Sub Swallows Owner—or, Tale of the Tail

Yesterday, American Pharmaceutical Partners [NASDAQ: APPX] announced it was acquiring privately-held American Biosciences Inc. (ABI) in an all stock transaction worth $3.27 billion. What makes this deal different from your average biopatch merger is that APPX is the majority owned-subsidiary of ABI. So now APPX will own ABI, which owns APPX, so then…hey wait a minute. Wall Street is obviously confused by the deal as APPX stock has dropped over 20% as this is written. So to explain this M & A wizardry to the average investor, I will employ as a pedagogical tool the following poem:


A serpent named Euclideus
Was extremely hideous
A circle was more pleasing, so thought he
His north end was his mouth end
In which he took his south end
‘Til his length became a perfect pi times D.

With his tail within his grasp
He was no ordinary asp
But the price for glory’s hunger must be paid
His fate he was a’ forging
As his tail he was engorging
‘Til a point to show position Euclid made.


The public shareholders must feel that their equity in the APPX is disappearing like Euclideus. As APPX swallows its tail (ABI), the amount of the whole beast that the public holds is vanishing; before the merger, they owned 35.6% of APPX, with ABI holding the rest-- after the merger will own only 16.6% of APPX with ABI’s former shareholders holding the rest. Doesn’t seem quite fair.

On the other hand, APPX was not ABI’s only asset. The company also held rights to 50% of the profits from North American sales of Abraxane, the flagship proprietary product of APPX, without which it is solely a generic drug company. ABI also holds marketing rights to the drug in the rest of the world.

Abraxane is a formulation of paclitaxel (active ingredient of Taxol) that is wrapped up in a nanoparticle. This form of delivery makes the drug more effective and less toxic for the patient. Paclitaxel and its derivatives (called taxanes) are the most widely used drugs for the chemotherapy of cancer patients. Unfortunately, paclitaxel is not soluble in water, which is what the body is mostly composed of. Thus Taxol consists of paclitaxel mixed with an awful solvent called Cremaphor-El and alcohol. Patients must be dosed with steroids in order to tolerate the side-effects of Cremaphor, which is even more toxic than paclitaxel itself. .

The Abraxane nanoparticle is built out of serum albumin, the most common protein found in human serum. The albumin nanoparticle is about 130 nanometers in diameter, somewhat larger than the 50 nanometer pores in capillaries that allow the egress of small particles into tissue. However, tumors are known to have particularly leaky blood vessels, so this larger size may actually promote the concentration of Abraxane specifically within tumors. Moreover, the endothelial cells lining blood vessels have a natural transport system that collects small molecules bound to albumin.

However it works, the bottom line is that Abraxane is more effective and has fewer side effects than other taxane drugs. It is marketed to treat breast cancer and further approvals are expected for a variety of solid tumors. It will very likely be blockbuster drug. Abraxane was developed by ABI, which has a variety of other drug delivery tricks up its sleeves and a large portfolio of intellectual property.

APPX and ABI will be merged into a new entity called Abraxis BioScience. Patrick Soon-Shiong, now the CEO of ABI and executive chairman of APPX, will be chairman and CEO of the combined companies.

Critics of the deal will surely accuse Patrick Soon-Shiong of self-dealing. Soon-Shiong is no stranger to controversy--or to litigation. His own brother, Terrence, has sued him twice over various business dealings. Myself, I will withhold judgment on the merger until it becomes clear how the deal works out.

About the poem:
The original version of Euclideus was written by my father, Tom Edwards, while taking geometry in college. Unfortunately, he has passed away and the only copy was lost with the rest of his poetry during his somewhat disorderly life. So the version you see above was reconstructed from my own defective memory along with some spare parts and used verbiage. My father's other works included such gems as The Tailor in the Nudist Camp, and the Red-Eyed Armadillo. Of the latter, I can remember the first line…”The red-eyed armadillo in the burning Texas sands.” I also remember that it contained the word Pleistocene and had something to do with evolution. Anybody with constructive suggestions for its completion should contact me at steven.alan.edwards@gmail.com

IBM and the Nanotube Transistor

At a conference a couple of years ago, I got into an argument with Chris Phoenix of the Center for Responsible Nanotechnology, not a hard thing to do since Chris lives to argue. The Center is mainly concerned with molecular manufacturing, which they seem to believe is the only true manifestation of nanotech despite the fact that it is mainly speculative fiction to this point. Chris was concerned that India or China could develop a molecular manufacturing capability and that the West would immediately be swamped because we could never catch up. I offered the opinion that there was more nanotech expertise in the Zurich lab of IBM than there was in all of India so I wasn’t overly concerned.

