charge batteries for medical implants.” Since Biophan was already looking to enter the market for medical implants, this was a natural. Biophan and Nanomed Solutions formed a new company, TE Bio, around this technology.
In a thermoelectric material, a current is induced in response to a gradient in temperature from one side of the material to the other. This thermoelectric effect has been known for a long time. In fact, it was used to power the systems aboard the Voyager spacecraft, which continued to broadcast to Earth until it finally left the solar system with its tiny time capsule addressed to interstellar travelers. But nanoscale thin films have now reduced the temperature gradient required for the thermoelectric effect from 30 degrees Celsius to about 3 degrees, a differential that can be found within the human body. TE hopes to reduce the necessary temperature differential further, down to 1 degree.
TE Bio expects that its thermal electric batteries for implants will last as long as thirty years. Currently, when your pacemaker battery goes dead (after about ten years), you need a new pacemaker, requiring another round of surgery and about US$20,000 in medical expenses. But if you could keep the battery topped up using no more than body heat, you could essentially get a lifetime guarantee on your pacemaker. Besides pacemakers, the battery could be used for defibrillators, neurostimulators and drug pumps. The market for defibrillators and pacemaker batteries alone is about US$150 million.
In a masterpiece of technology outsourcing, Biophan has lined up NASA to do development work on its biothermal battery. NASA, it seems, wants to have long-term health monitoring devices implanted in its astronauts. Biophan has licensed NASA to use the technology in space while retaining earthbound commercial opportunities. Not a bad deal.
92 patents
Biophan’s not-quite-ready-for primetime slogan is “We don’t make medical devices, we make them safe and imageable for MRI. An now we make other stuff too.” Starting from a mission to make MRI procedures safer, Biophan has already diversified into contrast agents, drug delivery, and batteries. Its IP portfolio is burgeoning, with 92 patents or patent applications owned or licensed.
Running a technology company, Mike Weiner points out, is not like traditional project management, because the time lines in development are not certain. One technology may run into an unforeseen roadblock, making it desirable to have a variety of possible solutions and for that matter a variety of potential applications. A technology company is not unlike a wildcat oil exploration crew, in Mike’s view. There is always the risk of a dry hole.
So how risky is Biophan as an investment? Make no mistake, this is probably not the security in which to put your kid’s college fund. Biophan is an over-the-counter stock trading right now at about US$0.90 per share. Although an agreement with Boston Scientific could lead to a product employing Biophan technology in the near future, the company right now has essentially no revenues.
However, it also has no debt. An agreement with a sugar daddy called SBI Consulting (spun out of Soft Bank International) will keep Biophan in operating funds for the next few years at the cost of some dilution in equity. For such a small company, Biophan and its partners control an impressive list of technologies that can be employed in very large markets. This stock is a buy, in my opinion, but only for patient, speculative investors.
Find out more about Biophan
If you have an interest in this company, John Lanzafame will be giving a presentation on Biophan’s drug delivery systems at BCC’s Nanomaterials 2004 conference (www.bccresearch.com/nano2004) held October 24-27 at the Marriott Hotel in Stamford, CT. A host of other nanotech companies will also make presentations. Public companies represented will include IBM (one of the sponsors), ATT, Intel, Motorola, Freescale Semiconductor, spintronics firm NVE Corp., the molecular modeling pioneer Accelrys, nanomaterials specialist Nanophase, and the Australian biosensor company Ambri.
Bio
Steven A. Edwards received his doctorate from the University of California at San Diego in Biology. After postdoctoral work at Salk Institute, he worked as a research scientist at La Jolla Cancer Research Foundation (now Burnham Institute) before taking a position as assistant professor at Meharry Medical College in Nashville, TN. He has since been an industry analyst for BCC (www.bccresearch.com), for whom he has written several comprehensive business reports on biotechnology, medical devices, and nanotechnology. Dr. Edwards also works as an independent consultant. He is writing a book titled The Nanotech Pioneers: Where are they taking us? which will be published by Wiley VCH.
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