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By Salvatore Salamone

September 15, 2003 | “Proceed with caution” is the operative phrase when evaluating the application of nanotechnology to the life sciences. No one doubts that nanobiotechnology holds great promise, but virtually everyone agrees substantial obstacles remain before a commercial market develops.

That said, nanotechnology is already having an impact on biomedical R&D and clinical tools.

One example is Genicon’s nano-sized particle technology, called Resonance Light Scattering (RLS) technology. By amplifying the light emitted from microarrays, RLS makes detection easier. Another example is a pathogen detector expected soon from Integrated Nano-Technologies. It will reduce the time needed to identify some pathogens from the hours to minutes (see Detecting Deadly Agents in Small Places, June 2003 Bio-IT World, page 11).

Indeed, there are many positive signs for nanobiotech, not least of which is increased federal funding for life science-related nanotech R&D funneled through the National Nanotechology Initiative (NNI). The 2004 fiscal budget for NNI is $847 million, about 9.5 percent higher than in 2003. Counter-bioterrorism funds are also earmarked for nanobiotechnology projects.

Moreover, many technology giants (such as Lucent and Intel) are venturing into nanotechnology. While their efforts are aimed mostly at building better electronic devices, the techniques they develop will be used to manufacture nanobiotech products and devices (see Using Biotech to Improve Nanotech).

Lucent, for example, recently created the New Jersey Nanotechnology Consortium which provides biotech companies with access to clean rooms and production facilities to develop prototypes of nanotech products for the life sciences.

Even companies like Avery Dennison (the office supply giant), is looking at ways to use nanotechnology in the life sciences. “It’s not clear to me what the killer [nanobiotech] application or applications will be,” says Michael Lang, business director of Avery Dennison Microreplication. “There are broad application areas, like sensors and biomedical devices.”

Lang’s group makes a number of life science products including microfluid devices and microneedle drug delivery systems (a.k.a. “the patch,”) that it sells to pharmaceutical companies who add the medicine.

Reality Check
So what’s the problem? The real challenge for pioneering nanobiotech companies is figuring out how to commercialize products and attract needed funding. Neither is simple. Locking down intellectual property, for example, is an important part of commercialization. But many nanotech IP issues remain unclear and a patent land-grab has erupted.

“Because it’s such a nascent field, there appears to be significant competition to build up IP fences,” noted Keith Walker, director of IP analytics at consulting firm InteCap, speaking at the recent Infocast NanoBiotech Intellectual Property Landscape conference held in Boston.

There is even a learning curve for  patent attorneys and Patent Office examiners. “Nanotech IP today is where biotech IP was around 1980,” says Timothy Hsieh, a biotech IP attorney at the law firm Finnegan, Henderson, Farabow, Garrett & Dunner, also at the same nanobiotech conference.

In the early days of biotech patents, many companies rushed to patent life forms, SNPs, and other entities. As time passed, the conditions for awarding a pattern became more stringent. A similar trend is happening with nano patents.

Just defining nanotechnology is a challenge. “The term covers materials, processes for making or using materials, electronic and optical devices and systems, bio-medical devices and systems, and MEMs,” says Hsieh. “The broad definition leads to difficulties in IP classification, searching, and analysis.”

Sorting through the IP issues can be expensive. One small nanotech company, Zyvex, which is developing tools and materials that would be used by other companies to produce commercial nanodevices, such as nano-based life science detectors and diagnostic tools, spends $50,000 or more per month to pay their patent attorneys. Many companies simply do not have the operating capital to do this.

Cash is King
So far, the financial community has been reluctant to invest liberally in nanobiotech. Detailed investment numbers are hard to find, but several analysts say most funding for nanotech companies has come from government grants and modest private investment.

Many VCs compare nanotech companies to dotcoms. “Nanotech is not only being hyped, it’s being overhyped,” says Tom Cellucci, chief operating officer of Zyvex.

“In the dotcom market, everyone named their companies e-this or dotcom that,” says Raymond Lopez, an independent IT consultant. “Today, you’re seeing a similar thing with nanotech companies and I’m sure this puts off some investors.”  

Another put-off is the lack of professional management.  Many nanotech companies are spin-offs of university research groups; while their heads may be excellent researchers, they’re usually not experienced business leaders.

“When I got to Zyvex there were 51 people and 49 programs,” says Cellucci. Since joining the company, Cellucci says he’s put together a strategic marketing plan and boiled the 49 programs down to three main areas of focus.

Clearly the nanobiotech pot is bubbling, but the stew is far from finished.

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