We should probably get over our chauvinistic leanings, one way or another. Ever since the outlines of the nanotech revolution became apparent, it has been argued that the real winners would not be the smattering of entrepreneur driven enterprises but the big multinationals like IBM, GE or Dow Chemical. The GE plant which employs my wife is closing next summer, to be replaced by a similar plant operated in China. These multinationals do not really care about the nation-state from which their earnings derive. In fact, their revenues are greater than the gross national product of most countries.

Just the round-off error is IBM’s revenues would dwarf the current nanotech industry. IBM would never be mistaken by stock market pros for a nanotech play, but nanotech owes much of the seriousness with which it is taken to IBM. In a sense, the nanotech era was launched by the invention of the scanning tunneling microscope by Gerd Binnig and Heinrich Roher from the IBM Zurich Research Laboratory. Don Eigler used it, not only as an imaging tool, but to move individual atoms around. His first masterpiece, titled “The Beginning” in IBM’s Almaden Lab Gallery, spelled out the IBM logo in xenon atoms. The ability to manipulate matter at the atomic level was for the first time proven.

Still, IBM did not bother commercialize the scanning tunneling microscope or Binnig’s later innovation, the atomic force microscope, by itself. Big Blue was content to license that out to others (Veeco holds the major market share for scanning probe microscopes). IBM is waiting for a market worth its attention. Like transistors…

IBM has now created the first carbon nanotube electroluminescent transistor, which it claims, according to EE Times, glows 1,000 times brighter than a light-emitting diode with as much as 10,000 times more photon flux. Because it creates thousands of photons in silicon at the same energy expenditure as a single photon in gallium arsenide, IBM predicts that carbon nanotube transistors will lead to integrated optics on silicon chips. That is, information will be shuttled around using photons instead of electrons, light instead of electricity.

Though other groups have shown previously that nanotubes were luminescent after being stimulated with lasers, IBM is the first to show luminescence in response to purely electrical stimulation. It does so by suspending the nanotubes no more than 2 nm in diameter over a silicon back gate. The devices emit infrared light that is related exponentially to the drive current of the back gate.

Is this the anticipated killer app for nanotechnology? Possibly, but computer chips are hardly my specialty. I would appreciate any comments by knowledgeable adults or precocious children. E-mail me at steven.alan.edwards@gmail.com.

Immortality, Nanotech and Magic

What, you might ask, is the connection between nanotechnology and immortality? Well, most recently, there is Ray Kurzweil’s book, Fantastic Voyage: Live Long Enough to Live Forever, which he wrote with an MD, Terry Grossman, an “expert in longevity medicine” according to the publisher’s publicity. The book is named after the Isaac Aasimov sci-fi story and the resulting Raquel Welch movie featuring miniature submarines that may eventually cruise through our veins. Say the authors, nanotechnology is the third bridge that will connect present day medicine to a future in which we are all, barring fatal accidents, immortal. The second bridge is biotechnology and the first bridge, naturally, is Kurzweil’s and Grossman’s diet and exercise program, which will not be discussed here.

But before Kurzweil ever happened upon nanotech there was Ralph Merkle, an Eric Drexler associate, and by all accounts, a very bright guy. As a graduate student at Stanford he was credited with being the co-inventor of public key encryption, a method of computer security that has become widely used to protect the contents of e-mail and other computer documents. After receiving his doctorate in 1979, Merkle worked at Xerox PARC (Palo Alto Research Center), a legendary lab that was responsible for many of the innovations now used in computing. Merkle was also paid to dabble in nanotech with Drexler, which although the work was largely useless to Xerox “was just part of the ambience of work in a major research center” and apparently yielded intellectual rewards.

