Video phones, flat screen TVs, robot maids. This was the uncannily accurate future envisioned by the 1960’s TV show “The Jetsons.” Now another show from a bygone era in on the cusp of becoming reality: “The Six Million Dollar Man.”
In that hit series, a critically injured astronaut named Steve Austin is put back together with bionic implants—new legs, right arm and left eye—that give him superhuman strength and ability. Today, a handful of venture-backed startups are coming to market with bionic devices of their own that have the power to give sight to the blind, enable paralyzed people to walk again, and even let soldiers carry 200 pounds of military gear without breaking a sweat. But, unlike the gizmos attached to Steve Austin, these bionic devices cost considerably less than $6 million.
“The concept of bionics has been around for many years, so it seemed blindingly obvious that if a person is paralyzed they could use bionics to walk again,” says Jenny Morel, a managing director at No 8 Ventures in Wellington, New Zealand. “But nobody had really attempted to do that.”
When she was first introduced to a company called REX Bionics three years ago, Morel knew it was on to something big. REX is pioneering bionic legs that allow a wheelchair user to stand, walk and go up and down stairs. REX is not an implant. Rather, it is a battery-powered, custom-fitted device that straps around the legs and waist of users to support their weight. It also contains a small joystick and keypad for operational control. (Type “Rex Bionics” into YouTube to see the legs in action.)
When REX approached No 8 Ventures, it had an early prototype unlike anything Morel had seen before. No 8 Ventures and TechNZ invested $7.5 million in the company to develop the technology, and today REX has a completed device that is expected to be available worldwide by the middle of next year.
REX is on track to get final approval for commercial release in Europe this year, and then hopes to get approval from the Food & Drug Administration for sale in the United States sometime next year. The device will sell for about $150,000, but the company hopes to see the price fall to $100,000 in subsequent years. “We’ve been approached by lots of individuals who want to buy one,” says Morel. She says believes the addressable market for the device is 5 million people in the U.S. alone.
Of course, it is still early days for REX, which continues to face a host of challenges. Foremost is securing FDA approval and, after that, getting the device accepted into the health reimbursement system. After all, there are not many people who can afford to pay $150,000 out of pocket. Ramping up manufacturing for REX and then supporting the device on the patient end with highly qualified specialists is another big issue. The company is currently seeking a new round of up to $10 million to accomplish these goals.
Traditionally, bionics has been more of a fantasy thing, but the engineering is finally starting to catch up with the Hollywood vision.”
Still, REX has made major strides in the three short years since the VCs invested. “We did think this was pure sci-fi when we first looked at it,” confesses Morel of No 8. “But now it is very real. We didn’t invest in REX because it was a clever technology, but because it met a real market need.”
Meeting a similarly important market need are bionic eyes that return the power of sight to people blinded from a range of eye diseases. Venture-backed companies in this area include Nano Retina Inc., Second Sight Medical Products and VisionCare Ophthalmic Technologies Inc.
Second Sight, which is backed by $16 million from Versant Ventures and individual investors, has developed an implantable device that seems to be pulled from the pages of a “Star Trek” script. The device consists of a tiny camera and transmitter mounted in eyeglasses. The glasses send images to a receiver that is secured to the retina, and light signals are then transmitted to the brain via the optic nerve, recreating the image and restoring sight.
William Link, a managing partner at Versant, says the bionic eye is designed specifically for patients blinded from retinitis pigmentosa and advanced macular degeneration. Typically, these diseases impact middle-aged patients and result in a gradual loss of vision.
“We can take patients who are fully blind and give them enough vision so they can read letters and words, see the difference between light and dark, and detect motion, which is pretty amazing progress,” says Link.
There are several million people in the United States who suffer from macular degeneration and who could be eligible for a bionic eye. The Second Sight device is likely to be approved for sale in Europe this year, followed by FDA approval by the middle of next year. The procedure to implant the eye will cost somewhere between $50,000 and $100,000.
But Link is confident that insurance companies will cover a portion of that. “We have checked with insurance companies and payers, and think the price might be fine because we can reduce the cost of supporting a blind patient,” says Link. “In fact, we may be saving the system money by returning the patient to functional vision.”
We did think [REX Bionics] was pure sci-fi when we first looked at it, but now it is very real. We didn’t invest in REX because it was a clever technology, but because it met a real market need.”
