Biomedical technology and Silicon Valley

On Thursday, Jan 31st, I attended a seminar on Biomedical Technology hosted by Silicon Valley Technical Institute. The instructor was Dr. Sudhi Gautam, an ex-ENT surgeon with a PhD in Engineering from the Indian Institute of Technology. For a layman in biomedical technology like me, it was an eye-opener. Overall, a most excellent introduction to biomedical technology.

To begin with, I did not know the difference between biotechnology and biomedical engineering (not to be confused with bioengineering). It turns out that biotechnology is best defined as the technology concerned with manipulation of living cells and is most related to biology. Biomedical engineering is at the convergence of technology, medicine and biology and is focused on developing medical devices and systems. Bioengineering is concerned with modification animal and plant cells by manipulating their genetic and cellular properties. So similar sounding names, with very different meanings. Furthermore, the regulatory approval process in the United States is dramatically different for biotechnology compared to biomedical devices.

Biomedical devices are classified based on their level of risk application and impact, and in the low risk devices can be approved anywhere from 90 days to 3 years. Biotechnology applications, especially where they have therapeutic applications go through the same cycle of approvals and clinical trial as pharmaceutical drugs and can generally take anywhere from 4 to 7 years or more to get approved. Some of the higher risk biomedical devices like pacemakers and robotic surgery machines like those from Intuitive Surgical can also take as long to be approved by the US regulatory bodies.

Where it gets very interesting is in that biomedical engineering, because of its intersection between engineering and medicine, has a great deal of relevance to Silicon Valley. Even with all the advances in medicine today, the gap between medicine and technology outside of medicine is huge. This makes the health care system very inefficient. This triggers the opportunity, which is so characteristic of others, which Silicon Valley exploits best, with its mix of capital, technology and entrepreneurship. California has close to 2600 biomedical companies, with over 700 in the Bay Area alone. Silicon Valley appears to be the biggest hub for biomedical technology, followed by Orange County, Minneapolis and the Northeastern US. Many of the Bay Area companies are spinoffs from Stanford, UC Berkeley and UCSF. The estimate is that 50% of the world’s biotech and biomedical companies are in the US and a very high percentage of them are in California. US biomedical devices are valued worldwide due to the rigorous approval process and quality requirements they are subjected to. These devices require a significant amount of engineering design and and in many cases have significant semiconductor content. Where the devices are endorsed by Medicare or the insurance companies for use by their patients, the volume can also be considerable at pretty good margins.

The latest biomedical device company in the news is Intuitive Surgical (mentioned earlier) of Sunnyvale, CA. They make the robotic surgery machines, called the da Vinci surgical system. These are approved only for three or four types of surgical procedures in the US (they are seeking approval for more types of procedures), but are still in hot demand in India and other countries. The latest rumor is that their machines have been approved for hysterectomies by the US regulatory bodies. This may account for the fact that their stock (ISRG) surged over 17% on Friday, February 2nd alone and is up close to 50% in less than a month.

So, following semiconductors, computers, the Internet, the iPod and iPhone, we have a lineup of alternative energy, biotech and biomedical products to supply the world. These are exciting times indeed for Silicon Valley.