Cancer Cure Inc.

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Many of the biggest achievements in this city fly under the radar because Seattle is a casual place. Nobody brags. Nobody struts. Yet a historic effort to cure cancer and other challenging diseases that could change the course of medicine has been going on for years right under our noses. 

Juno Therapeutics recently launched a central part of that effort into the spotlight. The biotech startup raised more than $310 million in less than 12 months to fund a new treatment approach that harnesses the power of the body’s immune system to fight cancer. That kind of money is rare for biotech startups anywhere in the world, let alone Seattle. And it speaks not only to Juno’s distinct offerings and its powerhouse staff, but also to the little recognized work on immunology being done in places like the University of Washington, the Fred Hutchinson Cancer Research Center, Seattle Children’s as well as other research institutions and private companies throughout the city that made Juno’s fundraising success possible.

Juno Therapeutics’ scientific cofounders. From left, Doctors Michel Sadelain, Michael Jensen, Isabelle Rivière, Phil Greenberg, Stan Riddell and Renier Brentjens

Immune system research has always been an area of strength in Seattle, but for many years, scientists had only a fuzzy idea of how the immune system functioned. Determined research and advances in sequencing technology recently enabled a clearer picture to emerge of what human bodies do to defend against invasion. Now, the immune system has become an area of huge potential, as researchers discover how to manipulate the complex system to combat disease more effectively. 

As a result, the immunotherapy market is booming. Immunotherapy targets many diseases, but the cancer immunotherapy market alone is predicted to reach about $68 billion globally by 2018, according to BCC Research, a publisher of technology market research reports. Seattle has many of the necessary ingredients to become a major player, such as a vibrant research sector, strong collaborative relationships among scientists, entrepreneurs and pharmaceutical companies, and expertise in global health and data management that is valuable in a changing health care landscape.

Seattle’s growing strength in immunotherapy could also provide an important boost to its struggling biotech sector, which took another hit this year when Amgen decided to shut down its operations here and lay off the 600 employees who remained from its acquisition of Immunex in 2002.

Multinationals and philanthropists are plowing money into research efforts that are bolstering Seattle’s already strong work in  immunotherapy. In July, Celgene, a New Jersey biopharmaceutical company with $6.5 billion in revenues last year, announced it would open an Immuno-Oncology Center of Excellence based in Seattle. In September, the Danish company Novo Nordisk said it plans to add to its Seattle presence with the Novo Nordisk Obesity Research Unit to focus on obesity and diabetes, an autoimmune disease. In April, the family of Amazon founder Jeff Bezos contributed $20 million to Fred Hutch to explore the potential of immunotherapies for treating lung, colon, breast and other common solid-tumor cancers.

While immunotherapy is being applied to a multitude of diseases, recent research suggests it could play its biggest role in fighting cancer. Cancer is a tricky disease. Because it begins as mutations of our own cells, it often fools the immune system into remaining dormant as it grows. A research team at Fred Hutch made a major breakthrough when it pioneered bone marrow transplantation as a treatment for blood cancers in the 1970s. 

In essence, a bone marrow transplant gives the patient an immune system reboot. Hematopoietic stem cells live in bone marrow and are the foundation for white blood cells, a critical part of the body’s immune response. Chemotherapy and radiation destroy cancer cells, but also take a toll on the bone marrow, so patients who have undergone high doses of both lose much of their ability to fight off infection or disease. By transplanting healthy bone marrow, scientists found that they could rebuild the immune response and allow patients to rebound more quickly from cancer treatment. 

The early success with bone marrow transplantation won the Fred Hutch team, led by Dr. E. Donnall Thomas, a Nobel Prize in 1990. It also attracted other researchers interested in looking more deeply at — and eventually manipulating — the body’s immune response. Their primary target was T cells, a type of white blood cell that circulates in the blood and the lymph system and attacks disease-causing pathogens. The cells have a vast and complex system of triggers and responses.

Juno Therapeutics’ approach works by drawing blood from a patient, separating out the T cells and engineering them to provoke a particularly strong or targeted immune attack on cancer cells — a more nuanced approach than chemotherapy and radiation, which also tend to kill many healthy cells. In a recent study of 16 patients who had acute lymphoblastic leukemia with a typical median survival of less than 6 months, 14 achieved complete remission after being treated with engineered T-cell therapy licensed to Juno. 

