Regenerative medicine gets on a profitable roll - Medical Design and Outsourcing

After getting off to a false start in the 1990s, the field of regenerative medicine has been reborn over the past decade.

Now, several New England companies are showing that regenerative medicine — generally defined as therapy that uses living cells to repair the body — is more than just promising science. It can also be profitable.

“Regenerative medicine is certainly an industry that is very commercially viable,” said Lee Buckler, managing director at Cell Therapy Group, a regenerative medicine consulting firm in Vancouver, B.C. “But it’s been a long and arduous path.”

Probably no company knows that better than Canton-based Organogenesis Inc. The company achieved a major milestone for the field of regenerative medicine in 1998 when it won U.S. Food and Drug Administration approval for Apligraf, a cell-based product that helps to heal venous leg ulcers and diabetic foot ulcers.

But four years later, the company was in bankruptcy court after failing to overcome numerous challenges, such as finding a cost-effective way to produce and transport the product; getting enough adoption from health-care providers; and getting proper reimbursement rates.

Organogenesis, which re-launched in 2004, has now solved those issues and became profitable around 2008, said CEO Geoff MacKay. Some of the issues simply took time to figure out — trial and error — while it also took time for the health-care system to become familiar with the novel treatment, MacKay said.

To date, 250,000 patients have been treated with Apligraf, and the company is now in the middle of a $60 million expansion of its manufacturing facilities in Canton. The new facilities are expected to open in late 2013.

MacKay refers to the current stage as “round two” for both his company and for regenerative medicine as a whole. “We still have the great science, but we’re able to build a business measured on revenue growth and profitability,” he said.

And as more companies are able to base their businesses on financial fundamentals and not just science, that will spawn greater confidence among investors in the field, MacKay said.

Another New England company is turning regenerative therapy into profits, Buckler said. Westport, Conn.-based Advanced BioHealing Inc. has commercialized a bio-engineered skin substitute, Dermagraft, used to treat diabetic foot ulcers.

Meanwhile, Cambridge-based Pervasis Therapeutics Inc. is on track to have its first product on the market by 2014, said CEO Fred Chereau. The product, Vascugel, is a cell-based therapy that aims to enhance blood vessel repair. The product recently won the go-ahead from the FDA to begin Phase 3 clinical trials, which Chereau said should start by the end of the year.

“The world has been talking about regenerative medicine for a long time, and there have been many ups and downs,” he said. “But now I think we are at the edge of seeing success popping up.”

Pervasis, founded in 2004, has raised $46 million in venture capital from investors including Flagship Ventures and Polaris Venture Partners. After receiving final FDA approval for the product, hopefully in 2012, Pervasis intends to partner with a major biotech or pharmaceutical company to bring the product to market, Chereau said.

At Organogenesis, the next product in the pipeline is a therapy for the regeneration of oral soft tissue. The product, known as CelTx, finished Phase 3 testing last year and is awaiting FDA approval. The company hopes to get the top 40 or 50 leading clinicians in the U.S. to adopt the product first, before seeking broader adoption, MacKay said.

Other therapies that fall within the category of regenerative medicine are not as close to commercialization. Therapies using stem cells to repair nerve or cardiac damage are heavily researched and in high demand, but they’re also far from ready, said George Annas, chair of the Department of Health Law, Bioethics and Human Rights at Boston University.

“This is a very important research area, and has a lot of promise,” Annas said. “But it’s a long ways away — at least a decade I would guess.”

Still, many signs are positive for the field overall. Regenerative medicine companies crossed the threshold of $1 billion in total revenue in 2008, Buckler said, and there are a large number of cell-based therapies in Phase 2 or Phase 3 trials currently. “There’s a great misconception that all of this is still in the research phase,” he said.

This new generation of therapeutics, Buckler added, “has the potential to change medicine — it has the potential to be curative” for many devastating diseases. “That’s the promise here that we have to live up to yet.”

Regenerative Medicine Companies

Organogenesis Inc.

Location: Canton

CEO: Geoff MacKay

Technology: Cell-based products used in bio-active wound healing and bio-surgery.

Website: http://www.organogenesis.com

Founded: 1985

Advanced BioHealing Inc.

Location: Westport, Conn.

CEO: Kevin Rakin

Technology: Living cell therapies that repair damaged human tissue and enable the body to heal itself.

Website: http://abh.com/