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Bioactive wound healing, bioaesthetics and biosurgery: three pillars of product development

Geoff MacKayPresident & Chief Executive OfficerOrganogenesis, 150 Dan Road, Canton, MA 02021, USATel.: +1 781 401 1064

10.2217/17460751.1.2.169 © 2

Tissue regeneration specialist company Organogenesis Inc. was one of the first biotech companies formed. Incorporated in 1985, the company was originally a spin-off from a research program at MIT. For the first 10–15 years, Organogenesis was heavily research based, but then gradually moved into development. The company’s flagship product is Apligraf® – a living, bilayered skin construct with two FDA-approved indications: diabetic foot ulcers and venous leg ulcers. As Apligraf neared the market, it was necessary to ‘graft’ a manufacturing capability onto the company. As a consequence the company moved south from Massachusetts’s cradle of biotechnology to Canton, MA, USA. Having experienced many of the highs and lows that characterize the biotech industry, the company is now consolidating its position as a center of expertise in commercializing living, cell-based products. The company has now built a sales, marketing and reimbursement team with the unique skill set to integrate novel technology into the US healthcare system. President & Chief Executive Officer Geoff MacKay takes great pride in the leading role that Organogenesis is playing in ushering in the field of tissue regeneration. Here, he discusses with Regenerative Medicine’s Elisa Manzotti the ‘three pillars’ of the Organogenesis pipeline: bioactive wound healing, bioaesthetics and biosurgery. He focuses both on the rewards, and the trials and tribulations, of the commercialization of living cell-based technology.

How would you summarize Organogenesis’ expertise in the tissue regeneration field?Specifically, there are three elements that makeOrganogenesis’ know-how unique. First is ourability to build 3D living-cell constructs. One ofthe things the company will always be remem-bered for is obtaining the first FDA approval ofan allogeneic living cell therapy with Apligraf®.That not only changed what was initially sci-ence fiction into a proven science, but it transi-tioned the field into a commercial reality thatcan be judged in terms of finance fundamentalsrather than just the exciting nature of the tech-nology. That was our first milestone.

Second is the ability to mass produce a living-cell therapy – consistently, reliably and seam-lessly – when the physicians require the product.It’s one thing to build the recipe book inresearch; it’s another thing to mass produce. Itrequires a transition from research into processdevelopment and engineering in order to repli-cate at scale. So the second key milestone wasmastering the ability to mass produce living cell-based technology – a whole new skill set andmajor challenge.

The third area of expertise is the ability to com-mercialize our products. This is the most recent

achievement. There is often a tendency, particularlyin mainstream biotech companies, to take some-thing through R&D and then seek a partner tooutlicense the product. With cell-based technolo-gies, there really isn’t that ‘big brother’ to look to.The device companies are mildly interested, butthey’re not interested in changing their model, butrather taking something off the shelf and fitting itinto their own device model. This isn’t really possi-ble for cell-based technology. The pharmaceuticalcompanies are predominantly focused on smallmolecules at the moment, so they can’t really seehow this fits with their infrastructure. We were evenslow ourselves to recognize the importance of thisthird area. So that is the third key milestone – theability to build unique commercial competencies tosell, market, obtain reimbursement and distributeliving technology.

What products & therapeutic areasdo Organogenesis currently haveunder investigation?Firstly, as a privately held company, we discloseonly that which has entered clinical trials, so Ican’t talk about our research that hasn’t yet beenapplied to humans. But you can describe ouractive programs in terms of three pillars – bioac-tive wound healing, bioaesthetics and biosurgery.

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Bioactive wound healingMore than 120,000 patients in the USA have beentreated with Apligraf to date and we are expandingto other markets in 2006. We estimate that thisfigure represents approximately two-thirds of allpatients who have received living cell-based prod-ucts across any therapeutic field. Our goal is tointroduce the next-generation Apligraf in afew years time, using our self-assembly technology– a patented technology where our living cells cre-ate their own matrix/scaffold around them, ratherthan adding animal-derived collagen. That prod-uct is intended to eventually replace Apligraf.