Although that technology came from Juno’s partner at the Memorial Sloan-Kettering Cancer Center in New York, Juno’s local partners at Seattle Children’s and Fred Hutch have also seen great success. “It’s truly incredible,” says Juno CEO Hans Bishop, who says he has seen patients recover after being treated with immunotherapy when, previously, they had only a few weeks left to live. “In my career,” he explains, “I’ve never seen clinical results like this.”

The potential for immunotherapy to provide a cure extends far beyond cancer. At the Benaroya Research Institute (BRI) at Virginia Mason, scientists are using immunotherapy to target Type 1 diabetes, multiple sclerosis and rheumatoid arthritis. Dr. Gerald Nepom started the immunology program at BRI in 1985, and this year the National Institutes of Health asked him to lead the Immune Tolerance Network, a global effort across 250 research sites to develop ways to “reprogram” the immune system, preventing the immune responses that lead to diseases like asthma and diabetes while still maintaining the body’s ability to fight infection. For the next seven years, the network will be headquartered at BRI, which will receive $27 million annually in support funding. “[Immunology] is becoming big science,” says Homer Lane, executive director at BRI. “It needs a lot of people to work together.”

Key Investigator. 
Dr. Nora Disis, a UW professor, focuses her research on developing vaccine and cellular therapies for breast and ovarian cancer.

Dr. Nora Disis, who works on immune-based cancer treatments and diagnostic tools at the University of Washington, has helped to build one of the nation’s top cancer vaccine programs and works collaboratively with other local research institutions such as Fred Hutch and Seattle Children’s. Bill Watt, who spent 15 years working in a lab environment before going into industry, is currently building a biotech startup called EpiThany that will commercialize Disis’ work by developing vaccines that trigger the immune system to attack tumors. 

“She’s just a colossus,” Watt says, describing Disis’ contribution to the field. EpiThany is putting three programs through clinical trials during the next year, and Watt is looking into collaborative relationships with other companies working in the realm of what are called “checkpoint inhibitors.” Sometimes, cancers send signals that put the brakes on the natural immune response. The inhibitors release the brakes again, making the enhancement provided by the vaccine far more effective. 

The collaboration between disis and Watt is a stellar example of the power of combining great research with entrepreneurial talent. Seattle has long had the research in spades. Now, more entrepreneurs are kicking in. Case in point: Juno CEO Bishop, who has worked at Dendreon and Bayer HealthCare. Bob Nelsen, cofounder of ARCH Venture Partners and a member of Juno’s board, calls Bishop “the most qualified individual on the planet to run an immunotherapy startup.” 

Nelsen may be biased, but he also speaks from experience. ARCH is the most active local investor in biotech startups and Nelsen was an early champion of a different version of Juno’s technology pioneered by a company called Xcyte. The startup amassed $150 million in financing only to sell its core technology for $5 million in 2005 after failing to get the treatment approved by the Food and Drug Administration. 

Nelsen says his instincts told him not to invest in an industry where he’d lost money before. But he was intrigued and eventually won over by the strength of the science behind Juno and by Bishop’s experience at Dendreon, a company that had great early promise based on the immunotherapy-based drug protocol Provenge. The business rose to billions of dollars in valuation, but failed to deliver on its early promise, in part because of the  $93,000 cost per patient of Dendreon’s treatment. Nelsen says the lessons Bishop learned at Dendreon are now part of the library of knowledge that Juno can apply as it takes its technology to patients. Bishop is taking the lesson to heart by focusing heavily on making Juno’s technology cost efficient. “Process development is the biggest group at Juno,” he says.

There are some doubts about how far Seattle’s biotech companies can go in developing and marketing biotech treatments. “The latest stages of drug development and commercialization are not our [region’s] forte,” says Clay Siegall, CEO of Seattle Genetics. Chris Rivera, CEO of the Washington Biotechnical and Biomedical Association (WBBA), says he has seen more startups move toward partnerships or mergers and acquisitions in order to accomplish the final stages of getting a treatment to patients. He thinks that trend will continue. 

