Cancer

Siemens’s Cancer Therapy Faces Roadblocks


Inside a compound with eight-foot-thick walls and armor-plated doors, Hans Dieter Schmitz lies strapped to a carbon-fiber stretcher, where a tumor in his head is bombarded with carbon ions at more than half the speed of light. The beam attacks cancer cells considered too risky to remove surgically while sparing healthy tissue. For Schmitz, the therapy may be his last hope.

The stakes for Siemens (S), which made much of the equipment, aren’t life or death, but the engineering giant has plenty riding on the treatment. Siemens has spent more than $1 billion on the technology, called particle therapy. It differs from other radiation treatment in that it uses carbon ions. These are smaller than the protons and photons typically employed to kill cancer cells, so they can be targeted more accurately. The site where Schmitz is a patient, in the southern German city of Heidelberg, is the only one of its kind, shooting both ions and photons to give doctors a range of treatment options. Although exhaustive clinical studies haven’t yet been completed, Rhön Klinikum, a Siemens partner in the technology, claims the system can cure more than 90 percent of some cancers.

Despite the promise of the therapy, Siemens acknowledges it may have moved too fast in introducing it. The installation, which has a staff of 60 and consumes as much energy as a small city, has been troubled by technical and logistical glitches. Today it treats only half the number of patients it needs to break even, and Siemens has scaled back two similar facilities in Germany. “This serves as a reminder of the importance of not letting strategic impatience cloud commercial judgment,” says Deutsche Bank (DB) analyst Peter Reilly, who says Siemens was “overly optimistic” about the number of patients it can treat.

On Sept. 14, Siemens said it wouldn’t install a planned particle therapy facility in the northern German city of Kiel after spending three years building the clinic that was to house it. Another center near Frankfurt is to become a research facility, which means it won’t treat patients. In its most recent quarter, Siemens wrote off €381 million ($521 million) of its investment in particle therapy. Chief Executive Officer Peter Löscher said in a July conference call with reporters that the technology is not yet “ready for prime time.”

At the Heidelberg center, software to control the ion beam was delayed, and shuffling patients through each session on the machine has proven more time-consuming than anticipated. The particle accelerator also requires longer intervals between cycles than planned, says Irmtraut Gürkan, who oversees the clinic’s finances. Siemens expected the Heidelberg facility to reach the breakeven point of 1,000 patients in 2006. (Germany’s health-care system currently pays about €19,500 for each treatment.) This year the center is expected to treat just 500 patients, and Gürkan says it won’t likely reach 1,000 until 2013.

Clad in copper shingles, glass panels, and unfinished concrete, the center has the look of a minimalist design studio. The building’s walls, doors, and floors are fortified, and the inner structure has a labyrinth-like layout to prevent particles from escaping. The facility operates five days a week, with each session usually lasting less than 20 minutes.

The therapy uses ions extracted from carbon dioxide and spun through a giant accelerator. From there, vacuum tubes and powerful magnets navigate them to cannons in treatment rooms, where the ions are focused into a beam directed at cancer cells deep inside a patient. Heidelberg has two treatment rooms with stationary ion cannons mostly used to treat brain tumors. A third chamber has a flexible beam steered by a 670-ton device nearly the size of a jumbo jet that can point ions to any spot on the body.

Siemens, which makes everything from hearing aids and lightbulbs to locomotives and power turbines, had expected to apply its experience in other industries to help it automate particle therapy. Some portions of the treatment resemble factory work flows: Computer-guided robots that position patients under the radiation source, for instance, must be synchronized with other robots that help create X-ray and computed tomography images to guide the ions to their target. But other systems couldn’t be automated the way Siemens had expected, says Nicholas Heymann, an analyst at William Blair in New York. “Cancer is a wide-ranging market,” Heymann says. “But if you can’t get to those thresholds in cost-effectiveness, your marketability is not going to be very strong.”

Schmitz, a retired factory worker from a small town near the Belgian border, will likely know the results of his seven weeks of treatment later this fall. For Siemens and the doctors, it will be years before they find out if particle therapy will become a successful business. “A cycle to develop such technology can easily last 10 years or more,” says Jürgen Debus, the medical director of the Heidelberg facility. “The complexity wasn’t foreseeable at the time of the start. This is a general problem of today’s business world.” Flexible Beam Cannon

This 670-ton magnetic device, nearly the size of a jumbo jet, can steer the ion beam toward any spot on the body, allowing doctors to target cancer cells in hard-to-reach placesIonSourceLine Accelerator

Magnets drive the ions to 20% the speed of lightParticle Therapy: A PrimerStationary Cannons These point beams of ions at tumors in patients’ headsSynchrotron Ring

After multiple loops, particles are sped up to more than half the speed of light

The bottom line: After spending more than $1 billion on a new therapy to fight cancer, Siemens says the treatment isn’t yet commercially viable.

Weiss is a reporter for Bloomberg News in Frankfurt.

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