Tiny Steps, Giant Bounds

Michigan nanotechnology companies are hard at work developing some potentially revolutionary new medical products they hope will soon hit the marketplace

By Candace Stuart

(page 1 of 2)

Photograph Courtesy of istockphoto.com

Metro Detroit might still be stuck in the industrial age, but the region has the potential to leapfrog the information age that blossomed along the coasts — think Silicon Valley in California, Route 128 in Boston, and the Research Triangle in North Carolina — into the nano age. Based on a relatively new science, nano, or nanotechnology, utilizes and manipulates materials smaller than cells to create new products and processes.

Already, nanoscale materials have been integrated into medical devices and drugs that treat diseases more rapidly than conventional treatments. Other uses include cleaner and less-expensive energy, inexpensive water filters, sensors that detect harmful chemicals, and more efficient batteries and fuel cells for power tools and vehicles. Indeed, in 2010, General Motors Corp. and its suppliers plan to introduce the revolutionary Chevrolet Volt, a nifty coupe that runs on batteries that utilize nanoscale materials.

Southeast Michigan has a number of scientists, researchers, and engineers working in the nano field. Consider NanoBio Corp., of Ann Arbor. Clinical trials on the company’s nano-related treatments for various infections and diseases have proved to be well-tolerated by patients, with few of the side-effects associated with some drugs on the market. The nano drugs have proved fast and effective at killing the bacterial, viral, and fungal culprits behind a number of common infections, with little risk of the resistance that occurs with antibiotics. The results are so promising that NanoBio’s investors say they will support larger-scale testing to determine if the emulsions help patients enough to win approval from the U.S. Food and Drug Administration.

“It’s a pretty sure bet that it will be on the market one day,” says David Peralta, COO of NanoBio, referring to the company’s most advanced product, a topical salve for herpes simplex, the virus that causes cold sores.

NanoBio, founded in 2000 by U-M immunologist and inventor James Baker, is developing nanoemulsion-based therapies and vaccines for a variety of infections and diseases. Its emulsions are specially treated nanoscale oil and water droplets that can penetrate through pores or hair shafts on the skin to reach pathogens that cause conditions such as cold sores, genital herpes, shingles, and nail fungi. The droplets, which range in size of 150 to 400 nanometers, are engineered to hold a high degree of surface energy. When the droplets come in contact with lipid-containing organisms such as nail fungi, their high-energy surface tugs at the organism’s outer membrane, forcing it to fuse with the droplet and — well, spill its guts. It works on spores, as well as on fungi, viruses, and bacteria, as long as they have the vulnerable lipid component. While the droplets are small enough to seep into pores, they’re too large to traverse sub-dermal channels into blood or tissue.

“It’s a platform technology that’s innovative and seems to be effective,” says Norman Selby, senior managing director with private-equity firm Perseus LLC. Based in Washington, D.C., Perseus committed $30 million to NanoBio in 2006 to fund clinical trials for the cold sore and nail fungus lotions, as well as animal studies on vaccines using nanoemulsions that are administered as a nasal spray. “This is a low-risk, very simple technology,” he says. “It’s very novel but also very simple.”

In March, NanoBio announced that it received its third tranche of $10 million from Perseus after preliminary analyses of trials involving hundreds of patients validated that nanoemulsions were safe and effective. The company, which through its executive chairman and chief scientific officer, Baker, still has ties to U-M, expects to release complete reports on its progress after the results go through peer review and publication. In general, Peralta says the lotions healed infections faster than competitors’ products, and since they’re lotions rather than pills, they had none of the side-effects, such as liver toxicity or adverse interactions with other drugs.

The company, which had raised $31 million in federal, state, and angel funding prior to closing the 2006 deal with Perseus, expects to finalize its Round B in 2008. Selby says the deep-pocketed Perseus is likely to be the sole investor. The funding will allow NanoBio to progress to large-scale, final-phase trials on its cold-sore treatment in the first half of 2009, and on its nail fungi treatment near the end of 2009. If the lotions meet federal standards, NanoBio could have an over-the-counter product out by 2011 in a nearly $1-billion market for cold sore and nail fungi treatments, Peralta says.

Robert Berry is equally confident in the future of another Michigan-based nano company, Dendritic Nanotechnologies. Based in Mount Pleasant, Dendritic successfully used a hush-hush project for the Department of Defense to work out kinks in the chemistry of dendrimers, a nanomaterial discovered in Michigan about three decades ago. The end-result is a strong patent portfolio covering additives that the company can market to industries as diverse as cosmetics and water remediation. Currently, the company is negotiating with potential customers on a handful of agreements that would require its material, says Berry, president of Dendritic. “We expect aggressive growth this fiscal year.”

Neither NanoBio nor Dendritic are overnight successes, though. By working in the nano world, they chose novelty over knowledge, eschewing well-trampled technical terra firma for what is still an unfolding field in science. Nanotechnology is not a single technology, but rather technologies at a very tiny scale — much smaller than what is visible to the eye. A nanometer is a billionth of a meter, or about seven hydrogen atoms placed in a row. Below about 100 nanometers, matter starts behaving in new and sometimes strange ways. Companies that manage to navigate nano’s scientific Twilight Zone — often a technically challenging, time-consuming, and capital-intensive endeavor — can potentially cash in with powerful new products that promise to outperform today’s market leaders.

“I’ve always felt that a real competitive advantage is gained by doing something that’s hard to do and is not easily repeated,” Peralta says. “What we’re doing is very novel in a world where novel drugs aren’t as frequent as they once were.”

Nanotechnology gained prominence in 2000 when the Clinton administration created the National Nanotechnology Initiative, a nearly half-billion dollar program to promote nanotech research. President Bush furthered the cause in 2004 with the signing of the 21st Century Nanotechnology Research and Development Act, which authorized Congress to provide more than $3 billion over a four-year period for nanotechnology efforts. The Bush administration earmarked $1.5 billion for the Initiative for fiscal year 2009.