Intellectual Ventures’ Latest Big Push: Turning Med-Tech Inventions Into Cash

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what it has in its medical device portfolio, and when I spoke with Hawkins and Duesterhoft a couple weeks ago, they emphasized that they are still digging through this mountain of patents themselves to try to figure out what can be spun out as license deals. But they did say they are starting to make the rounds at industry meetings this month, like IN3 and AdvaMed2010.

These guys didn’t want to show me all the cards they are prepared to play when they meet with device companies, but they did talk about a few examples of technologies that they think could make a big splash in the U.S. healthcare market.

One of the big ideas is a more efficient form of medical imaging. This comes from a concept in physics known as Compton backscattering. Essentially, the inventors at Intellectual Ventures know that different tissues with different compositions will give off different fluorescent signatures. The technique could be useful for telling the difference between cancerous and healthy tissue, Hawkins says.

This kind of technology, Hawkins says, is a big reason why he was attracted to join Intellectual Ventures. No venture capitalist would start a company based on this technology, partly because there are already a bunch of CT imaging players, and it probably doesn’t offer the kind of traditional return potential VCs want to see. Back before the downturn struck in 2008, companies would get started in medical devices, figuring they might take $40 million to $70 million of invested capital, and grow into $350 million to $400 million opportunities. Even when more startups were getting started with those kind of prospects, only one out of 100 medical tech ideas Hawkins saw had that kind of financial potential. That’s why he is eager to test the out-licensing model of IV, to see if he can generate returns another way, by licensing a technology like this to a big imaging company that would pay some upfront cash, milestone payments, and royalties.

“It was challenging for me to see so many things in medical technology that could be changed for the better, but they weren’t funded because they weren’t venture-funded-startup kind of opportunities,” Hawkins says. “So what do you do with them? We couldn’t do anything before. But at IV, we can.”

Naturally, I had to press these guys for more specifics. One of the inventions Duesterhoft said he’s pursuing relates to “self-sanitizing touch screens.” Basically, this involves embedding light-emitting diodes into glass surfaces, where they can automatically kill viruses and bacteria. This could be used … Next Page »

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