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Laura Wright
Vice President
CameronWeeks Public Relations

Greg King, COO of nanoTox, Inc., talks about what the new nanotech regulations here and overseas might look like, how they might affect the industry's future and what nano companies might expect to face in the coming years.

April 1st, 2009

Nanotechnology in the new regulatory environment

Legislation regarding nanotechnology regulation and reporting requirements continues develop in the U.S. and abroad. The latest entry in the nanotech regulation debate is Australia, where unions and industry are calling for a publicly accessible registry of nanocompanies and full labeling to protect workers.

I asked Greg King, Chief Operating Officer of nano-risk assessment company, nanoTox, Inc., what the new regulations here and overseas might look like, how they might affect the industry's future and what nano companies might expect to face in the coming years.

What do you think are the top obstacles nanotechnology companies will face in the next five years?

KING: Nanotech companies will face two major obstacles, the first being addressing environmental health and safety issues. According to Lux Research, 42% of nanotech CEOs cited EH&S as the most important issue they face. Supporting this view is the increased number of peer-reviewed articles discussing EH&S issues published since 2003. In the last five years, the number of these articles has risen from 25 to more than 130 in 2007.

We've also seen this in many recent actions taken here in the U.S., such as reevaluation of the Toxic Substances Control Act (TSCA) to determine if it effectively addresses toxic or potentially toxic substances, including nanomaterials and nanotechnology products. The EU recently passed more stringent safety regulations for the use of nanomaterials in cosmetics. Companies will have to adhere to "safety first' precautionary testing before their products will be approved for sale. Japan's Ministry of Economy Trade and Industry also is expected to announce safety regulations similar to the U.S. EPA.

Modifications of regulations such as these likely will include requirements for specific nanomaterials, as we've seen with carbon nanotubes. Mandatory reporting also is likely, especially for manufacturers making or shipping large quantities of raw nanomaterials, which will include detailed particle descriptions, potential environmental hazards and procedures for the safe handling of accidental spills or releases.

The second issue will be managing nanotech backlash - whether the public perceives nanotechnology to be beneficial or harmful. Much of this perception will be driven by the extent to which the industry is regulated and materials deemed reasonably tested and safe for human consumption or exposure.

The press will be instrumental in driving public perception based on the themes of their coverage. Considering the research conducted by Lux Research, which found that 65% of people aware of nanotechnology support it and that only 25% of those who do not understand nanotechnology support it, building awareness of the technology among the general public will be key. To date, many articles have expressed fears about the lack of testing and/or regulation. Making sure that the media gets accurate, science-based information could allay many unfounded fears and go a long way to educating the public so they have a realistic view of the technology's potential, as well as its risks.

And unfortunately, another element will be luck: whether or not an incident happens that casts a large dark cloud over nano in general. Hopefully that can be avoided.

What do you hear from VCs in the field regarding nanotech investment?

KING: Venture capital investments in nano have tripled in the last five years from approximately $400 million in deal value to more than $1.2 billion in 2008. They are generally late entries into the industry and are focusing on energy and healthcare fields.

However, we expect that investors will require their potential portfolio companies to provide data, assessing the safety risks of their nano materials and products, prior to making an investment to ensure a thorough understanding of potential risks. In addition, many in the insurance industry already are wary of nanotech. Should they refuse to provide coverage for nano companies or make insurance rates prohibitively high, then investors may begin to back off due to concerns over liability and cost.

Which nano-enabled industry sector seems most ready to face the new tide of regulations being considered in the U.S. and abroad?

KING: In my opinion, the health care industry is best positioned to face changes in regulations. They are used to the regulations already in place for pharmaceuticals, and upcoming nano regulations are expected to be similar as those for ‘normal' medicines and medical devices.

Pharmaceuticals already are showing tremendous potential in their use of nanomolecular structures for drug targeting and delivery, such as the liposome-encapsuled drugs produced by Nexstar (doxorubicin for cancer treatment and amphortericin B for fungal infection), which produced $20 million in sales in 1999.

As long as every effort is made to reduce societal risks and the public is made aware of this technology's enormous potential for medical benefit, this sector should do well in coming years.

What is the one best thing the Obama Administration could do - besides funding - to encourage growth of the nanotechnology sector?

KING: The new administration needs to sponsor or support responsible regulation and comment on the potential benefits of nanotechnology. The recent federal stimulus package, which dedicated $111 billion to science and infrastructure, suggests that it will be supportive of nanotechnology research and development, particularly in the energy sector. It would be good to see them add their voice to promote the technology.

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