Ralph Merkle is also a director of the cryonic firm Alcor, which freezes people…no, excuse me…vitrifies corpses in the hope that they can eventually be rejuvenated with advanced technology. Vitrification is different than simple freezing, because corpses are perfused with a cryonic solution (M22 from 21st Century Medicine) composed of such poisons as polyethylene glycol (automotive antifreeze), formic acid, dimethyl sulfoxide and glycerol [this is in error, corrected in a later post. M22 contains ethylene glycol (not polyethylene glycol), formamide (not formic acid) and does not contain glycerol]. These largely prevent cell membrane-damaging ice crystals from forming. As Merkle points out, your probability of dying (permanently) if you don’t undergo this procedure is 100%, whereas there is a finite probability that the technical problems that led to your terminal disease may be correctable at some point in the future, and that your body can be reanimated using a procedure that hasn’t been invented yet.

When Jim Von Ehr founded Zyvex in the hope of commercializing atomically precise manufacturing, he hired Merkle as a consultant. Jim and Zyvex quickly found that creating a nanotech assembler from scratch was a daunting task. Research at the company descended into a sort of academic model, or perhaps a Xerox PARC model, with projects and people proliferating. When Tom Celluci was made President and COO in 2003, he says, there were “82 employees and 85 projects.” He cut the number of projects to three. Among those who left Zyvex as a result was Merkle, eventually finding an academic position in the Computer Science department of Georgia Tech. Celluci complained that Merkle’s interviews with the press about Zyvex would always descend into discussions of life-extension and freezing heads and corpses, which in Celluci’s view undercut the serious image that the company was trying to project.

It was to Merkle’s current home, Georgia Tech that I traveled recently to take in the Immortality Institute’s first conference. As a Tennessee-dwelling refugee from California, it was weird to see so many stereotypical representatives of my former home transported to the heart of Dixie. There were a lot of interesting people there, including: Martine Rothblatt, a communications satellite pioneer; Max More, founder of the Extropians techno-cult; Michael Rose, author of The Evolutionary Biology of Aging; and Aubrey de Grey, from Cambridge University, the pony-tailed promoter of Strategies for Negligible Senescence (SENS), who has made himself the willing target of outraged gerontologists everywhere for his basic assertion that aging is a disease that can be cured.

There was a lot of talk on legal problems associated with cryonics. Basically, it is illegal to freeze anybody before they are declared legally dead. On the other hand, it is legally impossible for dead people to own property or to institute lawsuits. What leverage do you have, therefore, to make sure that someone will keep up your payments to Alcor or revive you when the time comes? How to keep your nest egg accumulating for the next century or two or three?

I was particularly interested in Merkle’s talk, as I had interviewed him for The Nanotech Pioneers: Where are they taking us? His presentation, titled “Cryonics and Nanotechnology” was a disappointment. The problem he addressed was how to reanimate the frozen dead person. The answer, of course, is the aforementioned tiny submarines. Nanotechnology, for Merkle, is the “sufficiently advanced technology indistinguishable from magic” made famous by science fiction writer Arthur C. Clarke. Lots of cartoons of little nanomachines that don’t exist yet. Imaginary artificial cells from Robert A. Freitas, Jr., author of Nanomedicine. Kind of short on details. Merkle is an expert on being vague. His speaking style should be studied by aspiring politicians.

There were, however, some real advances in the science of longevity mentioned by other speakers. I will save them for another post.

Writing very, very small

Note added, 12/5/2005: Dr. Cedric Loiret-Bernal has pointed out to me that Bioforce Nanosciences has not licensed "dip-pen nanolithography" from Northwestern. Not only does Northwestern hold the patent, but the term "dip-pen nanolithography" is trademarked. Therefore, it cannot be said that Bioforce is commercializing this technology. Instead, Bioforce is commercializing a very similar technology (over which there may be patent disputes in the future).

Dr. Loiret Bernal has also suggested some other more literary editing of my post. In a Wikipedia sort of collaborative spirit, I have incorporated his suggestions below in brackets to indicate Loiret-Bernal's authorship.


