>> and that is what someone would swallow? >> this little dot is to become manufactured with a medicine, for example, so that when you swallow it, it turns on. it is a very interesting piece of technology. there is no battery, no radio, no antenna. if you ever thought about how you might pass something inside the body, for example, i do not know if you have ever heard of anything called a potato battery. that is where you put a little bit of copper, magnesium inside a potato and then you can like it up. in this case, we have a little bit of copper, a little bit of magnesium, both essential battery elements. we have about 7 micrograms of copper. and you need about 1,500 milligrams of copper per day, in your diet. and then a tiny bit of magnesium. when you swallow this device, you become the potato. it is powered by you. and it sends a unique identifier through your body that can only be protected -- and detected by the thing that is on your body, the patch. the pill will say, hello, i am here. i am novartis. and i am 5 milligrams. i am-no. 12 and tell no. 2. that is the data that we collect. >> how you get that into this? >> it is a digital platform. essentially, the way it works is when you swallow it and turn it on, it will send a signal. we program it so that on is one hand off is zero. you have a 64-bit string. that is the data stream. >> where did you come up with this idea? >> we are very lucky company. we have a team of incredibly smart scientist and the development engineers to work with us. probably the most important is our chief technology officer. he is one of the first people in the field. we have a team led by mark and others now who have built this technology. it has been custom designed to solve what we think is one of the most important problems in this area, which is how to solve the problem with the massive qana issue of chronic disease. >> and how do you solve this? >> moving away from technology and what i call the problem statement that we started with 10 years ago as a company, we do not have a health care system. we have a sick care system. if you get very sick and you go to the hospital, they will fix you. but if you have a chronic disease and you live your life in the community, you are on your own purdum much. we need to build a health-care system that is about -- today, it is all about aging and affluence and diabetes and health care. for the future, it must connect to the internet. mobile internet is the most important technology on the planet. and it has to serve the largest group of health-care workers in the world. and that is not doctors and nurses. they are outnumbered 10 to one by informal family caregivers. that is, you and the caring for kids, our parents, our brothers and sisters. that is a group that has to address, consumers. and number three, number one engagement transaction for consumers that they do every day, that they think and they believe and they know will keep them well is to swallow their daily pill. if you think about these massive transitions that have occurred in financial services, retail, commerce, the key is to find a transaction that consumers already engaged in that that is something they want or need to do. just like in financial services, they digitize banking by having people pay their bills and trade their stocks on line. we have digitized health care by having people swallow their medicine and see the data show up. >> how does the patchwork? >> i am wearing one right here. it is about two and half inches by about an inch and a half. it looks like a band-aid. we have some very nice custom electronics inside it and i give you medical-grade data that looks and feels like a consumer product. >> is a disposable? gregg's yes, it is designed to be worn for about a week. it is fully waterproof. you can shower in it. it is designed to fit within your daily life. we built a team at proteus that was very conscious of building a desire by product. we do not just focus on it being aware of all, but it being wanted. >> what does proteus mean? gregg's it is a greek god. it also happens to be the name of the character in a movie called "the incredible voyage. >> what is your background? >> i grew up in england. i came to silicon valley. i went to business school. i started to come -- become involved withal entrepreneur activities. i have been an entrepreneur for 22 years. >> why the focus on health care? what is your personal interest? >> i am a purpose driven cuban been. i want to be doing something that can have -- a purpose driven human being. i want in seven and have a real impact. -- i want to be doing something that can have a real impact. i want the company to focus on the biggest social impact we can bring to solving this huge problem, which is changing the way in which many more people can get access to health care. what i say in our company and in our vision statement, it builds on something that was set in 1948 by the founder of the national health care. he said, we want health care for everybody. i want something a little bit more ambitious. i want health care for everyone, everywhere. the reason we can do that is because everyone will have a smart phone. >> you became a venture capitalist at some point, correct? >> ees. >> are there any companies or products that you invested in early that are on the market that we might be familiar with? >> yes, one of the first i helped to start was a company that was acquired by medtronic, which is the largest medical device company. this company designed minimally invasive open heart surgery