But in the area of immunotherapy, Seattle has a broad range of strengths to draw from. One is strong support from local government. “The EDC is working with the city and state on an aggressive strategy to retain life science talent from Amgen and foster  companies such as Juno,” says Suzanne Dale Estey, CEO of the Economic Development Council of Seattle and King County. Officials hope Juno will establish manufacturing facilities here and become another anchor tenant for the region’s biotech sector. 

The promise of immunotherapy is drawing attention from many other companies. When Ron Myers left the Institute for Systems Biology to become CEO of the UW spinoff Nexgenia, for example, he shifted the company’s direction to focus on one of the key challenges in commercializing immunotherapy: accurately and quickly sorting out the T cells from a patient’s blood so they can be activated and sent back into the patient’s body to do battle with cancer cells. 

“Immunotherapy is revolutionary,” Myers says. “We are on the cusp of making it available to the masses. But the current state of manufacturing is far from optimized.” Oncothyreon, another Seattle-based biotech, is taking an immunotherapy approach to developing vaccines that fight cancer.

Companies like Nexgenia and Oncothyreon can draw talent from among the alumni of Immunex, a biotech company that rose to prominence with Enbrel, a treatment for autoimmune disease. There is also a wealth of talent at the many research institutes in the area. And these researchers are accustomed to working in a research and biotech culture unlike many others.

“There’s a very collaborative spirit that seems to extend throughout the research institutions, the university, among some of the pharmaceutical firms who have a presence in town,” says BRI’s Lane. “That spirit has encouraged a lot of great success stories in the research field. It’s important in the way science is evolving, particularly the kind of research we’re doing.” 

Rivera, of the WBBA, says Novo Nordisk, the European pharma giant that chose Seattle over Boston to build out its diabetes and obesity programs, called the city the only place where academia, nonprofits and industry were willing to sit down at a table together and talk about problem solving. “As far as industry getting things done,” Rivera says, “I think it’s a real asset that we have.”

“When you have a small community, there seems to be more dialogue,” notes Randall Schatzman, president and CEO of the 10-year-old Bothell firm, Alder Biopharmaceuticals. “We’re cheering on everyone. Their success is our success.” 

Seattle genetics, the city’ true anchor tenant in the biotech sphere, offered Schatzman a conference room to use when he was starting Alder, and Paul Abrams, then the CEO of Ceptyr, let the fledgling company use a bench in his lab for experiments. “We don’t have the concentration [of companies] of a Boston or a San Francisco,” Schatzman says, “but I think that’s a strength for us. I suspect that it would have been much more difficult for us as a startup to gain traction in one of those cities than it was here.”

Seattle has other advantages to draw from as it builds its immunotherapy sector. One is its large pool of global health experts. Rivera points out that the growing markets in the next two decades will not be North America and Europe, the traditional targets for health care startups, but China, Russia, Brazil and India. For help bringing new products to those markets, there’s no better resource than the global health field. Seattle has the largest concentration of global health organizations outside of Geneva, and those organizations not only have established relationships around the world, they also have years of experience in product distribution.  

Take as an example the Infectious Disease Research Institute (IDRI). Recently honored by the Washington Global Health Alliance for its innovative approach and commitment to partnerships and training, IDRI was founded to bring products for treating infectious diseases to the developing world. Its scientists work on vaccines, diagnostic tools and therapeutic treatments. As part of its vaccine project, IDRI makes adjuvants, components added to vaccines that help stimulate the body’s immune response. One of its products is part of the core technology at Immune Design, another Seattle immunotherapy startup focusing on cancer treatment.  “We’re truly world experts on these molecular structures,” says Erik Iverson, president of business and operations at IDRI.

Adjuvants are a useful tool in treating infectious disease, but they also have tremendous utility in treating allergies, cancer and HIV. This potential partly explains IDRI’s deep and sustained partnerships with many major players in the Seattle biotech world, including Seattle BioMed, Fred Hutch and the UW. The company also has a long-term partnership with Eli Lilly, which donated to IDRI all the tuberculosis resources acquired from Lilly’s acquisition of Icos Corporation. “They effectively established our drug discovery program,” Iverson says. 

Global health organizations are also experienced in keeping costs low, something that is more of a concern for health care companies since the introduction of the Affordable Care Act. In the past, treatments that made it through the FDA’s approval process were generally covered by most insurance, but now that coverage is far from guaranteed and there is a much closer eye on product costs. In July, Congress opened an investigation into Gilead Sciences’ treatment for hepatitis C, which costs roughly $1,000 per pill in the United States, or $84,000 for a 12-week course of treatment. 

