Orthocell’s CelGro® study results open up new US market access strategy

Orthocell Ltd (ASX:OCC) has received positive results from a US 510(k) animal pilot study, indicating that CelGro® facilitates superior nerve regeneration when compared to the market-leading nerve repair device - restoring the sciatic nerve to a pre-injured state. As a result of this breakthrough nerve regeneration data, and in light of the previously released interim human clinical data, the company is evaluating the medical device US regulatory pathways to identify opportunities for expedited approval of CelGro® and the ideal route to the highest reimbursement value. Investors have responded positively with shares as much as 9% intra-day to A$0.56 while OCC's market cap is approximately A$97.4 million. "Superior product" Orthocell managing director Paul Anderson said: “CelGro® has shown to be the superior product for nerve regeneration when compared to the market-leading alternative.  “We are excited by the opportunity to provide patients access to this life-changing treatment.” Pilot study results  The company has completed the pilot stage of its 510(k) animal study to augment the repair of severed sciatic nerves in four rats in two separate study groups (CelGro® and an FDA approved nerve repair device) with outcome measures focused on the facilitation of nerve regeneration recorded at four weeks post-treatment.  The following post-operative results and handling characteristics were reported:  Nerve repaired with CelGro® exhibited no inflammation, scar tissue formation or fibro-adhesions. CelGro® integrated into the host epineurium (outer layer of connective tissue of the nerve), was remodelled into natural tissue, and at four weeks post-treatment, resembled the native sciatic nerve in appearance; and CelGro® had better handling properties in surgery. It was easier to cut to size, manipulate and position when wrapping around the injured nerve, and hydrated immediately upon contact with tissue fluid (no pre-soaking required). It was easier to suture to the epineurium.  Comparator nerve repair device  The FDA approved comparator was thicker and not easy to cut to the required size, rubbery in texture, required 15-30 minutes pre-soaking to hydrate and remained difficult to manipulate once hydrated. In addition, the comparator product was also hard to suture adding significant operative time to the surgery and nerves repaired with the FDA-approved comparator device showed significant inflammation with foreign body reactive giant cells, excessive fibro-adhesions to the surrounding soft tissue.  At four weeks post-treatment the sciatic nerve had not yet returned to its pre-injured state.  A breakthrough in nerve regeneration   The study results suggest that restoration of the damaged nerve to its pre-injured state can translate to faster and more predictable return of upper arm and hand function.  Notably, the previously released interim human clinical data, in patients with tetraplegia or paralysed upper limbs showed that nerve repair using CelGro® resulted in more rapid and consistent outcomes. In light of these study results (and the previously released interim human clinical data), Orthocell believes that CelGro® represents a breakthrough in nerve regeneration and is an important development in nerve repair surgery to return function to paralysed upper limbs and could empower surgeons, and ultimately improve the lives of more patients suffering from complex spinal cord or traumatic nerve injuries.   US regulatory and market access pathway  The company is on track to announce further clinical data from its CelGro® nerve regeneration human clinical study in Q2 2021, which focuses on the return of arm and hand function of all trial participants, measured at 12 months post-treatment.  This data will guide the company’s approach with FDA and US payers (Medicare, Medicaid, private payers and the Veteran’s Administration) to determine whether an expedited regulatory approval, pursuant to a ‘De Novo’ or ‘Pre-Market Approval’, is possible and what this will mean for reimbursement value for the product.  Anderson said: “Importantly, this evaluation of regulatory and reimbursement pathways position the company towards a more attractive reimbursement value increasing the market opportunity.”  Benefits of De Novo and Pre-Market Approval The currently planned 510(k) pathway for CelGro® is underpinned by an assessment of substantial equivalence to a predicate product (i.e a currently approved and marketed device such as that tested in the 510(k) animal study) and essentially caps the potential reimbursement value paid by private insurers, regardless of any additional patient or economic benefits delivered by use of the new nerve repair device.  The De Novo, Pre-Market Approval pathways and expedited programs will allow for increased interaction with the FDA and provide the opportunity for the company to gain standalone approval for a novel nerve repair device, based on the unique clinical benefit delivered by that device.  These pathways also allow the company to leverage the evidence generated in the studies to support FDA approval and maximise the value ultimately paid by US payers for the new product, rather than referencing the existing price for currently marketed products. This would potentially allow Orthocell to reap the benefit of the significant patient and economic advantages generated by using CelGro® in nerve repair applications - and take a larger, more profitable share of the nerve repair market.  Looking forward Orthocell will continue to assess the approval pathways available for CelGro®. Following finalisation of the CelGro® nerve regeneration human clinical study in Q2 2021, the company will engage with FDA to determine whether an expedited regulatory approval is possible and what this will mean for reimbursement value for the product.