A ‘Fantastic Voyage’

into Your GI Tract!


A very small Israeli company is the world leader

in ‘capsule endoscopy.” But it now faces a behemouth competitor.


By: Andrew Romano




G ASTROENTEROLOGY HAS ALWAYS BEEN HIGH ON GROSSNESS AND low on glamour, but you’d never know from visiting the Manhattan offices of Dr. James Aisenberg. On a recent evening, the lanky physician led a NEWSWEEK reporter into an exam room, lowered the lights and parked at a PC. Tonight’s feature presentation: a frill-color video of the reporter’s empretzeled innards—from gullet to gut to small intestine. Eight hours earlier, he had swallowed a bullet-size capsule—the PillCam —packed with a tiny blinking camera set to transmit two photos per second to a wearable hard drive. Now Aisenberg was pointing out a “beautiful” shot of the bile duct. “This is the sexiest technology imaginable,” he says of the device, which he’s used to detect digestive- tract ailments in more than 400 patients. “It’s ‘Fantastic Voyagc’ —and it’s changed gastroenterology as much as any single breakthrough in the past 10 years’


Until now, only Given Imaging— an Israeli start-up—could offer physicians like Aisenberg such pictures. But that’s about to change. Since coming on the market in 2001 , Given’s PillCam has routinely probed the tight, twisted tunnels of the small intestine, which traditional invasive tube-and-lens endoscopes can’t reach. Peer-reviewed studies show that, once inside that organ, a $450 PillCam is twice as effective as other diagnostic tools—including colonoscopies and push enteroseopies—at spotting disorders. (The disposable pill passes, ahem, the “natural way?’)


As a result, Given’s business has boomed, with more than 260,000 patients served worldwide (the procedure is typically covered by insurance), a surge in sales of 1,700 percent (to $87 million) over the past five years and stock prices that have more than doubled since 2002. Only one problem: Japanese optics giant Olympus will launch its own pill, the Endo-Capsule, in the United States this May.


Given’s brain trust has been under siege before . As a top engineer for the Israeli Defense Forces, founder Gavriel Iddan designed a pioneering missile with a TV camera in its tip . It wasn’t much of a leap to the PillCam. “Our military engineers have to be the best,” says Given CEO (and former JDF major) Gavriel Meron. “But these creative minds don’t want to deal with war—and that’s why guys making our missiles arc thinking about gastroenterology.”


It’s paid off. Over the past decade, Israel’s life-science industry has grown by more than 16 percent annually (to $1 billion); Israelis now hold the most medical device patents per capita in the world. “There’s a unique capacity for innovation here,” says entrepreneur Shlomo Ben-Haim, who’s launched more than 20 life- science start-ups in recent years. “Given exemplifies that mentality.” To battle Olympus, Given plans to produce PillCams tailored to the whole digestive tract. Out now: an esophageal capsule, cleared by the FDA in 2004, co-marketed by Johnson & Johnson and aimed at the 25 million Americans who suffer from chronic heartburn. A PillCam for the colon is set to follow in 2007, with a stomach-specific model in the works.


Olympus says its $730 EndoCapsule ----available since October in Europe —”is producing superior image quality.” But only 700 patients have ingested the device, which has yet to receive FDA approval. With a four-year head start, Given is confident it can outsmart its new competitor. But scores of start-ups have fallen to established players before. It remains to be seen whether Olympus can catch up —and force Given to swallow a bitter pill.



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