‘...FDA approval of Apligraf®... not only changed what was initially science fiction into a proven science, but it

transitioned the field into a commercial reality.’

In November 2005, we received FDA clear-ance for a product called Fortaderm™, which isan acellular collagen scaffold that we have com-bined with different antimicrobials. The goal isto provide a scaffold over which cells migrate,but which at the same time provides an adequatezone of inhibition against bacteria. The chal-lenge was navigating a narrow therapeutic rangeso that it is effective but not cytotoxic. That is amore basic product in that it doesn’t contain liv-ing cells and it doesn’t deliver growth factors butit is a nice collagen biomaterial.

The final product in bioactive wound healingis for Achilles tendon, and that is also FDAcleared. The unique selling point is that it hasthe best strength-to-thinness ratio, which is veryrelevant in Achilles and is exactly what surgeonssay they are looking for to strengthen tendonrepair procedures.

BioaestheticsThe key product actively under investigation inthe second pillar of our pipeline – bioaesthetics – isRevitix™. This product is a mixture of multiplegrowth factors that have been formulated in such away that they are aesthetically pleasing. We areundertaking clinical trials to assess the efficacy ofRevitix in skin rejuvenation. The concept is rela-tively simple, i.e., that aged skin is wounded skin –wounded, for example, by pollution, the environ-ment and exposure to the sun. Delivering thesefactors in a continuous manner can help to restorethe cell communication balance and potentiallyhave an impact on hyaluronic acid, collagen andelastin production.

The second product in bioaesthetics leveragesour collagen biomaterial intellectual propertythat we developed in the 1990s when we wereworking on a vascular graft program. We havedeveloped a biomaterial that can persist in thebody for a very long time and eventually remodeland integrate with the patient’s own tissue. Theintended applications are plastic and reconstruc-tive tissue repair and support. We have com-pleted a 3-year pilot study that demonstrates theproduct is biocompatible with breast tissue anddelivers long-term support for breast tissue. Alarger clinical trial starts later in 2006. This ispotentially a large market, and represents a realclinical problem, not just an aesthetic opportu-nity. It is something that can actually serve anunmet medical need.

BiosurgeryThe easiest way to understand the third pillar– biosurgery – is to look at where syntheticbiomaterials or cadaveric tissues are used formultiple surgical applications and to simplyask the question ‘do they do the job or would anonsynthetic perform better or differently?’.The answers vary depending on the clinicalapplication. In some areas, such as herniarepair, the synthetics are working very well inmost cases but there are certain refractorycases where an acellular collagen biomaterialcan outperform. So the key is to identify andspecifically target where the patients can bene-fit. In other applications, sometimes a bioma-terial can be first-line – we have developedthese acellular biomaterials for a range ofapplications:

• Closure of the hole between heart chambers(patent foramen ovale) in association with ourpartner NMT Medical Inc.

• Rotator cuff surgery: an area we are focusingon with our partner Biomet

• Vaginal prolapse: we have just completed a100-patient study with the Cleveland Clinic

• Stress urinary incontinence is currently underlate-stage clinical evaluation.

So the idea is really to specifically engineer ourcollagen biomaterials to address clinical needsin which a synthetic is not performing ade-quately. The parameters we can adjust are thestrength of the product, persistency of theproduct and thickness. The product comeshydrated, ready for use. Once we understandthe clinical application we can engineer thebiomaterial to fit the application.

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The world of biosurgery is largely acellular atthe moment where the goal is to provide sup-port and repair and let the body’s own tissueeventually migrate in and around the area, toreplace the biomaterial. This will remain theconcept for our next-generation products, butin addition we aim to provide living cells aswell, thus providing that strength and repairbut also stimulation of the healing process.

‘We have developed a biomaterial that can persist in the body for a very long

time and eventually remodel and integrate into the patient’s own tissue.’

