Cochlear's Roberts: "We Have a Unique Opportunity"


As Baby Boomers get older and lose their hearing, demand is expected to rise for the cochlear implants that can help deaf people hear again. At least, that's the hope of Chris Roberts, chief executive of Cochlear, the world's largest producer of such implants.

Only 17,000 people globally had cochlear devices implanted last year. But in the U.S. alone, an estimated 900,000 people are thought to be deaf or near-deaf (see BW, 11/14/05, "Listen: The Sound of Hope").

Cochlear, based in suburban Sydney, Australia, holds about 70% of the implant market. Its shares have risen 56% this year, making Cochlear one of the star performers on the Sydney stock exchange. Now, the 52-year-old Roberts is pushing Cochlear into other types of hearing products, including hybrid devices that combine an implant with a hearing aid.

Roberts recently spoke with BusinessWeek's Bruce Einhorn about what's in store for people who are losing their hearing. Edited excerpts follow.

What sort of advances can we expect in hearing technology?

It's still early days in terms of where the technology is going. We are going to see significant advances in the next three to five to 10 years. There's a lot happening.

Most people with hearing loss get hearing aids rather than cochlear implants. What's wrong with traditional hearing aids?

Hearing aids aren't good for a lot of people. Just making the sound louder doesn't work for a lot of types of hearing losses. Hearing aids aren't an ideal solution. It just makes the sounds you can already hear louder -- the sounds you can't hear, you still can't hear. That's the technological limitation.

But your company is working with Phonak from Switzerland on hearing aids.

We have some research ideas. Phonak is one of the more innovative hearing-aid companies, out of Switzerland. That would be for a different type.

These would be implantable hearing aids?

We don't like to use the word implantable hearing aid because it has a lot of connotations. There have been failed hearing aids before. The problem is, you need to do something better than a hearing aid. If you just take a hearing-aid technology and implant it, there's not much opportunity there.

So what is Cochlear trying to do?

There aren't many companies working in this space. We have understanding of hearing, of implant technology, we work with opinion leaders. [For many people with hearing loss,] you need things other than cochlear implants, you need cochlear implants plus.

What can you offer such people?

One is an electro-acoustic type of device. Cochlear implants work very well at high frequencies, but if you have a little bit of residual hearing, it's often at the lower frequencies that you have it. So it's been that people wait until they have lost hearing enough so that if you put an electrode in the cochlear, there's no downside.

What you would like to be able to do is to preserve what little bit of hearing they have. What we want to do is put an electrode in for the higher pitches -- typically for speech -- and acoustic stimulation for the lower frequencies. We need to work with the surgeons to develop electrodes that are atraumatic, so you can put the electrodes in the cochlea and preserve those delicate structures [of the hair cells in the inner ear].

How big is the potential market for these hybrid devices?

There are probably 50 to 60 times more patients who would be suitable for that device than for a cochlear implant.

Is this something that people will be able to get soon?

There's a trial going on at the University of Iowa [with] interesting results. There's real stuff going on. [The timing] is a couple of years off -- it's not months, but it's not decades. There aren't many people in the world working on this. I think we have a unique opportunity to really contribute to this space.

You have two main competitors, Advanced Bionics from the U.S. and Med-El from Austria. But people talk about companies in China or India coming out with low-cost versions of cochlear implants. Doesn't that worry you?

No company's external device works with any other company's implant. So when you have an implant, you're really relying on that company being around for the rest of your life. You're making a decision for the rest of your life, or the rest of your child's life. That's a huge barrier to entry.

Why?

No matter what advanced technology you have today, it will be obsolete down the track. So the real issue is, how do I know if my son gets an implant, [can he get] an upgrade in 2010, 2020 or 2050?

I don't know of any other device quite like that. If you have a hip replacement and the company goes away -- well, it doesn't matter. If you have a pacemaker, it's not quite like this. You want the implant to last the rest of your life.

It's a wider commitment than getting married. The technology moves on. As we develop new external devices, they have to be backward-compatible with the old ones. And we've done that. We've never walked away from any recipients. Those early recipients have had maybe four upgrades now.

Today, very few people with cochlear implants have them in both ears, but you've said that you see a trend toward having bilateral implants rather than unilateral ones. Why?

There are probably 50,000 to 100,000 people who go single-sided deaf a year. Thirty years ago, if you got a hearing aid, you got one. Now you get two. We listen with two ears for good reason. I don't know when it will happen, but it will happen that kids will get two. It might be five or 10 years before it's routine.

Cochlear implants are controversial among some people in the deaf community who are opposed to parents getting the devices for their young children. What do you say to them?

I think that their opposition is becoming less and less. And that's through the results. These children may be in deaf schools before being mainstreamed, and the teachers see these kids get transformed. You can't look at these results and say they're not real -- it's very hard to argue against technology. If you look at these kids [with hearing because of implants], you can't say you want to take that away from them.


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