"Body on a chip" is an emerging biotechnology with the potential to safely speed up the new drug development process, saving drug companies staggering amounts of money a year. 

Uncle Sam is kicking in at least $70 million in grants to turbocharge the efforts of those working on this technology, such as folks at The Wyss Institute at Harvard and the Wake Forest Institute of Regenerative Medicine. The public company players include GlaxoSmithKline (GSK -0.07%) and Sony (SONY -0.81%).  While 3-D bioprinter Organovo Holdings (ONVO) isn't involved, its investors should follow this project as it has the potential to develop products that could compete with Organovo's planned commercial offerings. 

The project
The five-year "Tissue Chip for Drug Testing" project, which kicked off in July 2012, involves a collaboration between The National Institutes of Health, DARPA (the U.S. Department of Defense's research arm), and the Food and Drug Administration.  

Its goal is to build 10 different "organs on chips," which simulate the functioning of a specific organ, connect them together to form a "body on a chip" to replicate the functioning of the human body, and design software that provides analysis. The government plans to use this platform to safely and rapidly develop vaccines and drugs to protect military folks against diseases and bioterrorism. 

The picture below shows what an organ on a chip looks like -- they're flexible polymer substrates with hollow channels lined with living cells. 

It wasn't until 2010 that researchers at Wyss developed the first lab-ready organ-on-a-chip: the lung-on-a-chip. Various types of "labs on a chip" – a broader category than "organs on a chip" -- had been in use for a while. These are used to study how certain cells or fluids react to small molecule drugs. 

Wyss and others also currently have heart, liver, kidney, bone marrow, gut, and other organ-on-a-chip systems in various stages of development.

Source: Wyss Institute.

Wyss working with Sony and GlaxoSmithKline
Sony announced earlier this year it was collaborating with Wyss to help advance this technology. It might seem odd that a company best known for its consumer electronics is involved in this project. However, Sony entered this space about two years ago when it acquired Micronics and three other companies working on labs on chip technologies. 

GlaxoSmithKline is collaborating with Wyss in testing a new class of drugs it's developing using lung-on-a-chip, which is the first lab-ready organ-on-a-chip to be used in drug research. Earlier this year, researchers began using the chip to recreate pulmonary edema, a deadly condition in which the lungs fill with fluid and cause blood clots. They then treated the condition with Glaxo's TRPV4 channel blockers. 

There seems to be a general agreement that drug companies will likely quickly put these devices to use for internal decision-making in the early stages of drug development. However, it will take much longer for the devices to replace animal models used for regulatory approval.

Organovo has company in the 3-D bioprinting space
As if this project wasn't already cool enough, there's a 3-D printing -- bioprinting, in this case -- angle. Wake Forest Institute of Regenerative Medicine has been using 3-D bioprinting for some time to build tissues and select (flat and non-solid) organs used for transplants. It's essentially using the same technology for the DARPA project.

The picture below shows one of the modified 3-D printers, developed at Wake Forest, which researchers are using to bioprint human cells in hydrogel-based "scaffolds" -- or frames -- to form tissues and miniature organs. These tissues or organs are then placed on chips to form organs on chips, as previously described. 

Source: BBC.

While Organovo is doing some amazing work in 3-D bioprinting, it's not the only entity heavily involved in this niche. Granted, it may be the only publicly traded entity, but that doesn't mean Wake Forest (or others) shouldn't be considered potential competitors. There's the potential for products that result from this DARPA project to be commercialized, and some of these products could compete with Organovo's planned offerings.

If you're not familiar with Organovo, it's a development-stage company which recently announced it bioprinted 3-D liver assays that were able to retain key liver functions for more than 40 days. It plans to start marketing its liver assays next year. 

There's huge promise in focusing on the liver because liver toxicity is a primary reason why drugs which have made it through preclinical testing fail in clinical trials. Drug companies could prevent much wasted time and save billions of dollars if liver toxicity issues were detected earlier in the drug development process. 

Staggering time and money savings potential
Using body on chip devices for decision-making early on in the drug development process should enable companies to more quickly weed out drugs that don't seem promising. 

Here a few statistics that illustrate the time and money savings potential of these devices:

  • It takes an average of 12 years for a drug to travel from the research lab to the patient. 
  • Fewer than 1 in 10 medicines that start being tested in human clinical trials succeed.
  • More than 30% of human clinical trials fail because drugs don't work in people the same way they did in animal tests, according the National Institutes of Health. 
  • Over the last 15 years, the total average cost of developing a new drug has ranged from a low of $3.7 billion (Amgen) to a high of $12 billion (AstraZeneca), according to a Forbes study. Figures of about $1 billion are frequently thrown around, but these reportedly don't include the costs of failures. 

Foolish final chips on the table
"Body on a chip" is an emerging biotechnology with the potential to save gargantuan amounts of time and money in the new drug development process. 

It's a bit too early to pinpoint potential investment winners; however, investors should hone in on the two major classes of companies likely to benefit from this (and related) technology: drug companies that are early adopters and those supplying various components of the technology to the drug companies. 

Organovo, which plans to start marketing its liver assays next year, has incredible potential. However, Organovo investors need to keep an eye on the DARPA project's progress, as there's the potential for the project to "print" up some offerings that could compete with Organovo's planned offerings.