Superstar Inventor Segues Into Health Care

• ByCarmen Nobel,
• On 1:00 am EDT, Thursday September 24, 2009

BOSTON (TheStreet) -- An entrepreneur has a few choices when setting out to create a successful business. There's the road to going public, the road to getting bought, and there's the inventor's rotary -- creating a loop of innovation and finance. Superstar inventor Dean Kamen is a poster boy for the third track, having partnered with corporations to bankroll potential medical miracles.

"I internally develop stuff," says Kamen, founder of DEKA Research and Development Corp. in Manchester, N.H., "and then we sell it to Baxter Healthcare or Johnson & Johnson. That's why God invented large companies."

For better or worse, Kamen is best known for the Segway, the low-emission gyroscopic two-wheeled electric vehicle that received more buzz than the Apple iPhone before its 2001 release, but which ended up largely relegated to use by mall cops and tourists. But as a founder of DEKA, which has been around since 1982, he holds more than 440 U.S. and foreign patents, many of which are for novel medical devices. (He holds a spot in the National Inventors Hall of Fame, along with the likes of Thomas Edison and Eli Whitney.)

Baxter Healthcare licensed DEKA's HomeChoice PD, a peritoneal dialysis system that lets patients receive treatment at home instead of in the hospital.

iBot, an ultra-stable wheelchair that climbs stairs -- and the predecessor to the Segway -- was built for and licensed to Johnson & Johnson's Independence Technology unit, although the company stopped selling it earlier this year due to slow sales. (With a price of up to $25,000, insurance companies weren't exactly champing at the bit to pay for it.)

Johnson & Johnson also financed development of an intravascular stent, which, Kamen says, was designed by DEKA engineers with an aerospace background. "It's frustrating to spend your life building products you hope nobody has to use," Kamen said recently to an audience of young entrepreneurs at a Boston conference sponsored by the Center for Excellence in Education, by way of explaining how the iBot gave birth to the Segway, which, for a change, was developed with well people in mind.

DEKA developed the ThinPrep PAP Test for Cytyc Corp. Cytyc later merged with Hologic. (That deal resulted in a royalty dispute, which DEKA eventually won, but it illustrates that hammering out the terms of a licensing agreement is one of the more obvious headaches for inventors.)

DARPArecently commissioned DEKA to create a complex artificial arm for soldiers returning from the Iraq War. The Luke (as in Skywalker) Arm, still in trials, is sophisticated enough that patients who have tested it have been able to pick up a grape without breaking it and eat a bowl of shredded wheat and milk without spilling it.

Of course, genius doesn't always equal finance. One of DEKA's most promising inventions -- a staggeringly simple water-purification system designed for developing countries -- seems to be a tough sell. Dubbed "Slingshot," the system can create clear, potable water out of virtually any liquid, and it has the potential to reduce waterborne diseases dramatically. It takes advantage of the Stirling Engine, an invention that dates back to the early 1800s but has been receiving renewed interest lately because it can utilize multiple fuel sources, including renewable resources like solar heat. DEKA has proven the water system's effectiveness in field trials, but so far no major company or foundation has come forward to finance it, even though water is a hot commodity.

In the meantime, there may be new life for Segway. General Motors in April announced a partnership with Segway to develop a two-seat, two-wheeled urban electric vehicle dubbed the Personal Urban Mobility and Accessibility vehicle. PUMA is tentatively due for production in 2012.

-- Reported by Carmen Nobel in Boston.

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