“Dip-pen nanolithography [DPN]” is a very high tech sounding term, but the concept is very simple. Essentially, it involves writing with a very tiny fountain pen. The pen, in this case, is an atomic force microscope tip mounted on a cantilever. The ink can include any sort of small molecule, and some fairly large ones, like buckyballs, DNA oligonucleotides, or proteins.

DPN came out of the lab of Chad Mirkin, at Northwestern and is being commercialized by his company, Chicago-based NanoInk, as well as another midwestern company, Bioforce Nanosciences. At the NanoCommerce conference in Chicago, I was privileged to interview Dr. Cedric Loiret-Bernal, CEO of NanoInk. That interview is now available on Nanotechnology.com’s multimedia page.

When first it appeared, DPN seemed like a solution in search of a problem. We were told that it could be used for drawing very tiny electronic circuits, but standard lithography does this very well, and is already coming close to the resolution of DPN, about 15 nm. Another use was the creation of array-type bioassays. However, Affymetrix has effectively tied up the intellectual property for oligonucleotide assays used for [DNA] gene expression. Besides which, all of the genes in the human genome can be assayed on a single microarray chip. Why then is a nanoarray necessary? Bioforce, particularly, is pitching the use of DPN for protein assays. However, nanoscale arrays are not really appropriate for proteins, since a single protein can have a diameter in the 10s of nanometers. DPN, IMHO, is overkill.

NanoInk, on the other hand, is pushing two very commercial uses for DPN.
1) Photomask repair
2) Coding [Encrypting] pharmaceuticals to fight counterfeiting [and illegal diversion].

Photomasks are used in the creation of semiconductor chips. It is very costly to discard photomasks that have a defect since a single such photomask may be worth as much as $250,000, given the time and equipment used to create it. DPN excels at the deposition of very small amounts of material at precise locations, controlled at the nanometer level, and so could be used to repair photomasks. NanoInk is already working [with] a manufacturer to commercialize this technology.

According to Loiret-Bernal, pharmaceutical companies lose about $25 billion in revenues due to counterfeiting every year, not to mention the potential product liabilities, if a drug doesn’t do what is supposed to do, or has side-effects it is not supposed to have. A case in point came up just recently; China is having trouble fighting the bird flu, because much of the vaccine it is using to vaccinate chickens and ducks turned out to be useless stuff churned out by counterfeiters. "While the rate of counterfeiting in the US is difficult to estimate, on a global scale, counterfeiting is a widespread problem and affects both developing and developed countries. The World Health Organization (WHO) has reported that up to 25% of medicines consumed in poor countries are counterfeit or substandard,” said Dr. Randall W. Lutter, Acting FDA Associate Commissioner for Policy &Planning, in testimony before Congress.

In general, the counterfeiters are not small operators, but other drug companies based in Asia or Africa, with sophisticated equipment. It is virtually impossible to distinguish their wares from the real thing without doing a full chemical analysis.

Nano to the rescue. NanoInk is already working with one pharmaceutical company to use DPN to put a code [an encryption] on each individual capsule or tablet that will tell when, where and by whom it was made. Eventually, Loiret-Bernal hopes to have six centers worldwide where the codes could be read from any suspicious batch of pills.

How to make a small fortune in nanotech (start with a large one)

Fellow blogger Darrell Brookstein noted the recent purchase of Quantum Dot Corp. and Biopixels by life sciences company Invitrogen. “… but I don't know if investors made any money on this,” said Darrell, “ no one is talking $$$s or details…”

In fact, the price that Invitrogen paid was not revealed in the press releases, possibly to avoid embarrassing the entreprenuers involved. However, Invitrogen’s VP for Investor Relations, Adam Taiche told me that the price tag came to less than $30 million for both companies. That is much less than the venture capital that went into Quantum Dot alone. This proves Darrell’s point: “…some good companies CAN'T get another VC round on their way to IPO-heaven (if they coulda, they woulda).”

It may seem surprising that Invitrogen would want to buy two quantum dot companies (even at a two for one sale), but as Taiche points out, they weren’t buying the companies as viable commercial entities, but for their intellectual property estate.

There is also something defensive about Invitrogen’s acquisition. Quantum dots as fluorescent labels for bioassays compete rather directly with the company’s Molecular Probes division. “Better we should develop this, than leave the opportunity for our competitors,” said Taiche.


