CNBC Squawk Box: Interview with Gene Cartwright

 

TRANSCRIPT: CNBC Squawk Box, Interview with Gene Cartwright

KERNEN: GE Healthcare is announcing a new joint venture to develop and market a virtual microscope which will transform a key diagnostic process into the digital age. The new company is called Omnyx.
GE is the parent of this network. Gene Cartwright is the CEO of Omnyx.
Why--good morning to you, good to see you.

Mr. GENE CARTWRIGHT (CEO, Omnyx): Good morning.

KERNEN: University of Pennsylvania Medical Center had the best technology? Why team up with these guys, Gene?

Mr. CARTWRIGHT: It's actually University of Pittsburgh Medical Center.

KERNEN: Yeah--what did I say? University of Pitt--UPMC.

Mr. CARTWRIGHT: Yeah, and they have been leaders in this field for quite a while. They both have an interest in transforming their own 20-hospital system, and enabling a lot better medicine to be done there. In addition, they have some international sites, and it would be useful from that standpoint, as well.

KERNEN: So, at this point, diagnostics, or the type of technology you're talking about now is how far behind the rest of the industry in terms of the digital age, and why?

Mr. CARTWRIGHT: OK, good question. Radiology and cardiology both utilize images in a hospital environment. And they both have been digitized for some time now. The pathology world is essentially where you take a biopsy sample from a patient, and put a very thin slice of tissue on a glass slide and that's been done the same way for over 100 years. And the reason that has not been digitized at this point is because the size of the images are much, much larger than a radiology image. An example: digitized image from one slide can be 10,000 megabytes.

So the technology for image acquisition has not been there, the storage costs have been too high, and the streaming of those images over the Internet has been very difficult.

KERNEN: Wow, so when you said much larger, I said, 'what are you talking about?' But now I see what you're saying. The amount of information is much larger. What you're actually looking at is much smaller, a lot of times than an x-ray.

Mr. CARTWRIGHT: Well, right. I mean, it is a 20 x magnification of a tissue sample, but the level of detail you have to have in order to make a good diagnosis is very exquisite.

KERNEN: So you could share this online with experts in the field around the globe, I guess, and you could have a database and probably even compare pathologies of thousands of different samples to see markers for disease, right?

Mr. CARTWIGHT: Well that's further out into the future. I mean, I will give you another example of the sort of thing that I think will happen. Every other month, you read about a new biomarker being discovered that's specific for some disease, and you can imagine that you might have five or six biomarkers that you want to look at with one tissue sample. If you add those five markers to one slide, and try to look at it under the microscope and discern what's going on, it's pretty difficult. But, a computer, with a digitized image, looking at that same information can readily make a decision.

KERNEN: It sounds great, Gene, but how much of what you determine through pathology, through these tissues is done using sight, and how much is done, actually doing a chemical reaction or some type of diagnostic test physically on the specimen? Seems like a lot more is gleaned from that than from a visual inspection.

Mr. CARTWRIGHT: No, I don't--I mean, I think they're very complementary. And there're not a lot of biomarkers on the market today--HER2 being the poster child. But morphology and the structure--

KERNEN: You mean the shape of the tissue and the way the cells look?

Mr. CARTWRIGHT: Yeah.

KERNEN: So when you're determining whether something is cancerous, you can do it by looking at the morphology, not at doing some type of reaction.

Mr. CARTWRIGHT: Right, and you also want to look at the invasiveness, and the size of the tumor, and such.

KERNEN: How big a market are you talking about for the joint venture, a couple of years from now, Gene?

Mr. CARTWRIGHT: We think, several years from now, it would be about a $2 billion market.

KERNEN: $2 billion?

Mr. CARTWRIGHT: Yeah. It's not--it really doesn't exist today. But essentially there are a billion and a half slides, just done in the US alone, every year. And so, it is a worldwide need, and if you translate the existing number of slides that are being done, and look at what it would cost to digitize them, it's easily, we think a $2 billion business.

KERNEN: And we split that or--"we," it's a constant problem I have, the royal we--General Electric splits that with University of Pittsburgh Medical Center.

Mr. CARTWRIGHT: That's correct. It's a 50/50 joint venture, sharing the investment, and sharing the profit.

KERNEN: OK. Great. For bringing us up to date on that, today, we thank you, Gene.

Mr. CARTWRIGHT: All right, thank you.

KERNEN: OK. See you later, Gene Cartwright.