Can BioMimetic Regain Its Footing?

BioMimetic Therapeutics 05132011 2

Regenerative medicine, an innovative medical therapy that enables the body to repair, replace or restore damaged tissues or organs, holds great promise for orthopedic surgery. Platelet-derived growth factors or PDGFs are the body's principal agents to stimulate and direct healing and regeneration.

When a person is injured, platelets (blood cells involved with clotting) get activated and PDGF is released, triggering a number of critical events essential for the initiation of musculoskeletal tissue repair. With the advancement of medical technology in the treatment of orthopedic injuries, the orthopedic and sports injury industry is in the early stages of transition from the use of traditional, passive, highly invasive metallic devices to more advanced, bio-active devices.

Amid the backdrop of increasing advancements in the field of injury management, let's take a look at BioMimetic Therapeutics Inc. (BMTI) , a biotechnology company focused on developing protein therapeutic-device combination products, which helps kick start the tissue regeneration process.

BioMimetic's technology incorporates rhPDGF-BB (recombinant human platelet-derived growth factor), a potent version of one of the body's natural key stimulators of tissue repair. rhPDGF-BB is a synthetic copy of a naturally occurring protein PDGF (Platelet-Derived Growth Factor).

The company's lead orthopedic product candidates are Augment Bone Graft, Augment Injectable Bone Graft and Augment Rotator Cuff Graft, which are being tested in multiple orthopedic indications , including the treatment of foot and ankle fusions, the stimulation of healing of fractures of the wrist, and the surgical treatment of rotator cuff tears.

The Augment Bone Graft is a combination product consisting of 2 components - a therapeutic protein becaplermin or recombinant human platelet-derived growth factor BB (rh-PDGF-BB) in a solution of 0.3 mg/mL in 20mM USP sodium acetate buffer and a bone matrix of beta tricalcium phosphate (ß-TCP) in granule particulate form.

The drug-device combo is being developed as the first fully synthetic alternative to autograft for use in hindfoot and ankle fusion surgery. Autograft involves the surgical harvest of bone from one part of the body and applying it to the primary surgical site.

According to BioMimetic, Augment Bone Graft eliminates the need for a second surgery to harvest autologous bone, therefore there is no donor site morbidity (e.g. pain, infection, etc.)

In Canada, Augment Bone Graft won regulatory approval in November of 2009. BioMimetic shipped its first order of Augment Bone Graft to its Canadian distributor, Joint Solutions Alliance Corporation, a sales and distribution company for orthopedic products headquartered in Burlington, Ontario, Canada. Accordingly, $78 thousand in revenue from product sales of Augment was recorded in December 2009. Product sales were a mere $14.7 thousand for the whole of 2010 while it significantly improved to $76 thousand in the first quarter of 2011 alone. Given the limited market for Augment in Canada, the company's product sales revenues have also been limited to date.

To bolster the commercial adoption of Augment in Canada, the company has made a transition from a single exclusive distributor to a network of independent sales agents.

The company filed its PMA (Premarket Approval) application for Augment Bone Graft last May. An FDA panel, which reviewed the company's PMA on Thursday voted 12-6 in support of the safety of device for use as an alternative to autograft in hindfoot and ankle fusion procedures. The panel also voted 10-8 that Augment Bone Graft demonstrates a favorable benefit to risk profile for the same indication.

The positive FDA panel recommendation for Augment Bone Graft comes despite FDA staffers raising concerns about the device's safety and effectiveness, including the tumor promotion potential.

The FDA is expected to make a final decision on BioMimetic's Augment Bone Graft within the coming six months. If approved by the FDA, Augment Bone Graft would be the first, new recombinant protein technology for orthopedics to enter the market in nearly a decade and the first and only cost-effective fully synthetic bone growth factor replacement for autograft, says BioMimetic.

According to market research reports published in 2010, the osteobiologics market accounted for $1.5 billion of revenue in the United States alone. This segment is estimated to grow at a compounded annual rate of 8%, resulting in a projected market size of $2.3 billion by 2015.

The company recently submitted a device application for approval of Augment Bone Graft to a European regulatory agency. A decision is expected in 2012. BioMimetic will seek a CE Mark in Europe, which is designed to provide a single marketing approval for all countries in the European Union.

And now for the other product candidates...

In early 2011, BioMimetic initiated patient enrollment in its North American pivotal trial evaluating its orthopedic product candidate - Augment Injectable, in hindfoot fusion indications. The study is expected to enroll about 200 patients at approximately 25 institutions and be fully enrolled around the end of this year. The PMA filing will be submitted with the final 12 month data.

Late last year, a pilot clinical trial was initiated to assess the safety and clinical utility of sports medicine product candidate Augment Rotator Cuff Graft for the repair of large rotator cuff tears. The trial is expected to enroll up to 30 patients.

Shares of BioMimetic have lost more than 30 percent since the beginning of the month. Pending the FDA panel meeting yesterday, trading was halted and BMTI closed Thursday's trading at $9.20.

BioMimetic has a lot riding on the regulatory approval of its investigational bone graft device. Wedbush Securities analyst Greg Wade expects Augment Bone Graft to generate annual sales of $370 million in 2015.

Now that the product candidate has crossed the penultimate regulatory hurdle - with the FDA panel voting to recommend approval, but by a slim margin, it remains to be seen how the final decision on this drug-device combo will turn out to be. The FDA is not required to follow the panel's recommendation, though it usually does.

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