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Tech's medical marvels

CNET's Michael Kanellos explains why tech start-ups and traditional giants are now racing to get into hospitals and drug laboratories.

With a tube stuck in your nose, you're not in a very good position to comparison shop.

That, in part, explains the migration of high-tech companies into the medical field. Escalating health care costs, breakthroughs in medical knowledge and the fact that you're pretty much a captive audience when dressed in a hospital gown have created an opportunity for start-ups and traditional giants to get into hospitals and drug laboratories.

Intel Capital, for instance, has started to place "eyes and ears" investments in life sciences companies such as Concurrent Pharmaceuticals, according to Eva Jack, who recently became the biotech strategic investment manager for Intel.

And in 2002, the Santa Clara, Calif.-based chipmaker formed the Proactive Health Research group to come up with ways that sensors and other computer technology could be used for monitoring patient health or the progress of diseases.

For the past two years, more venture funding ($3.2 billion) has gone to medical device companies than to semiconductor makers ($2.8 billion), according to research firm VentureOne. From a human interest point of view, some of the ideas emerging out of medicine are tough to beat. This week, Massachusetts-based TransMedics, which has developed what it calls the "Portable Organ Preservation System" (POPS), obtained $27.6 million in funding from--among others--British venture capital giant 3i.

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Senior department editor Michael Kanellos scrutinizes the hardware industry in a regular Enterprise Hardware column that ranges from chips to servers and other critical business systems.

"The current state-of-the-art system for transporting critically needed organs is essentially a plastic bag in a picnic cooler filled with ice," according to TransMedics. With POPS, by contrast, donations are "kept perfused with warm oxygenated blood and in a normal-functioning state. Moreover, the receiving surgeon can assess the organ's functional status using monitoring equipment built into the device."

Isn't that a little more intriguing than a revolution in data storage architecture? After all, it might be your spleen in one of those boxes some day.

In a lot of ways, the convergence between the medical and computer fields can be seen as a series of coincidences.
In a lot of ways, the convergence between the medical and computer fields can be seen as a series of coincidences. Celera Genomics uncoiled the human genome in 2000. In turn, that breakthrough led to an explosion of computer-generated experiments involving protein folding and gene interactions.

Research firm IDC estimates that biosciences organizations will spend $30 billion on technology-related purchases in 2006, up from $12 billion in 2001.

"We'll see, over the next decade, the complete transformation (of the industry) to very database intensive as opposed to wet lab intensive," Debra Goldfarb, a life sciences specialist at IDC, said last year.

Researchers have recently begun to discover that a lot of silicon technology actually transfers quite well to health care purposes. In 2002, ST Microelectronics showed off a disposable chip that prepares blood samples for DNA scans. At the moment, these tests require expensive lab equipment that needs to be continually sterilized.

Researchers have recently begun to discover that a lot of silicon technology actually transfers quite well to health care purposes.
In addition, scientists at the Fred Hutcheson Cancer Research Center are currently tinkering with Raman spectroscopy equipment, used to study the composition of semiconductors, to examine cells.

Ideally, taking the mass-manufacturing techniques developed over the past 30 years in Silicon Valley could lead to better medical products for a lower price. At the same time, their price would be high enough to allow developers to obtain larger margins than they do on computer products. Medical devices have historically carried astronomical price tags, so these companies have a high tent to work within.

Endobionics, for instance, has created a silicon-based microsyringe for injecting medicines straight into arterial tissue. The syringe pops out of the side of a tube like a splinter. There are roughly 300,000 patients each year in the United States who could use this. "Our treatment will cost about $1500 per patient above the cost of routine angioplasty with bare metal stents," wrote Lynn Barr, CEO of the San Leandro, Calif.-based company in an e-mail. Current equipment costs about $4,000. (Like a lot of these new medical inventions, the device has not been approved yet.)

NanoGram Devices sells batteries for an implantable defibrillator. "It shocks the heart into action," CEO Barry Cheskin said. Where power sources in current defibrillators last three to five years, NanoGram's will last eight, he said. The batteries sell for $300 to $500 apiece, but they're not the sort of item anyone wants to skimp on. They're also cheaper than existing power supplies, according to Cheskin.

Over time, these technologies could create the "virtuous cycle" of rampant consumption the PC industry loves. Picture it: You're 132, and at this point you're actually just a head in a jar of preservative. It's been a long, wonderful life. But there is an eye upgrade coming out that will let you see objects up to 6 inches away.