techniques. if you had arhythmia treatment, about as likely done with a product developed by medtronic. >> what is the regulatory path like for a product like this? >> that is a great question. it's one of the things i want to take this opportunity to say how could -- how wonderfully collaborative the usda and the at -- want health care for everyone, dna are. it has been approved by both. it has been tested for thousands of days and hundreds of people. it has an incredibly wonderful safety profile. it is very accurate. if you swallow the digital medicine, it will be detected 99% of the time down to the individual pill with 100% accuracy. >> where is this manufactured? >> we had a manufacturing plant in california. it is fully built. we are in the process of writing automation to the facility. the goal is to make billions of these products in that facility. >> billions in that one facility? >> yes. >> and when do you plan on doing that? you said it is almost ready for market. what would this cost someone? >> that is an interesting question and one that i will dance around. >> you are not going to answer. >> the answer is, cost is what it cost me to make. how will line -- will i sell that to someone? it depends on the business model that you deploy. i will give you a general for any idea, which is that many people and the pharmaceuticals are very expensive products. and in some cases they are. however they only represent a 10% of the total spent on health care. the real opportunity is not to spend more less on pharmaceuticals, but to have them do your job -- and do their job, which is to keep you out of the hospital. the pricing models have to be built around our ability to save the system money. >> it do you need medicare or medicaid approval for this product to make it really successful? >> no, it is not the job of medicare or medicaid to approve things. it is their job to pay for things. and we have clearances that enable us to go to market. it is our job to build evidence, particularly economic evidence that suggests the use of these products and services really makes sense. i will emphasize here that the benefits you get for providing patients and families with digital health feedback go very deep. i will get into a user case. imagine you have a son who is 20 years all two have bipolar disease. if that were the case and he are going to college, you would worry. you would know that he needs to be on his anti psychotic every day. and you probably know that you have to be careful about his sleep patterns. if he is up all night, that causes mania. if he is leading all day, that causes depression. and you would want to know if he is talking to his friends. you can measure the by looking at his own. if you have an application on your computer that enables you to see, my son is taking his drug, sleeping ok, and he is socializing, you will be a happy guy. that is nice, but for your son, that is even nicer. it gives him back his relationship with his dad and you can stopping the drug police. when we do the debrief with patients and their families who are experiencing our products, you get strong emotional responses. an old lady who has heart failure will say, this makes me feel safe. and if your a patient at what otherwise have to go to the clinic so someone can watch you take your pills, this could give you dignity. there is an emotional response for people who can take control of their own dedication and it enables them to do the job for which they are designed. this is empowered by you, literally and figuratively, as opposed to being powered by them. >> andrew thompson of proteus digital, when you think about the growth in health care of terminology, what are your general thoughts? >> one of the most important questions that we can loan -- learn is the definition of the word innovation. what we see at a show like this is innovation being delivered soda products get better, cheaper, and more plentiful every year. -- so that products get better, cheaper, and more plentiful every year. when things are more expensive and less available every year, that cannot happen. we have to embrace the idea that the purpose of and in which -- of innovation is to make things better, cheaper, and more available for everybody everywhere and not just for rich people. >> one of the conversations that we have been having the last couple of years in washington is about to electronic medical records and privacy issues. what are your thoughts? >> that is a good point. it is a very bad place to start in terms of thinking about the digital journey in health care. you'll notice that there are two big companies that tried to do that, microsoft and google, who have not necessarily managed to get a lot of traction. the problem is not that it is not a good idea, but let's use an analogy and go back to financial services. i do not think we would have been successful in changing consumer behavior around financial services because of digitizing bank statements. people do not look at their bank statements every day. most people do not look at it ever. you have to engage people with transactions they do every day. at that point, once you turn that digital hand, you can go a lot places. the electronic health records will come, but they are not a hinge. they are in that space and will emerge once we have figured out the reasons why people will shift their behavior. by the way, this is a very major trend. it is a shift from the 20th to the 21st century. the 20th century, everything was about building people and products. you go to a