Fullerenes for your face

I’m indebted to Cientifica’s Tim Harper for this little tidbit scavenged from London’s Sunday Times:

Zelens day and night creams contain Fullerene C60, a powerful free-radical-fighter, as well as a cocktail of other antioxidants such as vitamins C and E. Day cream, £135, and night cream, £150, from Selfridges; 0870 837 7377

Another ad at glamourmagazine.com advises, Before you balk at the price, listen to this: Zelens face creams include a Nobel Prize-winning antioxidant.

I hope the late Richard Smalley is smiling in his grave.

C60, aka buckminsterfullerene is actually one of the most powerful antioxidants known to chemistry. The company C-Sixty, Inc. has a collaborative agreement with Merck to develop fullerenes as anti-oxidant pharmaceuticals. Whether fullerenes will do anything good for your skin is an open question.

An IPO That Won't Happen Soon

I once recruited Stephen Empedocles, Nanosys’ Vice President for Business Development, to be a speaker at Nanotech and Biotech Convergence—2004, a conference that I was organizing for BCC. He said he would do it as long as he could be a keynote speaker. I thought that was pretty cheeky, but I agreed, because Nanosys, with its Dream Team board of scientific advisors, is one of the premiere nanotech companies around. Plus I wanted to find out what they were getting for all the millions of dollars they were spending on intellectual property.

A week before he was scheduled to speak, Empedocles called me up and said that lawyers for Nanosys were forbidding him to speak. “Why?” I asked. The lawyers were also forbidding him to say why, but all would be revealed, he said, in due time.

Well, due time came and went and I had just about forgotten the whole episode, when notice came that Nanosys was going to hold an initial public offering (IPO). Empedocles and other officers were in the SEC mandated “quiet period” before an IPO during which they could do no public proselytizing. Though there are a few publicly traded nanomaterials companies, eg Nanophase Technologies [NANX—NASDAQ], Nanosys would be the first high profile company to test the public’s appetite for nanotech. The date was set for the IPO. Nanotech execs and stockbrokers held their collective breaths and then…nothing happened. The offering was first put on hold—Nanosys execs were off the speaking tours for months—and then, because of “market conditions,” the IPO was quietly withdrawn. But it sounded like a window slamming shut. NASDAQ might as well have put out a sign that no nanotech companies need apply for listing.

There were corollary effects as well. A recent study suggests that venture capital funding for small tech has actually declined in the last year, despite heavy government funding of nanotech research. With no IPO outlet, the exit strategies of venture capitalists are severely restrained. The “chasm of death” that lies between the end of venture capital and the beginning of public funding yawns ever wider.

Ironically, one company that has not suffered at all is Nanosys itself. A series of government contracts have kept the wolf away from the door. Yesterday came news that Nanosys had raised another $40 million in capital in a financing led by El Dorado Ventures. So we can expect that Nanosys will be in no hurry to resurrect its IPO attempt.

What the nanotech industry (if there is such a thing) needs is one big payout for investors to whet the public’s appetite. Right now, I’m not sure where it’s going to come from. But it’s out there.

The Father of Dendrimers Speaks...

At the NanoCommerce conference in Chicago, I was able to get an interview with Don Tomalia, in the brief period between his appearance on a Homeland Security panel and his quick departure back to Michigan. You can listen to the full 20 minute interview by visiting Nanotechnology.com’s multimedia page.

Back in the 1980s at Dow Chemical, Don Tomalia invented dendrimers, branching polymers that grow onion-like into molecularly precise spherical structures. They are, in effect, a kind of radial plastic, and like plastic have myriad uses, or they would have, if they weren’t so expensive. But, as Tomalia points out, when nylon was first invented, it was the most expensive material in the world. Tomalia believes that with a new process Dendritic Nanotechnologies has solved the price problem, reducing the cost from $100s of dollars per gram for conventional PAMAM dendrimers to eventually $10-$25 per pound, for the company’s new Priostar family of dendrimers.