Like any bionics deal, there are huge hurdles to overcome. Link freely admits that bionic investments are among the most challenging in the entire medical field. The technology is incredible complex, the surgery is very tricky and the rehabilitation for patients is very difficult. In the case of Second Sight, for instance, the brain has to relearn how to process light signals it has not received since the patient went blind.
But if a company like Second Sight gets it right, the rewards will be phenomenal. “The idea that we can take someone who has been blind for years and, after a two-hour procedure, give them functional vision is something that anyone can get excited about,” says Link.
Yet even companies with the brightest vision don’t always make it to the finish line. One example is Optobionics, which raised $33.4 million from Advanced Technology Ventures, Arch Venture Partners, Lightspeed Venture Partners and Polaris Venture Partners for its own bionic eye before going into involuntary Chapter 7 bankruptcy in 2007. Optobionics needed another $100 million in funding before investors decided to pull the plug, company founder Alan Chow recently told the Wall Street Journal. Chow has since purchased the technology and relaunched the company.
Another promising company, Touch Bionics, recently ran into a spell of trouble when it was turned down for bank loans needed to grow the company. The Scottish company, which makes a bionic hand used by soldiers wounded in Iraq and Afghanistan, is backed by Archangel Informal Investment, a leading angel syndicate in the United Kingdom. The group agreed to loan Touch the money it needed to continue development.
The Touch device, which costs about $20,000 per patient, looks and acts like a real human hand and is guided by sensors that detect muscle signals to open and close the fingers. The company sold about 500 bionic hands last year for about $10 million in revenue.
Most bionic devices replace body parts by mimicking the original function very closely. But one company is working on a device that follows in Hollywood’s footsteps by improving function, essentially giving the recipient superhuman strength.
That company is Berkeley Bionics, which is in the market to raise venture capital. Backed by a number of government agencies, including the Defense Advanced Research Projects Agency (DARPA), Berkeley Bionics is developing a battery-powered whole-body bionic suit designed to help soldiers carry 200 pounds of weapons, equipment and other combat gear as if they were a fraction of their actual weight. This diminishes the wear and tear on joints and muscles and allows soldiers to preserve their strength for battle.
We can take patients who are fully blind and give them enough vision so they can read letters and words, see the difference between light and dark, and detect motion, which is pretty amazing progress.”
Lockheed Martin has licensed the technology and introduced the Human Universal Load Carrier (HULC) at a U.S. Army symposium last year.
“With our enhancements to the HULC system, soldiers will be able to carry loads up to 200 pounds with minimal effort,” Rich Russell of Lockheed Martin said in a prepared statement. “Lockheed Martin is developing an entire line of ground soldier technologies that will improve war fighters’ ability to effectively complete their missions.”
While a whole-body bionic suit is certainly very cool, Ted Driscoll at Claremont Creek Ventures isn’t sure it’s the best venture investment. He believes bionic technology is best suited to the leg, and in particular the knee, because that is one of the weakest joints in the body and has the greatest demands placed on it.
That’s why Driscoll invested in Tibion Bionic Technologies. The Tibion device is a relatively light-weight piece of equipment that straps around the knee. It is designed primarily for stroke victims who have lost strength and need a wheelchair because they have given up trying to walk again. The Tibion leg not only restores some of the strength, but it returns what Driscoll calls the “intentionality” of walking.
“The neurological aspects of human motion that come from the brain and go to the muscles are being assisted much more effectively by the Tibion bionic knee,” explains Driscoll. “We are regenerating neural pathways that we thought were gone. We seem to be helping to rewire a part of the brain that was damaged in the stroke.”
The Tibion device sells for $36,000 and is currently being used in some of America’s largest rehab clinics, such as Whittier Rehabilitation Hospital in Massachusetts. The company plans to raise a new round of up to $10 million to fund a home release of its bionic knee.
“We see a green-field opportunity,” says Driscoll. “Traditionally, bionics has been more of a fantasy thing, but the engineering is finally starting to catch up with the Hollywood vision.”
Consider cochlear implants, which some people refer to as bionic ears. More than 180,000 people have had cochlear implant surgery, and that figure is expected to grow. That’s why Sonova Holding AG agreed to buy cochlear implant maker Advanced Bionics of Valencia, Calif., last November for $489 million. That sizable sale price confirms that the market for bionics is very real, indeed.