Another seattle advantage is the strong presence of researchers making effective use of information technology. “Our biggest growth in membership is now digital health,” Rivera says. “You have Amazon, Microsoft, Tableau [Software]. Where else would you want to mix software and health care?”   

The University of Washington has also managed to attract some of the best minds in data science. Bioinformatics — a field that combines computer science, statistics, math and engineering to study and process biological data — is a growing division at many research institutes, including BRI and Seattle BioMed. Adaptive Biotechnologies, which raised $105 million in funding earlier in 2014, has at its core advances in computational biology that allow the company to provide incredibly fast and thorough analysis of a patient’s immune system. 

Seattle has most of the puzzle pieces in place to achieve success in immunotherapy. The unusual openness and collaborative spirit among researchers, small startups, large companies and industry players may help the region punch above its weight. And even if the Northwest never becomes another Boston or San Francisco, by building strength in important new areas such as immunology, it could support a vibrant biotech economy.   

“For immune research, particularly cancer immunotherapy, there is no place in the world like Seattle,” Disis asserts. “You have all these number one things in a small location in an area that encourages collaboration and entrepreneurship. If it can’t get solved here, it can’t get solved.” 

What Is Immunotherapy?

Immunotherapy treats disease by manipulating the immune response. The immune system is one of the most complex systems in the body, second only to the nervous system. It is made up of different groups of cells and proteins distributed throughout the body, working together to prevent and eliminate infection, repair damaged tissue and defend against foreign molecules. The innate immune system maintains barriers that prevent microbes from entering and provides the first line of defense against infection. The adaptive immune system is more highly evolved and has the ability to develop defense strategies tailored to different invaders. 

Many different types of cells are involved in the immune response. Lymphocytes known as B cells and T cells recognize and eliminate invaders and can also form memory cells that enable a faster response if the same invader is encountered a second time. Cytokines are proteins that help regulate lymphocyte activity and signaling between cells. Antigens are the proteins on the surface of invader cells that the immune system uses as identification tags, producing antibodies that lock on to the antigens and flag those cells for destruction.  

Immunotherapy approaches can enhance or suppress the immune response. They can also make it more focused. Some immunotherapies use T cells that are grown in the lab and taught to recognize and attack a specific type of cancer cell or antigen. These cells can be infused into patients, giving their immune response a push in the right direction. Others are based on interleukins, proteins that have the ability to increase growth and activity in the immune system. Vaccines developed to boost the immune response have been used successfully to treat cancer and other diseases.

In some cases, treatments are needed to dampen or turn off an immune response. These types of therapies are used for autoimmune disease, where the immune system becomes the aggressor and attacks healthy cells. Rheumatoid arthritis is one example. These treatments must be carefully tailored to suppress only the part of the immune response that is damaging healthy cells, without turning off the entire system.
Scientists, doctors and entrepreneurs are excited about immunotherapy because it has tremendous potential to help people struggling with many different diseases. 

Seattle-based Players in Immunotherapy

Juno Therapeutics 
Founded as a partnership among Fred Hutchinson Cancer Research Center, Seattle Children’s and Memorial-Sloan Kettering Cancer Center, New York.

Fred Hutchinson Cancer Research Center 
Fred Hutch is an anchor of the Seattle research community and a center for innovation and groundbreaking science. 

Adaptive Biotechnologies 
A Fred Hutch spinoff that makes diagnostic and monitoring tools based on high-powered immune system sequencing technology. 

Immune Design 
Launched by researchers from Caltech, the Infectious Disease Research Institute and Fred Hutch, it has since partnered with the New York-based Ludwig Institute for Cancer Research and the Cancer Research Institute to focus on products to help the immune system fight disease. 

VentiRX 
Led by Robert Hershberg, the former chief medical officer at Dendreon. Hershberg is partnering with Celgene to open an immuno-oncology center in Seattle. Celgene has an option to acquire VentiRx, but so far the company remains independent. 

Seattle Genetics 
Seattle Genetics is the company startups talk about becoming. Founded in 1998, its focus is on antibody-based cancer therapies. 

Benaroya Research Institute 
BRI is the headquarters of the Immune Tolerance Network, a collection of 250 research sites around the world pursuing therapies based on immune research. 