Already, dendrimers have found some commercial applications. Qiagen sells dendrimers for the “transfection” of DNA into cells for genetic engineering purposes. Dade Behring markets a rapid dendrimer-based kit for diagnosing heart attacks that is used in emergency rooms. An Australian firm, Starpharma, has begun clinical trials of a dendrimer that prevents HIV infection and may be used eventually as an AIDS therapeutic. Starpharma’s Tom McCarthy refers to dendrimers as “molecular Velcro”—multiple binding sites on the surface of the dendrimer surround the virus and prevent it from functioning. The company has patented the use of dendrimers as anti-microbials against a wide variety of pathogens.

Cambridge Display Technology is working on dendrimers conjugated to phosphorescent groups in the hope of making white light organic LEDS. Dendritic Nanotechnologies is working with unnamed partners to “passivate” quantum dots—essentially wrapping the dot in a dendrimer. This prevents unwanted chemical interactions; commercial quantum dots are usually composed of highly toxic cadmium selenide.

Tomalia’s group worked for three years with James Baker, from the University of Michigan Medical School, to develop dendrimers as drug delivery agents for the treatment of cancer. The ideal cancer drug, in Baker’s view, would have a module that would target a particular cancer type, a module that would contain a contrast agent for MRI detection, a module that would contain the chemotherapeutic agent, and perhaps a module that would allow for fluorescent detection. Such a “smart drug” could be composed of dendrimers that could be mixed and matched as needed. Baker has been funded by the National Cancer Institute to make these smart drugs a reality.

Tomalia is a visionary; when he talks about his favorite subject, his eyes tend to roll up in his head and his voice grows rapturous. Dendrimers, he says, have a core and shell structure, analogous to atoms. Each generation of the branched polymer adds to the shell and changes the weight and properties of the dendrimer. There could be, he says, a whole new chemistry--periodic tables of dendrimers, each table involving different chemical structures. There are over 100 described compositional families of dendrimers and each new dendrimer is essentially an atomically precise nanodevice. Add to that about 1000 different chemistries used to modify the surface and you can generate a literally infinite number of possible combinations of dendrimers with selected chemical properties. Time, money and imagination seem to be the only limiting factors.

Orchids, iPods and Owlstone

You have to admire their style. Advance Nanotech, a British/American venture capital group, gave a nice reception at the NanoCommerce conference in Chicago for their portfolio company Owlstone. The soiree featured scotch poured out in tumblers and three lovely young ladies who served as hostesses. As NanoCommerce, like any nano conference, had a male: female ratio of about 20:1, these beauties stood out like exotic orchids in a desert.

After being chatted up by the women, I was passed off to an even younger gentleman, who I took to be an intern, as he looked to be maybe nineteen and in fact turned out to be all of twenty-six. He introduced himself as Andrew Koehl, co-founder of Owlstone, a spinout from Cambridge University in the U.K. The other co-founder is his equally young classmate, Billy Boyle, an effusive Irishman.

What do they do? Well, using nanofabrication techniques, they have shrunk a field asymmetric ion mass spectrometry device (FAIMS) to the point that it could fit in a badge size detector that could be clipped to your shirt pocket. Why would you want such a thing? Basically, this is a chemical detection device, similar to the tabletop instruments that are employed at airport security gates, which security personnel use to monitor swabs for the presence of explosive materials, etc. Owlstone shrinks the box 1000 fold so that it could be carried easily and unobtrusively by soldiers, cops or FBI agents. The device also has medical uses for breath analysis, and could be employed for monitoring environmental quality, chemical process control or even as a smoke detector. All told, the company projects an addressable market of $4 billion or so.

FAIMS is an improvement on plain vanilla ion mobility spectrometry, which can’t easily be miniaturized, since resolution is determined by migration of the chemical in question through a drift tube. Current technology also suffers from the need for high voltages. FAIMS, on the other hand, requires ionization of the chemical with a radioactive source, which has its own liabilities, but presumably the quantity of radioactivity would be so minimal as to be harmless. Identification of individual entities involves both the mass and the shape of the chemical. Owlstone claims that the device can be used to detect any chemical compound in gas phase.

