VeriChip Shares Soar On Alzheimer's Microchipping

Shares of VeriChip Corp., which makes implantable locating and identification devices, soared recently on reports the company's VeriMed identification chip will be used for consenting Alzheimer's patients at a Florida adult care facility. The stock gained $1.17, or 27 percent, to reach $5.50 in afternoon trading. Shares have traded between $4.27 and $6.99 over the last 52 weeks. The VeriMed chip, approved by the Food and Drug Administration in 2004, is only part of the company's business. Revenue mainly comes from what are called active radio frequency identification devices, such as bracelets placed on both mother and newborn child while in the hospital to avoid mix-ups and even kidnappings. The company also sells devices used to track patients with dementia. But the company is now making a large investment of time and money on its passive technology, or the VeriMed chip, with the view that it could become part of total care for patients with chronic conditions. Unlike the active technology, the chip, implanted just beneath the skin on a patient's arm, is dormant until scanned using a hospital-based reader to extract the medical data. The chip costs about $200 to install, plus between $20 and $80 annually, depending on the amount of information on it. It is not yet covered by insurance carriers, something the company hopes to achieve as it continues to collect ongoing post-approval studies and opinions by third-party advocates, such as the National Kidney Foundation. Meanwhile VeriChip has been installing the scanners free, leaving hospitals with only the expense of training staff. In all, 130 hospitals are using the technology, with 600 having signed on for installation. The markets mostly impacted are Boston, northern New Jersey and Washington D.C.