Novartis AG (ADR) (NVS), Medtronic, Inc. (MDT): Will Smart Pills Revolutionize Health Care?

In May, Oracle Corporation (NYSE:ORCL) made a minority investment in Proteus. The two companies plan to work together in clinical trials to provide clinical investigators with data regarding the efficacy of its smart pill technology. Proteus’ technology will also be integrated into Oracle’s health care IT segment, which has a wide array of services based in its Oracle Health Services Cloud. Boosting the strength of its health care portfolio could help boost Oracle’s presence in the health care IT industry, where it competes with other IT giants like Hewlett-Packard and IBM.

The evolution of camera pills
Just as the smartphone was an evolutionary step up from the digital camera, smart pills represent the evolution of capsule endoscopy — those tiny camera pills that were approved by the FDA more than a decade ago. Camera pills are generally used to record videos for gastrointestinal treatments, but they lack Proteus’ sophisticated sensors.

Given Imaging Ltd. (NASDAQ:GIVN), a major manufacturer of camera pills, recognized this market shift and acquired SmartPill Corporation’s Smart Pill GI Monitoring System last October for $6 billion. The SmartPill uses sensors to measure pH levels, pressure, and temperature in the gastrointestinal tract. It can also measure total gastrointestinal transit times to better evaluate disorders like gastroparesis and constipation.

Demand for Given Imaging Ltd. (NASDAQ:GIVN)’s pill technologies is rising; last quarter, the company reported that earnings and revenue rose 70.7% and 11.1%, respectively, from the prior-year quarter. Shares are up more than 30% over the past 12 months.

A Foolish final thought
Smart pills represent a major point of convergence for the tech and health care industries. These camera pills that have evolved into full-featured medical sensors could significantly improve patient adherence to medications and better measure the effects of those medications in real time.

With companies like Novartis AG (ADR) (NYSE:NVS), Medtronic, Inc. (NYSE:MDT), and Oracle supporting this technology, smart pills could soon join telehealth, EHRs, and mobile apps as the next big thing in the booming health care IT industry.

The article Will Smart Pills Revolutionize Health Care? originally appeared on Fool.com and is written by Leo Sun.

Leo Sun has no position in any stocks mentioned. The Motley Fool owns shares of Medtronic and Oracle.

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