University of Washington 
The UW has one of the top immunology programs in the country and it facilitates partnerships between researchers and industry. 

ARCH Venture Partners 
Cofounder Robert Nelsen sits on the board of Juno Therapeutics. One of ARCH’s managing directors is Steve Gillis, who helped start Immunex. It recently raised $400 million to put toward new approaches that promise big results.

 

Welcome to the Drone Economy

Welcome to the Drone Economy

A new industrial sector is arriving — and nobody’s at the wheel.
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Jim Tracy runs a company that maintains and repairs wireless communications towers, many of them in some of the most rugged and remote country across eight Western states.  Just getting to the towers sometimes requires off-road vehicles and snowcats, says Tracy, the CEO of Legacy Towers in the Kitsap County community of Burley. Then there’s the climb up the towers, which can range in height from 100 feet to 1,700 feet. Aside from the risk posed by the height, there are other hazards presented by things like the weather or nesting wasps. And if inspection of the relay antennas at the top reveals the need for a part or a tool the technician didn’t bring up on the first trip, there’s another climb down and back up to be made. If only there were a way to inspect towers for hazards and to diagnose the problem from the ground, reducing risks and time spent on the job.  But there is, one already known to amateurs and hobbyists and one increasingly being used in scores of businesses — the drone, or, more properly, the unmanned aerial vehicle (UAV).
 
Legacy Towers got its first UAV in late 2013 and has found them useful in making climbers safer and their tasks more efficient. “If you can throw a drone in there,” Tracy explains, “you can cover more ground with less fuel use.” A camera-equipped drone can be dispatched to the top of a tower to read the bar code on an antenna, look for damage or check to see if it has been knocked out of alignment.
 
“The first one you get, it’s kind of cool,” Tracy acknowledges. “[But] at the end of the day, it’s just another tool.”
 
The power and potential in that tool are such that people are finding applications faster than technology developers or regulators can keep up. They’re also finding more places to deploy these devices.  Most of the attention has gone to things that fly — think Amazon’s experiments with drone deliveries — or operate on the highway, with Google, Tesla and every major auto manufacturer pursuing hands-free operation of cars. But driverless/pilotless/autonomous vehicles are also finding their way to, and doing work now, on rail networks, on farms and on the seas.
 
In the process, the people who write the software; make the antennas, sensors and other pieces that make the technology possible; build the trucks, cars, planes and boats that employ it, and apply it to problem solving in virtually every industry, as well as to those who collect and analyze data from drones, are building what might be called, for lack of a better term, the Drone Economy.
 
This drone economy isn’t a “maybe someday” promise of a flourishing economic sector. It’s already here. Much like the developing local space-business cluster (Seattle Business, January 2016), Washington is becoming one of the nation’s centers of research, development and commercialization of drone tech, with dozens of companies actively involved in it.
 
Creation of a new job-generating tech sector won’t be the only way the Drone Economy’s influence will be felt, either in this region or globally. Entire industries, and not just those dealing directly in transportation, stand to be reshaped by the products and services they already are bringing to market.
 
The activity and potential of the Drone Economy has caught the eye of state government, which in October convened the first meeting of the Unmanned Systems Industry Council. John Thornquist, who heads the state’s Office of Aerospace, says the council’s purpose is to get people in the industry talking to one another and to officials at all levels of government, to hash out issues that may limit the sector’s potential and “to help that ecosystem thrive.”
 
The idea of cars, boats, trains and planes that pilot themselves has been the stuff of science fiction and futuristic museum displays for decades. Some pieces of the technology have been around for years as well, as any kid with a remote-control car, boat or plane can attest. Real-world, full-size applications aren’t rare, either. Sea-Tac Airport’s subway system between terminals operates without on-board drivers. So does the SkyTrain system in Vancouver, British Columbia. Remote-controlled locomotives have long been used in switching yards.
 
But those applications are in closed spaces or networks, and the rail industry has had much less success applying the technology to long-distance freight networks. The Drone Economy is being built on the idea of getting autonomous vehicles, aircraft and vessels onto roads, into the skies and on the water.
 