You became CEO of Organogenesisin late 2003 after spending 10 yearsat Novartis. How did you findthe transition?It certainly is a transition. There is no betterplace than Novartis to learn all of the individ-ual skills that are required in the healthcareindustry. I was able to develop cross-func-tional expertise in sales and marketing, healthpolicy, finance and medicine. The company isexcellent at training and personal develop-ment, and the multicultural nature of a globalcompany is exciting. I worked in Canada,USA and Europe, which contributes to a wellrounded education. What is different, andwhat took a little bit of adjustment, is goingfrom a company with more than 80,000employees to one with 200. In fact, at the timeI joined Organogenesis there were only 60 or70 staff.

Most of what you learn in a large organizationis relevant and applicable in a small company butit needs to be dramatically simplified to come upwith pragmatic solutions. With any major phar-maceutical company, there is always the ‘mothership’ present, with all of the associated massiveefficiencies, the scale, the standard operatingprocedures and the professionalism. In a smallcompany there is no safety net and there are noguidelines. So the leadership team must reallythink for themselves and navigate the stormyweather on their own. The benefit, however, isthat you can turn on a dime – you can react veryquickly and the people, who are 110% focusedon the business, guide the ship rather than tryingto influence a much broader organization.

What were the major factors that enabled you to successfully turn round Organogenesis from a ‘bankrupt Chapter 11 company’ into the profitable company it is now?We faced the usual complexities of a turnaround: getting our costs under control, narrow-ing our focus and driving up top-line sales. Youcan look at this in the greater context and ask thequestion: how many examples are there of aproven, successful best-in-class technology inhealthcare that has somehow not managed tosucceed? I can’t personally think of one. With theApligraf flagship product, the technology wasproven and was FDA approved, yet the productwas captive of a business model that didn’t makesense. The technology was sound, it was late-stage, and approved by the FDA for multipleindications, so clearly from a patient-need per-spective, the product deserved to be available.When assessing the opportunity, I spoke to opin-ion leaders both in the USA and elsewhere todetermine how they perceived the medical need.The response was that the technology definitelydeserved to be put in place. So the question was,how to make the business model work, and thisrequired some specific steps.

First, we had to amicably divorce Novartisbecause our interests were no longer aligned.They had refocused away from the areas ofwoundcare, xenotransplantation, gene therapyand tissue engineering, so the involvement ofNovartis would have forever held back Organo-genesis. Second, manufacturing had to bebrought under control in terms of cost and alsoreliability – the cost to produce this living tech-nology had to be cut substantially. We alsoneeded to deliver total reliability to the customer.

Figure 1. Organogenesis’ focus.

Cells

Cellcommunicators

Matrix

Tissue regeneration

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Figure 2. Bioactive w

Fortunately, in the early days, the physicianswere remarkably resilient. They would call andask for the product; sometimes we could provideit and sometimes not. So manufacturing clearlyneeded a complete overhaul.

In the USA, Medicare pays for two-thirds ofcustomers’ reimbursement. The level of reim-bursement for Apligraf was such that the ‘forprofit’ woundcare centers couldn’t justify usageof the product. So Medicare rates had to befixed. Finally, the top-line revenue of Apligrafhad to go up very quickly. This task was given asubstantial boost when more than 30 people quitNovartis to follow their passion for tissue regen-eration and joined Organogenesis.

‘You can look at this in the greater context and ask the question: how many

examples are there of a proven, successful best-in-class technology in

healthcare that has somehow not managed to succeed? I can’t

personally think of one.’

Another factor is that our board of directorswere very consistent and very clear with theobjective – they want to build a great company as

opposed to dressing up assets for sale. So that ena-bled us to chart a path to address these challengesone by one over the past 3 years.

What is the company’s strategy in commercializing tissue regeneration?The strategy for commercialization is interesting.In terms of the intellectual property (IP) we havegenerated over the last 20 years, we have manyassets. One of the key challenges was betting onwhat to continue to develop and what to investfurther and commercialize. We assessed ourassets using three different filters:

• What are we passionate about?

• What can we make money on?

• Where do we have the competencies to be thebest in the world?