I can’t comment on the business acumen of the two young entrepreneurs. Hopefully, the connection with Advance Nanotech will be useful to them in this regard. But the gadget, if it works as advertised, seems really impressive. In the future, sensors of all kinds will likely be ubiquitous and Wi-Fi enabled, so the CDC or the FBI can respond immediately, as needed. FAIMS would appear to be able to detect a large fraction of all things worth detecting.

Aside from Billy Boyle’s presentation, the highlight of the evening was a drawing for two Apple iPods Nano. Everybody threw their business card in a bowl and Boyle drew one out. In the interest of full disclosure, I must admit that I won an iPod. The secret of these drawings, I am convinced, is to have a business card that is slightly larger than average and made with a somewhat rough paper stock. While all the shiny, standard cards congeal in a lump at the bottom of the bowl, the larger card is easily grasped and its texture is pleasing to the fingers.

Let me state categorically that neither free gifts nor the attention of young ladies will buy space on this blog. However, I do enjoy and appreciate all attempts to subvert this ethical standard.

Of Nanotech Dreams and Revenue Streams

James von Ehr, founder and CEO of Zyvex, is a high concept kind of guy. Zyvex was created for the express purpose of making atomically precise manufacturing a reality. He expects Zyvex to be the next GE. So it was a little surprising when a press release came out last week revealing that he had made an equity investment in Atomate.

Atomate is a tools company. Specifically, they make carbon vapor deposition systems for the production of carbon nanotubes and other nanomaterials. Plus, they work on process development. It could be a good business, especially with everybody and his mother trying to get into nanotech. But it doesn’t sound like a von Ehr sort of business. Selling nanotools may get you up to a $100 million company, says Jim, but there’s not enough volume or high enough margins to grow a major corporation in this area. So, when I got the chance to interview Jim, I asked him about Atomate.

Nanotechnology.com had sent me off to the NanoCommerce conference with a handy little MP3 recording device. The idea was to record interviews with prominent nanotech pioneers; these will be available soon as downloadable sound files on the website.In addition to Von Ehr, so far I’ve recorded conversations with David Macdonald, CEO of Nanomix, and Donald Tomalia, the initial inventor of dendrimers, and the founder of Dendritic Nanotechnologies.

So what was von Ehr’s interest in Atomate? In turns out that CEO Brian Lim had taken him aside and had given him a private presentation. Lim is working on the prototype of something that involves nanotubes and a market worth billions of dollars. Jim says the product addresses a decades old industry, but beyond that he wouldn’t give any clues.

Baseball bats, manipulators and MEMS

So what’s the real killer app for carbon nanotubes right now? Baseball bats, of course. Zyvex makes a product called Nanosolve, which is a solution of carbon nanotubes that have been disaggregated, dispersed and modified so that they can be incorporated into polyurethane, epoxy resins or polymers. Easton Sports has used Nanosolve to incorporate nanotubes into its new Stealth CNT carbon fiber baseball bat. Optimized flex, responsiveness and more kick, says Easton about their new bat. It’s not legal in the major leagues, however, where they still use the original nanocomposite—wood. Easton is also putting nanotubes into bicycle parts.

Zyvex’ major product line is nanomanipulators, which allows you to play with your nanoparticles under an electron microscope. These are mostly sold to the semiconductor industry, which finds they are wonderful tools for probing their chips.

A new project for Zyvex is a “neurotransponder” that could eventually allow people with spinal cord injuries to get up and walk. The idea is to transpose neural impulses into a signal that could be broadcast to a receiver attached to a nerve on the other side of the spinal cord lesion. The signal would be decoded back into neural impulse, hopefully stimulating the right muscle to do the right thing at the right time. The transponder, we are told, is about the size of one of Jim von Ehr’s ear hairs.

Zyvex has a large grant to work on MEMS (microelectromechanical systems) with Honeywell. The idea is to make tools that will allow you to make smaller tools that will eventually allow you to work efficiently with one atom at a time. This idea is right out of Feynman’s “There’s plenty of room at the bottom” talk, the classical top down approach to nanotechnology.

Atomically precise manufacturing will not be performed with Drexler’s nanobots. Instead it will involve an assembly line-like process within a fairly large machine, according to Jim. The first material that Zyvex will work with is silicon. They hope to be able to program the production of atomically precise three dimensional structures in the not too distant future. The dream come true.