A convergence of factors allows this transition to happen. Paul Kostek, a past president of the IEEE Aerospace and Electronics Systems Society and a Seattle-based contractor and consultant to tech companies, says the technologies that make autonomous vehicles and aircraft possible started out as solutions to other problems. In aviation, for example, where “weight and space are always critical,” the continuous drive for lighter and stronger materials made drones possible by dramatically shrinking the size, weight and power requirements. In automobiles, technologies developed to make driving safer, such as parking assistance and collision warning and avoidance systems, can easily be extended to help remove a human driver from the process.
 
 
Jim Tracy of Legacy Towers sees drones as another handy item in the toolbox.
 
Drone development has also borrowed from technology developed for use in fields outside transportation. WiBotic, a University of Washington-based business developing wireless recharging systems for aerial, marine and land drones, started with a charging platform for implantable medical devices like artificial heart pumps. “Drones need a way to scale in a way that power is not going to be a limiting factor,” says Ben Waters, WiBotic’s cofounder and CEO.
 
Technology has improved not just the vehicles themselves but also the images onboard cameras produce (thanks to stabilization) and the flight controls for operating UAVs. Adoption of the technology in the commercial sector has been accelerated, Thornquist says, by the low cost to buy and try one, and the often quick return on investment.
 
Kostek cites one other important factor propelling the Drone Economy: “Very rich people are interested in this.” With people like Tesla’s Elon Musk and companies like Google putting money into drone development, Kostek says the sector, much like commercial space, is being driven by “outsiders with capital to spend.”
 
Consumers also deserve credit for taking what were dismissed as toys and demonstrating their commercial potential, particularly for aerial photography, Waters notes. “They provided a unique perspective on how to do things.”
The result: An explosion of R&D and commercialization, much of it driven by a passel of regional companies and institutions:
 
■ Boeing-subsidiary Insitu, based in the Columbia Gorge town of Bingen, has been regularly winning multimillion-dollar contracts from the military for its surveillance drones. The company has expanded its commercial products and services, set up a business unit specifically for that purpose and participated in a project with BNSF Railway to use drones to inspect rights of way in remote areas.
 
Aerovel, based in White Salmon and founded by Insitu alumni, has been developing drones small enough to be launched from a fishing vessel, to look for schools of fish. An Aerovel Flexrotor was used to provide aerial scouting of routes through the ice of the Beaufort and Chukchi seas for a workboat fleet retrieving mooring anchors.
 
■ Thanks to Insitu, the Columbia Gorge has developed a mini-cluster of drone-related companies like White Salmon-based 
Sagetech Corporation, which makes small transponders to identify and control military and civilian drones.
 
■ Bellevue-based Paccar was playing with remote-control technology at its Mount Vernon research center as far back as the 1990s. More recently, it showed at an annual meeting a video of a demonstration of maneuvering and parking a truck at a Walmart distribution facility. Its European subsidiary DAF was one of a half-dozen truck manufacturers participating in an on-highway test of platooning — a tightly spaced convoy of trucks in which the trailing vehicles are driverless.
 
■ Few industries have leapt into drone technology with the enthusiasm of agriculture. Washington State University’s Center for Precision and Automated Agricultural Systems in Prosser has multiple research projects underway, including using an eight-rotor octo-copter to monitor irrigation in vineyards.
 
■ If you’re going to have a drone industry, you might want to have people trained in their operation and maintenance. Green River Community College offers an associate’s degree in unmanned aerial systems and a certificate for UAV operators; Big Bend Community College in Moses Lake has launched programs in mechatronics, sensor analysis and flight operations.
 
■ The University of Washington’s College of Engineering, meanwhile, has its Autonomous Flight Systems Laboratory to “support advances in guidance, navigation and control technology” for UAVs, and to integrate the technology into flight mechanics and controls courses in the university’s Department of Aeronautics and Astronautics.
 
■ Tech-sector senior statesman Tom Alberg, cofounder and managing director of Madrona Venture Group, co-authored a widely discussed think piece proposing the devotion of part of Interstate 5 between Seattle and Portland to autonomous vehicles. “We cannot predict the specific adoption rate for autonomous vehicles, but we believe that widespread adoption of autonomous vehicles is inevitable and will be here sooner than most observers expect,” the essay says.
 
■ Alberg adds Madrona has been backing its belief in the coming of the drone/autonomous age with a significant investment in Bellevue-based Echodyne Corporation, which is developing small, lightweight radars that could be used in UAVs and autonomous vehicles.
 