Where these three intersect is where we decidedwe would invest fully and commercialize our-selves. The result was that some very excitingareas where we hold significant IP (e.g., cornearegeneration, pancreatic islet cells and liver-assistdevices) were identified as outlicensing opportu-nities. In three remaining areas that we feel pas-sionate about – bioactive wound healing,biosurgery and bioaesthetics – we believe that wecan make money and be the best in the world.The final hurdle is deciding which ones to carrythrough all the way to sales and marketing.Given the size of the company, we have to applytwo further filters:

• Is our technology really best in class?• How large is the target audience?

If the product is not indisputably best in class,then we won’t take the risk. Certain marketswould just be too large for a company such asours. An example would be the development of aproduct for hernia, as there are more than 50,000general surgeons across the USA alone. So we areinterested in those areas where there are manage-able numbers of specialized physicians that wecan target specifically. Our tissue regenerationspecialists can then work closely with them andteach them how to use the technology.

Certain areas, as I have mentioned, are clear-cutcandidates for outsourcing. In wound healing, wehave developed the unique competencies to com-mercialize ourselves, so we are not looking to out-license within that portfolio. Within bioaesthetics,the decision will be dictated by the results of aclinical trial due in April 2006. This is an extensivepilot study with quantitative biopsy end points ofour lead product, Revitix, coordinated by

ound healing.

Apligraf Human skin

Bioactivewound healing

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researchers at the University of British Columbiaand Harvard University. Should those resultsprove positive, it may trigger us to establish ourown commercial presence because then we couldanswer the question: are we best in class? In bio-surgery, we have developed acellular collagen bio-materials for certain areas, including rotator cuffsurgery and procedures for Achilles tendon, vagi-nal prolapse and urinary incontinence. Those arealmost all outlicensing opportunities because, inthis instance, we feel that the specialized surgicaldevice companies could fit these technologies intotheir portfolios and do a better job than we could.We have cellular biomaterials in development –they are a few years away yet – and when theycome, they may trigger a different decision interms of commercialisation, but we will certainlyoutlicense for acellular products.

What are the challenges in bringing such a new technology to market?From a financial perspective, one of the majorchallenges is regaining the confidence of theinvestment community. This is because, whilstall the science has been very exciting, the finan-cial return has been lacking with virtually everyproduct in the class, which has led to some dis-enchantment in the financial community. Orga-nogenesis hopes to help turn the tide in thisrespect by presenting the first profitable businessmodel in living cell-based therapy.

Other challenges exist at every step of the way.R&D companies often focus on the FDA as themajor hurdle, but when that is overcome, theyrealise that there are many more ahead. The chal-lenges are really incremental. Once a product hasbeen discovered and properly researched, thenyou meet the challenge of scale-up. To be able toconsistently reproduce living cell technology atscale presents a whole set of challenges in itself interms of process development and process engi-neering. Furthermore, to do this in a way thatmakes economic sense is a huge hurdle.

In terms of regulatory issues, the FDA has agrowing body of experience in regulating suchproducts. So finally the rules are quite clear. InEurope they are becoming clear, but we are notthere yet. There are significant challenges in clin-ical development because you are studying atechnique as well as the product itself, and howthe clinician or surgeon applies the product canhave great impact on the clinical results. In addi-tion, sometimes these studies cannot be blinded,so we have to work very closely with the regula-tory agencies to devise specific methodologies.

The overall challenge is that we require a differ-ent skill set from those of the medical device andpharmaceutical companies. While skills overlap,the approach is really just to break down each oneof these functions and determine, based on a par-ticular business model, what the challenges are.We need to identify the gap that lies between whatwe have now and where we want to be and howwe close that gap. The business models in tissueregeneration are evolving and it’s not a one-size-fits-all model, for example, whether it is an autol-ogous model or an allogeneic model will have ahuge impact on how a company is built.

How does a company like Organogenesis develop the sales infrastructure and visibility to maximize the commercial potential of its products?If what we were trying to sell was a betterβ-blocker, a pharmacologic with limited differen-tiation, then I think it wouldn’t be possible forOrganogenesis to compete. But because we arethe leading living cell-based company, this hasallowed us to carve out a unique space in theminds of the customers. We have recently vali-dated that position by performing extensive mar-ket research in the USA within the surgicalcommunity. Among these specialists Organogen-esis was perceived to be the leading tissue regener-ation company, committed to clinical outcomeand evidence-based product development. Theminds of physicians are very crowded with allkinds of different therapeutic options and phar-macological opportunities – the good news forpeople in this field of tissue regeneration is thatwe are unique and we stand out in certain clinicalapplications. Where a finite number of surgeonsor physicians use a particular product, they aremore than willing to work with a mid-sized tissueregeneration company as opposed to a majorpharmaceutical or device company.

