Nanotechnology: Emerging Healthcare Applications & Markets

EXECUTIVE SUMMARY

1.1 SCOPE AND OBJECTIVES OF REPORT

The purpose of this Theta Report is to inform strategic planners and marketing executives of the commercial status and future of nanotechnology-related medical devices, diagnostics, and therapeutics, and the impact that nanotechnology will have on the healthcare industry. Overall, this report covers:

• Types of medical devices, diagnostics, and therapeutics under development
• Types and uses of the few nanotechnology-based products currently on the market
• Information on the companies developing and marketing these products
• Information on the major academic research groups developing potential products and which might represent opportunities for technology transfer to industry

Specific topics addressed in this report include:

• Status of clinical trials
• Target launch date of nanotechnology-based medical products
• Disease states targeted and their prevalence
• Market challenges
• Market estimates and predictions for the years 2003 2007
• Funding and commercialization issues
• Market and industry trends affecting developers including regulatory requirements and public perception
• Issues affecting developers, including technical concerns, manufacturing environment, intellectual property, and competition

This report also provides an in-depth analysis of five application segments:

• Clinical diagnostics and imaging
• Therapeutics and drug delivery
• Implants and biomaterials
• Biomedical research and drug discovery tools
• Future applications

Technologies under development worldwide and the instruments used in each application are discussed for each market segment. Related technology tools necessary for the successful utilization of nanotechnology, such as scanning probe microscopy and predictive computer software, are also discussed.

This report focuses on technologies with commercial potential predicted to impact the healthcare market over the next 5 to 10 years. However, since there has been much hype about the future potential of nanotechnology, this report also briefly addresses and critically examines forward-looking tools of nanotechnology such as nanoassemblers and nanoscale robots. As these are not prospects that are expected to impact the medical/healthcare market over the forecast period of this study, they will not be covered in depth. Neither will advances in cosmeceuticals be covered, although there have already been commercialized nanoparticulate products in this area.

This report provides world market coverage and discusses both funding and development in the U.S., Europe, and Asia, with worldwide market forecasts over a 5-year forecast period. Market predictions are further included for the five major application segments mentioned above.

1.2 TARGET AUDIENCE

This report has been written to be of benefit to strategic planners and marketing managers at all pharmaceutical, medical device, diagnostic, life science, and biotechnology companies that might be interested in advances in nanotechnology. More specifically, companies that will benefit from this report include:

• Pharmaceutical companies working in the area of drug delivery or drug discovery
• Diagnostics companies interested in advances in nanosensors or nanoarrays capable of rapid real-time and single molecule detection
• Microarray or biochip companies that will compete with medical diagnostic and device sectors
• Medical device or tissue engineering companies developing active or coated devices and scaffolds

This report may also benefit individuals and investors who track advances in the evolving nanotechnology market, including venture capitalists, healthcare equity analysts, or academic research and scientific staff. This report provides coverage of commercial work in medical nanotechnology.

1.3 REPORT METHODOLOGY

1.3.1 Interviews with Clinical, Technical, and Market Experts

In researching this report, first-hand interviews were conducted with business development personnel, chief executive officers, and marketing executives from companies involved in the nanotechnology industry worldwide. In addition, relevant government personnel, business and health associations, and leading experts in the nanotechnology community were interviewed.

Nanotechnology companies contacted for this study included NanoInk, Angstrom Medica, Nanospectra Biosciences, SkyePharma, Advion BioSciences, BioForce Nanosciences, Nanosys, and Invitrogen, among others. Company interviews included questions regarding nanotechnology products, strategic focus, technologies under development, diseases targeted, strategic alliances, barriers to expansion, time to technology introduction, sales data, and revenue projections. Expert interviews addressed technological and market limiters, key companies, and factors driving or limiting growth of nanotechnology markets. Thought leaders were also asked to assess the utility and shortcomings of nanotechnologies, estimate the importance of emerging techniques and instruments, and discuss their expectations.

1.3.2 Secondary Data Sources

Numerous secondary sources were consulted for this report, including company websites, U.S. Securities and Exchange Commission (SEC) filings, annual reports, press releases, newsletters, databases, media articles, online nanotechnology discussion boards, and numerous publications in the scientific and trade literature, including those provided by associations, trade bodies, and medical conferences. Other sources of data on company revenues were consulted when not obtainable from private companies, including investment analyst reports, to develop estimates of market revenues and historical growth. Sales were also calculated based on unit sales when available.

1.4 MARKET SUMMARY

In medical markets, nanotechnology has applications in a number of areas including therapeutics, devices, and diagnostics. Nanotechnology is defined as the fabrication of structures smaller than 100 nm (or 300 400 atoms in diameter). Such structures are therefore similar in size to biologic molecules such as proteins and could play a unique role in biomedical treatment, testing, and research developments. Nanoscale materials may be capable of rapid absorption by the body, improved integration into tissue structures when used in orthopedics, and even the ability to interface with electronics to create novel biosensors.

Advances in nanotechnology may lead to the development of new biomaterials and implants; improve drug delivery; endow therapeutics with improved solubility and more precise targeting of diseased tissue; make diagnostics less invasive, more rapid, and more informative; and enable more complex biomedical research. Researchers predict that nanotechnology will significantly improve treatment of a variety of diseases over the next 5 to 10 years.

Within the past 3 years, nanotechnology has begun to take the shape of big business, with numerous companies spun off from academia, and worldwide government and private investment estimated at over $4 billion. Although only a few nanotechnology-enabled products have yet been introduced in the healthcare sector, nanostructures capable of interacting with biological components at the molecular scale are the focus of much commercial and academic research and development and will likely remain so for the foreseeable future. In 5 years, Theta Reports estimates that the world market for medical nanotechnology will surpass $3 billion.