Clockwise from left: Aerovel's Flexrotor is designed to operate over oceans and remote areas; WSU Professor Lav Khot
prepares to fly an octo-copter over a vineyard; an Autel Robotics drone equipped with WiBotic wireless power solutions.
 
A drone economy could well reshape businesses directly involved in the production or use of UAVs. Commercial real estate services firm CBRE recently issued a report on the impact of technologies including autonomous vehicles on its industry. Driverless trucks, for example, will increase the distance and hours those vehicles can operate, reducing costs. Supply chains will be able to operate with fewer but larger distribution centers, but those warehouses will have to be built to receive and deploy the new generation of autonomous delivery trucks.
 
The speed with which technologies are being readied for market is also one of the barriers to their adoption, as lawmakers and regulators scramble to keep up and deal with thorny practical issues like safety, liability and traffic management on the ground and in the air (e.g., how do vehicles and aircraft operate in the same space at the same time?), not to mention broader societal issues such as privacy and job gains and losses.
 
“The technology is going to be ready before the world is ready,” says Paccar President and CEO Ron Armstrong.
 
Mike Dozier, general manager of Kenworth, a Paccar subsidiary, says many of the technologies that make autonomous trucks possible have been showing up on trucks for years — lane-departure warning systems, drowsy-driver monitoring, even adaptive cruise controls that use GPS data to tell the engine to apply more power when the vehicle is approaching an uphill grade.
 
The truck is packed with data-generating sensors and equipment, for which costs have been steadily declining, adds Paccar SVP Kyle Quinn. The issue, Quinn points out, has been “how do you manage all the information coming off the sensors and interpret it?” 
 
Answer: creating breakthroughs in image processing and artificial intelligence. In other words, software is starting to catch up with the capabilities of hardware.
 
It may be some time before drivers are banished from the truck cab, the Paccar brass cautions. Drivers have duties beyond steering, accelerating and braking, such as securing the load and making sure it stays in place. They’re also needed to handle unexpected situations that autonomous systems aren’t sure how to manage.
 
Still, none of those barriers seem as daunting as what the commercial space business faces, and it’s been able to grow in spite of the challenges. Further, if regulators aren’t moving as fast as many advocates of drones and driver-free vehicles would like, they also aren’t saying, “No way.” 
 
For example, the Federal Aviation Administration issued its Part 107 compendium of rules in mid-2016 to govern use of commercial drones according to weight, speed, height, operator certification and other criteria. While it’s a long list, it does give those interested in the technology’s use some certainty. The FAA has also authorized research projects on flying UAVs beyond the operator’s line of sight, such as the Insitu-BNSF experiment.
 
The industry itself can do a lot to allay some of the safety fears of regulators and the public, Waters says, by “moving reliability from pretty high with top-of-the-line consumer devices” to commercial units with virtually no potential points of failure, and which have safety devices in place in cases of power loss or collision.
 
The technology also has the potential to mitigate problems it creates and solve others. Driverless trucks, for example, threaten the jobs of drivers. But the trucking industry has long been dealing with a chronic shortage of drivers; the American Trucking Associations reported the turnover rate at large fleets was 83 percent in the second quarter of 2016. And even as they eliminate jobs in some sectors, drones and other autonomous vehicles could create more in others. The FAA news release on approval of Part 107 says the new rules could help generate more than 100,000 new jobs in the next 10 years. 
 
Regulators and legislators will be under pressure to keep up with the explosion of applications. Forest fires can be monitored closely but safely. Insurance companies can inspect storm damage on homes — and transmit images to the home office — without sending an inspector onto a potentially precarious roof. Kostek, a resident of Seattle’s Green Lake neighborhood, came up with the idea of using drones to monitor the lake’s health. Farmers are already working with autonomous trackers guided by GPS. Underwater drones can inspect boat hulls. A local police department has used aerial drones to document auto accident scenes, allowing officers to reopen roads sooner.
 
Waters expects the boom to be even bigger in a few years, when companies now seeking  funding bring their products to market.
 
Kostek agrees. “We’re still early, early on as to how these technologies will be applied,” he predicts. “Somewhere, there’s a smart kid playing around with an idea none of us has thought of.”