What challenges did you face in gaining marketing approval for mass-manufactured medical products containing living cells?I would hope that the challenges that we faced ingaining approval would not all be replicated forothers. We acted as pioneers at every step of theway – we worked with the FDA to create policyand also with Centers for Medicare and MedicaidServices (CMS Medicare) to resolve reimburse-ment issues. We also had no distribution models tofollow. We had to invest approximately $400 mil-

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lion to blaze the trail. While it was money wellspent, I’d hope that wouldn’t be the model forother companies in future.

The main challenge for companies followingin our footsteps will be the decision, up front, onwhat business model they require. They will needto be very introspective regarding what they havethe competence to achieve. Also, people tend toautomatically look for a partner but, in fact, mostpartnerships fail. In most cases the junior part-ners – the biotech partners – are dissatisfied bythem. This usually happens because the parties’interests are no longer aligned and the larger part-ner is juggling multiple opportunities and thushaving problems with focus. Where companiesdo need to look for a partner, it is not really a caseof ‘bigger is better’, it is more ‘smarter is better’,with focus and complete commitment to thetherapeutic field being vital.

After failing to win US regulatory approval for its use in treating venous leg ulcers, Smith & Nephew are putting their Dermagraft business up for sale. What impact do you think this will have?For Organogenesis, this will be both a positiveand a negative thing. I think that the positivewill be a short-term blip in sales. In 2005, Apli-graf was outselling Dermagraft four-to-one interms of patient share. This was one of the keyfactors in Smith & Nephew’s decision. So somephysicians and patients will have to change treat-ment modalities, but not a huge number.

On the negative side, there is one less profes-sional and dedicated company trying to intro-duce this type of technology. Our mission atOrganogenesis is to make tissue regeneration thestandard of care for the patients that deserve it,and that’s clearly much easier when there aremore dedicated companies. For example, even atthe level of, say, the medical congress, there willnow be only one, rather than two, companiespresenting the benefits of this cell-based technol-ogy at satellite symposia. I believe that Smith &Nephew remain committed to tissue regenerationin orthopedics and other applications, but theyhave just divested this technology in woundcare.

What advances can we expect to see in the longer term – say, in a 10-year timeframe?When I entered this field 10 years ago, whatwe predicted in that timeframe was thatxenotransplantation would be a reality, thatgene therapy would be a reality and that veryintricate 3D tissue engineering of organswould be commonplace. Clearly, we havemissed those targets, although there has beenremarkable progress in the field. It just high-lights the fact that 10 years in medicine is actu-ally not a long time. We have been a little over-ambitious in our predictions, but a lot ofthings are now going very well, which suggeststhat we will be in a very different place 10 yearsfrom now.

There are two key barriers that have heldback tissue regeneration. First, immunology –whether it is research in tolerance or whether itis safer immunosuppressant cocktails, I believethat, one way or another, we will get around thebody’s own immunological reactions for at leastsome therapeutic applications. The second hur-dle has been the lack of vascularization in themore complex tissue regeneration products. Infuture, more elaborate, thicker tissue regenera-tion constructs should be possible and will beable to be vascularized, most likely throughmicrovascular holes in the constructs. Suchadvances will allow the community to think inmore ambitious terms.

‘One other issue I see in my crystal ball is that in 10 years’ time the financial

community will have learned to like us again.’

Human collagen biomaterials will play agreater role in tissue regeneration, rather thanxeno-derived sources. Cell therapy automationwill also really change the field, with improvedreliability and cost–effectiveness.

One other issue I see in my crystal ball is thatin 10 years’ time the financial community willhave learned to like us again. I expect Organo-genesis to play a major role in addressing thislast point.

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