July 24, 2016

Company Profile: Positive ID

A Chip Off the Old Block: Update on Implanted Microchips

A Delray Beach company retools technology - and marketing strategy - for human microchips

Amy Keller | 7/1/2010

Scott Silverman
CEO Scott Silverman displays glass encapsulated chips, which are inserted under the skin, and the scanner, which reads a 16-digit identifying number transmitted by the chips.
[Photo: Newscom]
Eight years ago, when Applied Digital Solutions of Delray Beach introduced a microchip that could be implanted in humans, company executives thought they had a product that would create the ultimate portable medical record. The rice grain-sized VeriChip could save lives by providing access to vital health information in emergency situations when the patient couldn’t speak. One potential use: Keeping track of Alzheimer’s patients who are prone to wandering off but are often unable to communicate effectively because of their illness.

The technology was even familiar — almost identical to the chip that millions of Americans have implanted in their pets for identification purposes. Like the pet chip, the VeriChip consists of a glass encapsulated radio frequency identification tag that’s injected under the skin. When exposed to a scanner at close range, it transmits a 16-digit identification number that can be linked to a secure patient database with information on everything from the patient’s drug allergies to pre-existing medical conditions.

The company thought it had a winner. But the chip got under the skin of some who worried that it could be used as a surveillance device. Pets were one thing, but most consumers were uncomfortable with the notion of having a RFID tag under their own epidermis. Scott Silverman, then CEO of VeriChip Corp., the Applied Digital Solutions subsidiary that marketed the chip, disclosed in a 2004 interview with Slate magazine that the company’s own research indicated that nine out of 10 people were uncomfortable with the technology’s use.

PositiveID envisions linking its chip to a database containing information on a patient’s drug allergies and pre-existing health conditions. Another possible use: Keeping track of Alzheimer’s patients. [Photo: Newscom]
VeriChip’s business took a turn for the worse in late 2007, when studies indicated a potential link between RFID transponders and cancer in lab animals. Adding to the company’s woes, several states passed laws prohibiting companies and governments from requiring microchip implants.

Despite an aggressive marketing campaign, sales of the company’s VeriMed Health Link System — incorporating the RFID chip, a handheld scanner and an online health record — fell from $76,000 in 2007 to $43,000 in 2008. Another VeriChip subsidiary, Xmark, which sold wearable RFID products, continued to do well, accounting for the vast majority of VeriChip’s revenue.

After selling Xmark in 2008, Silverman decided to take a “few months hiatus” and stepped down as CEO — until his former colleagues at Applied Digital announced in July 2008 that they were planning to liquidate what remained of VeriChip to pay off debt.

At that point, Silverman stepped back in, bought their shares and became majority holder of VeriChip Corp. “I believed fully in the implantable chip technology that remained as an asset,” he says. “The company was still listed on Nasdaq, and a Nasdaq listing has significant value.”

Silverman says his company, which he renamed PositiveID Corp. last year, is no longer actively marketing the implantable chip for identification purposes but is instead working on using the technology for a variety of medical diagnostic purposes.

To that end, PositiveID has partnered with a Minnesota firm called Receptors to develop a microchip that can detect glucose levels in the body and transmit a blood sugar reading to a scanner. The Minnesota company recently received two patents for technologies that will serve as the basis for the device. PositiveID’s glucose sensor is years away from commercialization, Silverman says, but adds that, “In theory, way down the road, that same chip could contain a device to release insulin as well.”

Meanwhile, the company hopes to use similar technology to create a non-implantable test kit that could quickly identify various flu strains. Silverman says the company is already in phase 2 development. It hopes to complete the prototype before the next flu season.

Tags: Healthcare

Digital Access

Add digital to your current subscription, purchase a single digital issue, or start a new subscription to Florida Trend.

An overview of the features and articles in this month's issue of Florida Trend.


Florida Business News

Florida Trend Video Pick

Taking the kids to Kennedy Space Center
Taking the kids to Kennedy Space Center

Space fans old and young will enjoy the many sides of KSC: The sheer size of the suspended Saturn 5 rocket, the IMax movies, the bus tour, the new Angry Birds exhibit, the rocket garden, climbing through the miniature International Space Center, trying out a re-creation of a shuttle landing -- and much more.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

In his acceptance speech at the RNC, Donald Trump painted a dark picture, portraying the United States as a diminished and even humiliated nation. He said these are times of crisis, and our way of life is threatened. Do you agree with Trump?

  • Yes - completely agree
  • On the fence
  • Don't agree, see things more optimistically

See Results

Ballot Box