bookstore and you'll see a prop and you buy a book. in the 21st century, it is about software, services, and mobile platforms. you go to your tablet, fiddle with a piece of software, and you download content. there is no building, no product. it creates a radical shift in availability, price, productivity -- all really good things. those are the things we need in health care. we know it is going to happen. it is on the question of when and what the important engagement transactions will be to cause the ship to occur. >> have you addressed privacy concerns when it comes to this? >> privacy is a very big issue. it will be an issue for us for a very long time. but the way we say -- frame is to say that many people thought that privacy would be a big issue in financial services. i wonder how many people watching this show use a credit card. many people thought it would be a big issue when in came to certain types of activities on the internet. how many people on this show use googled? privacy is a very big issue, but what we have learned about privacy is that if you provides sufficient benefits, many people will be willing to take certain risks. you have to be very careful as a company about managing and mitigating those risks. but you know that can be done. >> this type of digital pills, as you say, would you sell it to the drug companies to insert in their medication? how does it work? >> we do not have a product that is a digital pill. what we have is the world's first, and so far only company in justin centre that enables a platform data -- that is called a digital health center. the one way to the about this is to say of digital pills, as you to abel is a drug to, a song -- a song to apple is a drug to proteus. apple took songs and made them much more affordable, much more customizable. drugs are nice and are part of the 20th century as a product. in the 21st century, these things that you swallow will create data and those will have analytics and those analytics will drive services. that is what will drive product. it is transformational. we are delighted to work with them -- pharmaceutical companies, but the whole idea is to build a very different category in the health-care industry, which is about digital health feedback, the combinations of medicines you used to stay well with your measured behavior's and the feedback i can be turned into actual information, gain, and motivation to keep you well and get better. >> andrew thompson, are there other products coming from proteus? >> this is a big platform purdum >> how long have you been working on this sensor? >> if you look at it from the time it took to get through fda clearance, something like eight years. >> another product coming out? >> we have a very extensive platform. and the platform itself has been turned into a series of products. there are products for older folks living at home. that is coming very soon to the market in europe, and then the u.s. we are working on platforms in mental health, transplant therapy. there are a series of initiatives that will take the technology and build it into specific therapeutic categories. >> andrew thompson is the president, ceo, and co-founder of proteus digital health. he has been our guest on the communicator's here in las vegas. and ces international is held every year here in las vegas. it is one of the largest in the world. about 100,000 people attend every year. it is focused on technology. the communicators is looking at new technology. here is some more of our programming. now joining us on "the communicators" is ron andrews, president of a group called a medical -- of a medical group called life technology. what is your group? >> we have done everything from cell biology to genomics. as a supplier to the research community, they have had a great prowess and a great run at helping these researchers do some great things with diseases and agriculture cure my job with medical sciences is to take the portfolio and abrogate it and focus it toward some of the worst diseases, like cancer, inherited diseases, neurological disorders like parkinson's, etc. we start with the patient and look back at the value chain and understand all of the components of a a a a person -- of a person or a player in the value chain and understand what they need to give them a better outcome. when that patient walks in and meets with their physician, that moment when they find out they have cancer, all kinds of emotions and questions flow through their mind. our job is to make sure that we use alhart technology, are testing technology to map these technologies -- all our technology, all our testing technology the much about these cancers and diseases. we work with an ipad right there with a patient and coax them -- coach them through that cancer and the treatment that we would use and give them the knowledge to help them be real about their disease, but also hope. most of the cancers we see today are treatable. and clearly, cancer is becoming a more and more chronic disease. >> you refer to yourself as a supplier of research. what is that? >> we make chemicals that get used by researchers. for instance, with cancer, a pharmaceutical company would be looking for economic signature, a genetic signature of the patient. we supply them with the instruments and the technology to do their research and discovery. with that comes a great responsibility as a corporation to be on the cutting edge of technology. last year at the show, i was a great opportunity to introduce a game changing product. it is a gene chip that