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From the Blog
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Nanotechnology
Falls Short of the Hype
The nanotechnology
commentary is immediately below. However, we first wanted to direct you
to a couple of important blog entries posted at the site since our last
newsletter.
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Nanotechnology
Falls Short of the Hype |
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Several
weeks ago we
posted the beginning of what we hoped would be a series of commentaries
on nanotechnology investments. Though not exactly 'new' (the term proliferated
around 2003), President Obama's stimulus package included funding for further
nanotechnology R&D that could have led to a giant leap for the industry.
As we did more
digging though - and really took a critical look at which aspects of
nanotechnology were investment-worthy - we didn't find much. Oh, the
concepts and theories are abundant... it's just that commercialization
so far has been minimal.
While a handful
of nanotechnologies are indeed driving revenue, it may be worth separating
the current, foreseeable, and long-term developments in the field before
investors jump on a stock prematurely.
Currently
Marketed Nanotechnologies
 You
may already be using nanotechnology and not even know it. If you own one
of Amazon.com's Kindle reading devices, congratulations - you're
using nanotechnology. The display screen used by the Kindle is not
an LCD screen, but rather a plate of carbon nanotubes that was co-engineered
by Samsung Electronics and Arrowhead Research Corporation (ARWR).
The advantage
of this form of computer display is lower power consumption, easier readability,
and greater durability. LCD display manufacturers should be worried too...
the Samsung/Arrowhead team has successfully fabricated a 14-inch display
screen, bringing them close to the current standard.
Nanotechnology
is also a growing part of the microprocessor and semiconductor manufacturing
process.
Recent developments
in metrology (the ability to create tiny, perfectly-sized things) has meant
another evolution in the shrinking of computers and smartphones. While
we expect all computer component makers to adopt the standard eventually,
it's the metrology equipment makers themselves - like Nanometrics Incorporated
(NANO) and Veeco Instruments (VECO) - that stand to gain the most.
Though it was
assumed the field of medicine would experience the biggest advancements
thanks to nanotechnology, very few leaps have been made yet.... making
this one the biggest nanotechnology disappointments to date. One practical
and marketable use has emerged though; NUCRYST Pharmaceutical (NCST) currently
markets an antimicrobial wound
dressings laced with silver nanocrystals, which apparently help fight
infections.
And finally,
nanotechnology know-how has made a monetized appearance in the energy sector.
The biggest advancements have been granted to solar power and combustion
engine fuels.
 Though
solar panels created with nanotechnology are less efficient than the standard
vacuum deposit/crystalline variety, they're also far cheaper.... and flexible
(literally).
Copper-indium-diselenide
ink and silicon
nanocrystalline ink can simply be 'painted on' a sheet, which then
becomes a simple solar panel. Other companies are working on growing organic
panels that essentially do the same. None of these manufacturers are publicly-traded
companies that we could find, however.
As for fuel,
a handful of private companies are creating nanocatalysts to increase the
mileage of diesel fuel in addition to reducing its pollution. It works,
and
is generating some sales, but has yet to catch on in a decisively
meaningful way.
Part of the
challenge has simply been that these catalysts are usually noble metals
like gold or palladium, which have been painfully expensive of late. Copper
and zinc are being developed as alternatives, but their reduced cost may
be offset by their reduced benefit.
Near-Term
Developments With Commercial Potential
Perhaps one
of the more exciting (and potentially marketable) projects underway is
Headwater's (HW) nanocatalyst
that can convert solid fuel sources like coal into liquefied
fuel.
[On a side
note, Headwaters also markets a catalyst that converts otherwise-useless
petroleum products like waste oil, sludge, and low-grade oil into jet fuel,
heating oil, diesel, and gasoline. It is not clear to us why the technology
has not been widely adopted, though cost may be one of the issues.]
While we mentioned
above that the medical field has not seen enough advancement from nanotechnologies,
one or two big leaps are around the corner.
Sooner than
later (relatively), nanoparticles will be delivering chemotherapy straight
to cancer cells and tumors. CytImmune's
Aurimune (CYT-6091) is currently in Phase I testing, and has shown
promise so far.
 That's
not the only practical medical use in the near-term works though. Invitrogen
Corp. (LIFE) is experimenting
with what are called quantum dots, which can be used to locate and
diagnose cancerous tumors. BioDelivery Sciences Int. (BDSI) has developed
a method of drug delivery through a nanotechnology crystalline structure
called a cochleate. It has yet to monetize the technology, however.
Point being,
it's not too soon to at least start thinking about investing in some of
these medical breakthroughs... though we suggest caution all the same.
And finally,
the use of nanotechnology in every-day products like food, appliances,
and cleaning products is upon us.
Remember the
use of silver as an anti-microbial agent found in wound dressings? Samsung
is working an applying the same idea to refrigerators and washing machines
in an effort to improve their sterilization ability. Bayer Polymers is
developing silicate nanoparticles that will provide a stronger barrier
for food packaging, preventing gasses and moisture from coming in contact
with the food and spoiling it before it's consumed.
Developments
Too Far Down the Road to Worry About
 Nanorobots,
smart dust, and mechanosynthesis - not to mention all their close cousins
- have been the poster children for nanotechnology over the last several
years. And why not? Their function is almost Star Trek-ish, blurring the
line between fantasy and reality.
Unfortunately,
none of these ultra-cool nanotechnologies are much past a conceptual phase.
Bits and pieces of the know-how exist, but even if all of the required
knowledge were in place, the technology to construct such technologoes
that actually 'do' anything meaningful is still out of reach.
Almost needless
to say, no matter how cutting edge a technology is, if there's no demand
for it then it's not a great investment.
Bottom Line
That's certainly
not an exhaustive list of nanotechnology companies and concepts, but you
get the idea... some of them have a clear future, while many of them don't.
It's easy to
get caught up in what the future could hold. But, some of these technologies
may not bear revenue for another 10 or 20 years, if not longer. Investors
who want to tap nanotechnology in the meantime should focus more on function
and marketability, and less on the possibility of turning science fiction
into fact.
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Updated: 8:15 pm PDT (03:15 GMT), November 2, 2010