Over the near term, academic research, drug discovery, and drug delivery are most likely to be first affected by nanoengineering. Rather than the creation of complete nanotechnology-based systems, most drug discovery and research application will likely involve the addition of nanocomponents to existing biosensor technologies, yielding nanoarrays, multiplexed nanoparticle assays, and other technologies requiring reduced samples sizes and the like.

In diagnostics, Evidots and Qdots are available from Evident Technologies and Quantum Dot Corp., respectively, for tagging. Nanoplex Technologies offers Nanobarcodes. For drug discovery applications, NanoInk's system for nanolithography, BioForce Nanosciences's NanoPro nanoarray printing system, and Advion BioSciences's NanoMate 100 mass spectroscopy system are sold to the life sciences market. Many nanotechnology-based products and systems under development may be brought first to the life sciences market and will later be adapted for commercial diagnostics applications.

Drug delivery applications are proving to be the first to market, with nanoparticulate versions of existing drugs and novel nanoparticulate compounds being introduced. These possess improved solubility and reduced adverse event profiles and the ability to target cancers. In the pharmaceutical industry, Elan's Nanosystems division and ALZA Pharmaceuticals currently have nanoparticulate drugs on the market.

Based on Theta Reports's analysis of market developments, nanotechnology is expected to make a pharmaceutical market breakthrough in 2004 through 2005, when new nanoparticulate therapeutic compounds begin to slowly reach the market. This slow rate of commercializations is expected to continue through to 2008 and 2009, when the numerous products currently in late discovery/early clinical phases may be brought to market.

By 2005, products that may reach the market include the first nanoparticulate drugs from SkyePharma (propofol), American Pharmaceutical Partners (abraxane), Nanobio (NanoHpx Herpes), NovaVax (Estrasorb), and a dermatological product from C Sixty based on fullerenes. Additional research tools and components may also be introduced in this period.

Additional benefits are predicted to be brought to the area of drug development through nanoparticle formulation services. The growing cost of drug development, now estimated at $500 million over 12 years of development, or $800 million over 14 years, including postmarket testing, makes it increasingly important for companies to rapidly develop and commit to an ideal formulation of their compound. With an estimated 30% of compounds suffering from solubility issues, particularly peptide drugs, the possibility of rapidly creating nanoparticle formulations for use in drug discovery offers the possibility of reducing drug development costs significantly and increasing the number of base compounds for potential development.

The vote of confidence in nanotechnology protein delivery technologies has been strong, with major companies, such as Merck, GlaxoSmithKline, Bristol-Myers Squibb, Wyeth, Amgen, Baxter, and Dow Chemical Co., teaming up with nanotechnology drug delivery companies. Leading drug delivery companies developing nanotechnology-based products include Elan, Flamel, SkyePharma, iMEDD, and BioSante.

Perhaps the greatest near-term impact of nanotherapeutic compounds will come in the area of tumor targeting and cancer therapies. Numerous nanodelivery companies already compete in this area, as well as the market for chemotherapeutic agents that can pass the blood-brain barrier or reduce the severe adverse events associated with toxicity. Such compounds may rapidly come to market. Advectus, for instance, believes its Nanocure is a likely candidate for fast-track designation by the U.S. Food and Drug Administration (FDA), as existing options of surgery and radiation therapies have limited success and carry adverse event risks.

Another growing drug delivery segment that will likely be influenced by nanotechnology is that for intranasal and inhaled drug delivery products. Nanotherapeutics estimates the market for inhaled, topical, and intranasal drug delivery systems will exceed $36 billion by 2005, triple the current market.

However, only a few diagnostic, imaging and medical device applications are predicted to enter the market by 2006 to 2007, and these will likely only appear after 2008 to 2009. Nanotechnology has already led to the development of a number of prototype diagnostic systems for use outside the body. These include diagnostic sensors and nanoarrays (lab-on-a-chip) techniques, which may eventually be capable of real-time single molecule detection.

Also in medical diagnostics, nanomaterials may be used as imaging agents to diagnose disease or to direct drugs to specific diseased areas of the body. For example, in a patient who has cancer, nanoscale chemotherapeutic agents tied to drug-shuttling magnetic nanoparticles or antibodies could potentially be directed at cancerous cells only, sparing healthy ones, reducing adverse events and amplifying the effect of the drug.

Finally, new nanoscale biomaterials with unique and novel properties are being developed, which, if combined with devices, may add valuable properties, such as improved biointegration, ability to repair tissue structures, prevention of adverse events caused by introduction of foreign materials, and safe use in magnetic resonance imaging (MRI) environments.

Much attention in nanotechnology has been given to more futuristic applications focused on building nanoscale systems, or nanoassembly. Although current medical nanotechnology does not include in its catalog products built atom by atom, and nanobots are not yet being used in the human body, elements of such systems are already being developed in academia. Examples of these, such as self-assembling systems, are highlighted in this report.

Medical nanoassembly may not be available for at least 10 to 15 years, and automated systems for this purpose may not be commercially viable for well over 30 years. Some theorize a medical treatment future where tiny nanosensors circulating in bloodstreams could continually gather medical information and monitor health; theoretical nanorobots would manipulate cells to allow for molecular-scale surgery, and artificial red blood cells would be able to deliver over 200 times more oxygen than natural red blood cells.

Over the past several years, the industry has seen the publication of numerous roadmaps, and national analyses of the nanotechnology market, as countries try to determine their strategic technological strengths and interests. This has led to increased funding and funding distribution. As policymakers and relevant bodies gain greater industrial awareness and understanding, there has been greater allocation of funds to build large infrastructure and institutions, as well as encouragement of spin-offs in other countries.