will allow us to map the genome. for us, it allows us to take a disease like cancer and pull those cancer cells out into a folger gnomic map of it and it tells us how the cancer is being created in the cell. >> what are looking at? >> it is a meckler chip. it is normal technology that has been configured to create wells. on this are millions of wells. in those wells are little beads. inside those beads we have the attached antibodies that connect to the specific pieces of the dna code. when it connects, it reports -- and aijalon comes out and this electrical current comes out -- an ion comes out and its electrical current comes out and allows us to map it. >> where does this take place? >> it is a desktop box. you open it up and put this in and the reaction takes place. all of the chemistry is right here on this ship. the instrument reads this chip and reads the report and put that into a sophisticated computer, which has very sophisticated software to make it into some information that mean something to the doctor. >> where are those manufactured? >> some of the largest chip manufacturers around the world in asia. we bring the chip itself here and the final outcome -- chemistry component is manufactured here in the u.s. at life technology. >> where are you headquartered? >> in carlsbad, calif.. but we have facilities all over the world. we are a public company. life on nasdaq. >> ron andrews, being here at ces, b there seems to be growth in health technologies. what is the future for health technologies? >> we have had all of these incremental amazing changes in the past five years. now we are poised to really make some great leaps in these complex diseases. our understanding of cancer, for instance, in the last five years has dwarfed the last 25. and in the next 10 years, will take us into some amazing advances, like the ability to take a tumor biopsy and using these digital chips, identify its unique signature. and then in the blood we will be able to monitor the signature. when we treat the cancer, we will be able to come back and look for significant changes in the blood. a patient comes back after treatment a year later for a pakistan -- a pet span, we will be able to catch things and minds for them before they occur. we can stop the cancer before it stops -- we can stop the cancer before it starts again. >> previously here las vegas you were quoted as saying that we are making progress to ultimately make the google map of the cell. what does that mean? >> imagine the l.a. highway. imagine a blueprint been developed at a downtown los angeles architectural firm and then being out in beautiful laguna beach. and a courier can hit the 405, the 33, the 401. the blueprint has to get to the manufacturing to get the cancer protein is made. the goal mouth of the cell is being able to look -- the google map of the cell is being able to look at the cell and put that out on top of the cell. the dna is where the cancer is. the rna follows protein highway systems to get through the cell to the area that makes the bad proteins. when technology comes together, we can begin to understand that it is difficult to change the blueprint. but what we can do is my mentor these pathways, these highway systems. -- we can monitor these pathways, these highway systems. we in diagnostics can present the goal mouth of the cell to you, the doctor, and you can give a drug to stop the careers progress. so it never creates a robins on that creates a bad cancer protein. -- creates a ribosome that creates a bad cancer protein. that is what we are working on, to look at a map of the cell and then offer a drug that shuts down the communication no bad proteins will be produced. >> what is it like as far as regulation of your product? >> the research market is an opportunity for us to get in with academic researchers and these amazing-in these human genome project that are focused on these diseases. we are able to supply them with a research only to will and they are able to use it to make discoveries. once the discovery is made, my technology takes that discovery and takes it through the fda progress. we will launch it into a clinic or hospital as a regulated product. >> how long can i take? >> the regulatory agencies have gotten better about this. as you know, cancer, people do not live that long if we do not give them these great discoveries. the agency has been very open about understanding that we do not have a lot of time. you are looking at a year to two years for us to develop the clinical trial data that we need to submit, and then another year for the fda to review it and get it released. it is not an obnoxious amount of time for approval. but we do need a transitional medicine regulations that allow us to make -- take research discovery faster through the clinic for cancer. the stage one and stage two cancer, we can get those through pretty well. the stage for, it is almost a hail mary and we are trying to do something for the patient. that is why we need to move these discoveries rapidly through to the clinic. >> is it expensive? >> it is. it is expensive because the fda and agencies like them around the world, their job is to protect patients' safety. a lot of what we have to do is to run a number of samples to ensure the efficacy of our tests, the deficit -- the efficacy of the drug with artest, and assure patient safety. you're looking happy $4 million or so -- you are looking out for million dollars or so for clinical trials. and then about $10 million total and to submit to a panel for approval. approval.