TLV Insider recently had the privilege of sitting down with Homi Shamir, the Company’s CEO and President, at the Company’s corporate headquarters in Yoqneam, Israel:

Describe the revolution in gastrointestinal diagnosis that Given Imaging is spearheading from the perspectives of both the patient and the physician. How does it change the equation in terms of transforming the physical and psychological experience of testing? How does it impact the gathering of data and the ability to reach more conclusive results?

Given Imaging is the first diagnostic solution in the market to unravel the mysteries of the small intestine – all 22 feet of it. Until our arrival on the scene, this coiled intestinal area, located below the stomach, was exceptionally difficult to navigate. Let’s look at the options. Coming up through the colon enables physicians to visualize at best seven feet of the lower end of the small intestine and entails a procedure that is highly uncomfortable for the patient. Approaching the area orally through an endoscopy is even more extreme, requiring that the patient be fully sedated and likewise promises only partial views of the upper third of the small intestine. From a medical perspective, this translates into difficult procedures that yield only partial results. As far as patients are concerned, they need to submit themselves to great discomfort and the prospect of not necessarily discovering polyps or other abnormalities that may be present and demand further medical attention.

Given Imaging has enabled a total transformation of small intestine diagnostics. Suddenly, patients can approach the ominous premise of a gastrointestinal test in a procedure that is as simple as taking a vitamin pill. Swallowing one of our PillCams requires no prep or change in routine. As the pill travels naturally through the digestive track, some 50,000 high quality images spanning the entire length of the small intestine are captured and transmitted – at absolutely no discomfort to the patient who continues to go about her/his daily routine. The impact here is therefore of a total win/win nature; physicians have gained a breakthrough diagnostic tool that significantly increases the chances of arriving at a conclusive diagnosis. Patients are relieved of all of the discomforts of traditional methods and can look forward to a trouble-free procedure that yields accurate results – which also means they will be more likely to submit to testing in the first place.

Non-invasive procedures like a capsule endoscopy are very patient-friendly. Where do you see the future of ingestible diagnostic tools going in terms of future applications and the potential longterm impact of the technology and procedure on the medical establishment in different parts of the world?

Our colon screening pill, an alternative to standard colonoscopies, is currently in its second generation of development. It reflects a growing trend in the medical establishment of smart screening – in other words, let’s invest in sophisticated preventive medicine and then not need to worry about extravagant expenditures on treatment and patient care. Colon cancer is one of the more common forms of the disease prevalent in society today. It is also one of the more eminently curable – a 90% success rate – if discovery is made early on. And yet, in the US, 55,000 will die from the disease in any given year with the fatality count exceeding 200,000 per annum in Europe. Why? Simply put, people refuse to submit to colonoscopies because of the discomfort and the nature of the procedure. We see our non-invasive colon screening procedure as ushering in a new era of testing. The very nature of the PillCam examination should potentially attract masses of people that would never have considered the traditional route. It transforms the whole experience into something far more routine and less off-putting.

On other fronts, our current PillCam technology is passive; you swallow it, and it transmits its images as it journeys naturally through your digestive track. But what if we could control the pace and direction of its movement? The premise of developing a PillCam with active electronics is definitely on the horizon. If a polyp is detected, we can “instruct” the camera to continue its image capture of the area, and even zoom in to the cellular level and perform a virtual biopsy which could determine its nature.

Given Imaging has also diversified through our recent purchase of Medtronic’s Bravo® pH monitoring business for the diagnosis of Gastroesophageal Reflux Disease (GERD). We believe that the Bravo pH monitoring system, with a wireless capsule that is a more patient-friendly test for GERD, is a synergistic and strategic fit with our innovative PillCam platform of GI diagnostic tools. Adding the Bravo system to our portfolio of capsule endoscopy products will strengthen our relationship with GI customers, sharpen our competitive edge and enhance shareholder value.

How prepared is Given Imaging to retain its leadership role in the field? Who are your primary competitors and what disruptive technologies do you have to worry about that may be looming on the horizon?

We’ve been around now for a decade. We created this space, developed a very robust portfolio of well protected IP and built a strong network across the delivery chain in all key strategic markets. We currently command somewhere between 95-97% of the market, which is hard to duplicate. Competition is healthy for every industry; it keeps you fresh, innovative and hungry. So we definitely welcome it, but right now we are far and beyond the most significant player and dictate the development of the entire field.

PillCam SB transmits images at a rate of two images per second for approximately eight hours, resulting in more than 50,000 images. This already seems like something out of a science fiction novel to most people. What do you do for an R&D encore following a performance like this?

One of the challenges we needed to address in the development of PillCam Colon II – our colon screening solution – is the nature of waste movement in the large intestine. As we all know, it can be slow going at times, and at other times extremely swift. That means that the camera has to be able to compensate for extremely fast discharge and still provide high quality images in abundant quantities. To that end, we’ve developed a product that I think will surprise everyone with its high frame rate. It’s due for release in Europe in November so we’ll be able to judge its performance soon enough.

Do you foresee ingestible diagnostics ultimately replacing chemical based testing procedures? Will it help to render exploratory surgery unnecessary in many cases?

There will always be reasons to keep using conventional methods, but as we have exceeded 1,000,000 patients who have now benefited from the PillCam platform, it has become obvious our technology has totally changed the paradigm for testing the small bowel. We hope to achieve results that are as accurate in the colon screening space and begin to command a large share of this market as well.

Why is Given Imaging an attractive target for investors?

Given Imaging has an annual growth rate of 13-18% and it hasn’t dropped off, even in these hard times. We enjoy positive cash flow and currently have some $75 million in the bank. 90% of our revenue base is from capsule sales, as we already have a very large install base of our monitoring hardware. And we still have the potential of penetrating many attractive markets in our core small intestine business who haven’t yet embraced the technology. Add to that the tremendous promise we see in the global colon screening market and our newly acquired Bravo pH monitoring system and you have a very robust and diversified company with a clear roadmap to the future.

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