Jittery Wall Street manages to smile for the tiny camera

By Avi Machlis
Small Times Correspondent

JERUSALEM, Oct. 5, 2001 — Traveling through the human body may sound like the stuff of science fiction, but this week an Israeli company called Given Imaging Ltd. found investors on Wall Street willing to vote their confidence in the commercial prospects of just such a fantasy.

Given Imaging is pioneering a new approach to minimally


This is a view from Given Imaging’s
capsule of a small intestine plagued
with the genetic condition telangiectasia.
invasive diagnostics for the health care industry with a tiny video camera stuffed inside an orally ingested pill like a ship in a bottle. As the pill makes a seven-hour journey through the small intestine, the camera snaps thousands of digital images, transmitting them by radio frequency to a sensor array worn by the patient on a belt.

All that is left for the doctor is to upload the images and keep on the lookout for lesions or other signs of disease while watching the fantastic voyage through puffy intestinal tissue on a computer screen.

On Wednesday, Given Imaging raised $60 million in an initial public offering on Nasdaq, making it the first company to dare to go public since the Sept. 11 attacks in the United States. Its Nasdaq symbol is GIVN.

Its shares were priced at $12, the low end of the range underwriters were seeking, yet by the end of the day on Thursday, its first day on the market, the stock was up 3.92 percent.

Financial analysts were closely watching the offering, despite its small size, as an indication of investor readiness to support new offerings of companies amid a difficult economic climate. In the long term, Given Imaging’s success on the markets could also provide an important barometer of Wall Street’s willingness to put its money behind microsystem technologies that have not yet proven their ability to penetrate markets.

Gavriel Meron, founder and chief executive of Given Imaging, rejected the concerns of some analysts, who wondered whether a company with a single innovative product and no profits or revenues could command support from investors over the long term.

“It’s clear to me, and I think also to the investors, that this technology is unique,” said Meron. “We are opening up a whole new market opportunity and as the company grows and achieves its targets the value of the company will increase substantially.”

But even with recent U.S. Food and Drug Administration approval, there are still plenty of challenges before it gains broad acceptance in the medical community.

For the health care industry, however, Given Imaging offers the promise that tiny technology can be used in revolutionary ways to improve diagnosis and offer an alternative to particularly unpleasant examinations.

According to Meron, the idea was originally conceived by a scientist at Rafael, an Israeli military development company, who specialized in technology for transmitting video images from missile flight. After Given Imaging was founded in 1998, it moved to develop the idea into a medical product, a “complete color video camera on a chip” just 4mm square.

“We have tiny optics and a small ASIC that is the controller and the transmitter and a little antenna and a light source in there,” he said. “And we have power,” he added triumphantly, explaining that two off-the-shelf watch batteries generates eight hours of imaging time. Compare that, he joked, to standard video camera batteries, which always seem to run out of power just when you want to start filming.

Although the technology can be further miniaturized for the purposes of gastrointestinal diagnostics, the current size is sufficiently small, Meron said. He also said there could be many additional applications to the technology — anything that uses video or imaging — but did not give any more details.

The company’s marketing strategy involves promoting as many independent scientific studies as possible to back its assertion that the video-pill represents a big improvement over standard diagnostic techniques, particularly x-ray diagnostic tools or endoscopy, a technique involving a long tube inserted through the mouth or rectum to probe a patient’s bowels.

Gastrointestinal experts who have tested the new technology say standard x-ray imaging generates poor, two-dimensional image quality, making diagnosis difficult. Endoscopy, on the other hand, is unpleasant for patients and inadequate, since the tube cannot fully navigate the hairpin curves of the small intestine.

“We didn’t really have a good technology to see the small intestine,” said Dr. Zvi Fireman, head of the gastrointestinal department at Hillel Yaffe Medical Center in Hadera, northern Israel, and an external medical adviser for Given Imaging. Fireman describes the technology as a “leap forward” for his field. “For the first time, the capsule gives us a view of what is going on inside,” he said.

There are also clinical studies to back up the efficacy of Given Imaging’s technology. A study of 56 patients conducted by two Israeli hospitals and a researcher at Mount Sinai Hospital in New York, indicates that the technology is better at diagnosing intestinal disorders. The patients had taken a total of 324 examinations using the traditional techniques, which failed to diagnose any disorder. After they tried the pill, 60 percent were diagnosed.

Furthermore, Fireman believes the high quality of the imaging could help researchers discover new types of diseases that previously went undetected.

Professor Rami Elyakim, chief of gastroenterology at Rambam Medical Center in Haifa, Israel, is also conducting tests comparing Given Imaging’s capabilities with other diagnostic techniques. It is still too early to conclude, but Elyakim says several patients have already been diagnosed after the other method failed.

“The experience is that its very easy to swallow the capsule, and the examination including hooking up the system, takes about 5 to 10 minutes,” says Eliakim. “The only preparation needed is for the patient to fast for 8-10 hours.”

Whether the medical community will embrace the technology, however, remains an open question. “They will embrace it if the price will be lower, and if it will be covered by insurance,” said Eliakim. In its prospectus to the stock market, Given Imaging promises the cost of the technology will be competitive. Eliakim said it currently costs about $900 a patient compared to about $150 per examination using the traditional methods.


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