PERTH, Australia – Australian regenerative medicine company Orthocell Ltd. got the validation it needed to move from being a small little-known Western Australian biotech company to move to the global stage via a research collaboration with Depuy Synthes Products for its Ortho-ATI stem cell technology for regenerating tendons and ligaments.

Facilitated by Johnson & Johnson Innovation, the collaboration also catapults Depuy into the stem cell business, where it has the opportunity to marry its orthopedics business with the power of biologics.

Orthocell CEO Paul Anderson told BioWorld Today that most large orthopedics companies "are busting to get into the biologics space," he said.

"That's where J&J Innovation has the game-changing innovation, and Depuy has the mechanism and the capacity to deliver," he added. The CEO explained that medical devices can only stabilize tendons, but they don't address the underlying pathology, which has led to large revision rates for orthopedic devices.

New cell technologies pair up nicely with that device niche because the technology enables device companies to expand their portfolios to include regeneration of tendons with the nuts and bolts of their devices.

"The concept of this technology is to help to prevent surgery or to heal tendon injuries that don't require surgery yet and to assist in the healing of postsurgical tendon repairs," Anderson said. "It's one of the first approaches that actually addresses the pathology of the tendon. Tendon cells die when they degenerate and they fail to heal, so it actively replaces the body's cells that then re-form human tendon."

To date, the company has successfully commercialized two autologous cell therapies for treating damaged and degenerated tendons (Ortho-ATI), as well as damaged and degenerated cartilage (Ortho-ACI). Ortho-ATI is available in Australia and New Zealand for patients who have failed conservative treatment options such as corticosteroid injections and exercise programs and have ongoing symptoms. More than 300 patients have been treated with each therapy so far.

The Ortho-ATI intervention uses a patient's own tendon progenitor cells to stimulate the formation of collagen and other connective tissue elements. Those cells are taken from the tendon and cultured in a GMP facility in Western Australia where the volume of cells is expanded and then injected back into the patient via an ultrasound-guided method.

In clinical trials, the stem cell therapy has shown significant pain reduction and functional improvement in a range of different tendons. Clinical data at up to five years post intervention continue to demonstrate significant improvement in pain relief and function.

For example, a group of tennis elbow patients saw a 207 percent improvement in their grip ability after four years of initial treatment.

"We've shown that patients require the treatment, that doctors will prescribe the treatment, that patients will pay and there's been positive clinical data," Anderson said. "From a technology perspective, we've de-risked this technology and validated the market, which allows us to engage heavily on a global stage."

The collaboration with Depuy is expected to begin in this quarter. J&J is paying for the study, and Orthocell is running the study. J&J gets first rights to look at the data.

"This proof-of-concept study will lead us to the big study in the U.S., and we've been looking for a partner, so this is exactly what we were looking for. We're confident that we'll see huge differences in the cohorts," Anderson said.

He said indications could not be disclosed until the study is announced but it is in the area of tendon regeneration.

MORE COLLABORATIONS LIKELY

Although the initial research collaboration is with the Ortho-ATI product, Anderson said he has also been in discussions with Depuy's biomaterials group, and he wouldn't be surprised to see another collaboration for Orthocell's collagen scaffold product, Celgro.

The company is readying Celgro for registration for the repair and reconstruction of soft tissue injuries, such as tendon tears and guided bone regeneration in dental and orthopedic applications.

The scaffold was originally designed to deliver cells into patients as a delivery mechanism, but it has proved to be unique in that it has strong biomechanical properties, as well as cell carrying abilities and it works well with endogenous cells that are inherent in the body.

Anderson said the scaffold is applicable across a broad range of clinical specialties such as nerve, cartilage and bone repair, and Orthocell is actively involved in clinical studies across all those areas.

He said that everything the company has learned over the last two years will be rearticulated back to J&J.

"They want to know more about us and we want them to know more about what we've got," he said. "We treat tendons all over the body, so we're confident that this will move into other areas.

"When we sat down five years ago and talked about who would be the ideal partner for us, we shot for the top," Anderson said, noting that the deal was two years in the making. He said J&J Innovations approached him at a biotech investment meeting two years ago and wanted to hear more. J&J conducted a deep dive into the company's data, and Anderson said it was "a great process for us as a young company."

"That external validation has excited a lot of people because that cultural cringe we have in Australia has been negated because the first regenerative company J&J chose is from Perth.

"We're not a medical device company; we're a regenerative medicine company. Unlike many of the other companies on the market that have developed collagen scaffolds or other synthetic scaffolds . . . ultimately, it's the cellular interaction and the tissue integration that speaks to the quality of the tissue repair and regeneration."

He said the company is already at the point where the technology can be packaged up and brought to the U.S.

Founded in 2006, Orthocell received some seed funding in early 2007, and had a series of small capital raises leading up to its ASX listing in August 2014, in which it raised A$8 million (US$6 million) in an oversubscribed IPO (ASX:OCC).

In December, Orthocell announced another capital raising of A$4 million from new and existing investors in Australia and Hong Kong. The company has a market cap of A$35.2 million.