Philips buying Oregon neuro EEG company Electrical Geodesics for €32.9M

June 26, 2017 – 11:39 AM | By Andrea Gonzalez | No comments yet

By Stacy Lawrence, Staff Writer

Royal Philips is slated to purchase Eugene, Ore.-based start up Electrical Geodesics Inc. to add its noninvasive brain activity monitoring and interpretation technology. The deal is expected to complement Philips existing imaging technology and neurological informatics portfolio to better address disorders such as stroke, epilepsy, traumatic brain injury and Parkinson’s disease.

Philips plans to use the start up’s technology to enhance its neurological imaging, mapping and therapy guidance portfolio. EGI offers noninvasive neurodiagnostic and neuromodulation products to monitor, interpret and modulate brain activity using its dense array electroencephalography (dEEG) platform technology.

Chasing neuro

The newly acquired EGI business will operate as a subsidiary, retaining its executives and employees to form the core of a Neuro Diagnostics business at Philips. The idea is to expand into logical adjacencies to the company’s core imaging portfolio

“It fits very well into the strategy,” Business Leader of Neuro Diagnostics at Philips Joe Burnett told BioWorld MedTech in an interview. “This product is really set right in the middle of definitive diagnosis and guided therapy . . . This is very much a platform technology, and so it’s not necessarily indication-specific. There are some places where the use is more mature where it is clinically used today. But in the future it will be used in different applications.”

“Epilepsy, for example, is the place where it is most commonly used today. And the way we really think it fits in here and that we’re pretty excited about first is definitive diagnosis,” he added.

Patients with epilepsy may require two to six years of various treatments and diagnostic tests before they are even evaluated as a surgical candidate. But, Philips expects that the EGI tech could routinely be used to obviate that process – helping to identify the optimal drug treatments and surgical procedures for an individual patient.

“We believe that it’s possible with very detailed high-definition EEG, to create a multimodal tool that can very quickly get that answer for that patient much faster than those two years. It should be done in a matter of months,” said Burnett. “To be able to say, ‘not only does this patient have epilepsy, but there’s two specific focal points and those focal points happen to be in regions of the brain that are surgical options.’ So, you actually start to understand what is possible for that patient.”

He expects the EGI technology could also be useful in determining which of various epilepsy drugs could prove most useful for that patient, enabling the tool to be used to guide both surgical and drug treatment for a specific individual.

Beyond research

EGI offers noninvasive neurodiagnostic and neuromodulation products to monitor, interpret and modulate brain activity using its dEEG platform technology. It uses up to 256 sensors, providing much higher resolution brain activity data than traditional 8, 16 or 20 channel EEG that is used routinely for the diagnosis and monitoring of epilepsy, neurosurgical planning, and sleep assessment.

Established EEG technology is used across medical, clinical and research settings, but EGI’s more sensitive technology is used largely in neuroscience research laboratories. Philips will focus first on marketing the EGI technology to its customers, alongside integrating it into the business.

“We’ve got a kind of a commercial machine that we want to be able to take this technology and tap into, especially when it comes to changing behaviors and changing kind of the standard of care,” said Burnett.

EGI has two sets of product lines, GES 300 and GES 400 lines, which are both based on its Hydrocel Geodesic Sensor Net that allows fast and easy placement of the many EEG sensors it employs. Its products are compatible with multiple diagnostic and imaging technologies such as magnetic resonance (MR) imaging, functional MRI (fMRI), and magneto-encephalography (MEG).

EGI’s dense EEG tech is FDA-cleared as a clinically based routine EEG system. The technology can be expanded in a number of ways, including into actual treatment and via more complex analysis using machine learning. Both of those are of interest to Philips in the longer term.

Neuromodulation, AI up next?

Beyond that, the company is also in the midst of a neuromodulation pilot epilepsy study; it combines the advanced EEG monitoring with precisely targeted electrical currents via its Geodesic Transcranial Electrical Neuromodulation (GTEN) device that is in development

“Based on if the results of the pilot are positive and show not just meaningful results to the patients, but also the information we need to statistically design that next study, then absolutely it’s something we would want to continue,” said Burnett. “Most of the noninvasive stimulation tools that are approved today and used clinically are not for epilepsy, they’re primarily used for depression. That’s something we’re very interesting to us in the future as well.”

Machine learning could help to enable far easier monitoring of the high-volume data stream. “Instead of having to look for seizure activity across these 256 different channels, you could be able to touch a button and have a computer automatically locate where the seizure is taking place,” said Burnett noting that there might be a 24-hour recording of each of these individual channels that would need otherwise need to be reviewed closely.

Philips already has extensive machine learning and artificial intelligence efforts that could be applied to analytics for the EGI tech.

Filling out Philips

Amsterdam-based conglomerate Philips is in the midst of a years-long process that started in 2014 to focus entirely upon health technology, divesting itself of unrelated businesses while establishing and filling out med-tech product lines, often via partnerships and acquisitions.

The cash price for EGI, which is listed on the AIM, a market of the London Stock Exchange, is about €32.9 million (US$36.8 million). Microcap life science companies that are listed on the AIM typically have a difficult time raising sufficient capital.

The price per share for the acquisition is 105.4 pence, a 36 percent premium to the June 21 closing price. The acquisition is slated to close in the third quarter. The 25-year-old EGI had $14.3 million in sales last year and employs about 90 people.

Already this year, Philips acquired Respiratory Technologies Inc. for an undisclosed amount for its airway clearance solution for chronic respiratory patients such as those with chronic obstructive pulmonary disease and cystic fibrosis. It also bought at-home sleep testing service Australian Pharmacy Sleep Services.

In addition, Philips has done a series of health technology partnerships in 2017, including one with artificial intelligence startup PathAI to improve the precision and accuracy of pathology as used for diagnostics in cancer and other diseases; another with Illumina Inc. to integrate genomic data into Philips’ clinical informatics program in oncology; and one with B. Braun Melsungen AG to use image-guided solutions to make regional anesthesia and vascular access procedures easier.

Burnett joined Philips via the 2015 acquisition of image-guided cardiac therapy company Volcano Corp. His ambition is to redefine neurological diagnostics and treatments, growing the business along similar lines to his Volcano experience.

“I came from Volcano where we kind of grow a small business of you know $10 or $15 million or so into almost $400 million in that particular space. And I’d love to do something like that again,” he summed up.

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