Tissue engineering9

Human Tissue Engineered Products –
Today's Markets and Future Prospects
Final Report for Work Package 1:
Analysis of the actual market situation – Mapping of industry and
products
Dr. Bärbel Hüsing
Dr. Bernhard Bührlen
Dr. Sibylle Gaisser
Fraunhofer Institute for Systems and Innovation Research
Karlsruhe, Germany
April 28, 2003

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Table of contents
Page
List of tables.............................................................................................................. v
List of figures.........................................................................................................viii
1. Terms of reference ............................................................................................ 1
2. Methodology applied......................................................................................... 3
2.1 Definition of tissue engineering....................................................... 3
2.2 List of tissue engineering companies ............................................... 3
2.3 List of tissue engineering products on the market and in
clinical trials ..................................................................................... 4
2.4 Market volumes................................................................................ 4
2.5 Interviews......................................................................................... 5
3. Market volumes for tissue engineering ........................................................... 6
3.1 Overview of potential applications .................................................. 6
3.2 Challenges in estimating market volumes in tissue
engineering....................................................................................... 6
3.2.1 Characteristics of tissue engineering................................................ 6
3.2.2 Purpose of market estimations ......................................................... 6
3.2.3 Sources of information for market estimations................................ 6
3.2.4 Consequences for market estimations in this study ......................... 6
3.3 Actual sales and potential market volumes...................................... 6
3.3.1 Actual sales ...................................................................................... 6
3.3.2 Potential market volumes................................................................. 6

ii
4. Tissue engineered skin products...................................................................... 6
4.2 Overview of important companies and products.............................. 6
4.2.1 Treatment of full-thickness burns .................................................... 6
4.2.2 Treatment of chronic wounds........................................................... 6
4.2.3 Aesthetic surgery, cosmetic dermatology ........................................ 6
4.2.4 In-vitro human skin models.............................................................. 6
4.3.1 Actual sales of tissue-engineered skin products............................... 6
4.3 Factors influencing the market situation .......................................... 6
5. Tissue engineered cartilage products .............................................................. 6
5.3.1 Actual sales of tissue-engineered cartilage products........................ 6
6. Tissue engineered bone products..................................................................... 6
6.3 Potential market volumes................................................................. 6
7. Tissue engineered cardiovascular products.................................................... 6
7.1.1 Heart valves...................................................................................... 6

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7.1.2 Blood vessels.................................................................................... 6
7.1.3 Myocardial infarction....................................................................... 6
7.2 Overview of companies and their R&D activities ........................... 6
7.2.1 Heart valves...................................................................................... 6
7.2.2 Blood vessels.................................................................................... 6
7.2.3 Myocardial infarction....................................................................... 6
7.3 Potential market volumes................................................................. 6
7.3.1 Prevalences and incidences for cardiovascular diseases.................. 6
7.3.2 Market figures related to CVD......................................................... 6
8. Tissue engineered organs.................................................................................. 6
8.1.1 Tissue-engineered pancreas for the treatment of Diabetes
mellitus............................................................................................. 6
8.1.2 Bioartificial liver assist devices........................................................ 6
8.2.1 Tissue-engineered pancreas.............................................................. 6
8.2.2 Bioartificial liver assist devices........................................................ 6
8.3 Overview of potential market volumes ............................................ 6
8.3.1 Overview of organ donation and organ transplantation
internationally................................................................................... 6
8.3.2 Diabetes mellitus.............................................................................. 6
8.3.3 Acute hepatic failure ........................................................................ 6
9. Tissue engineered CNS products ..................................................................... 6
9.3 Overview of potential market volumes ............................................ 6
10. Characterization of the tissue engineering industry...................................... 6

iv
10.1 Structure of the tissue engineering industry..................................... 6
10.1.1 Europe .............................................................................................. 6
10.1.2 USA.................................................................................................. 6
10.1.3 Common features of the European and US-American
tissue engineering industry............................................................... 6
10.2 Differences between Europe and the USA....................................... 6
10.2.1 Science and technology base............................................................ 6
10.2.2 Companies........................................................................................ 6
10.2.3 Regulatory situation ......................................................................... 6
10.2.4 Market .............................................................................................. 6
10.3 Business models and business strategies.......................................... 6
11. Overview of tissue engineering products on the market and in
clinical trials....................................................................................................... 6
11.1 Skin products.................................................................................... 6
11.2 Cartilage products ............................................................................ 6
11.3 Bone products................................................................................... 6
11.4 Cardiovascular products................................................................... 6
11.5 Tissue engineered organs ................................................................. 6
11.6 CNS products ................................................................................... 6
11.7 Miscellaneous products.................................................................... 6
12. Cited Literature................................................................................................. 6

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Table 3.1: Revenue from tissue engineering products, cell therapies
and biomolecules 1997................................................................ 6
Table 3.2: Overall potential market for tissue engineering............................... 6
Table 3.3: Potential US markets for tissue engineering and organ
regeneration products 1999......................................................... 6
Table 4.1: Sales figures for selected tissue engineered skin products............... 6
Table 4.2: World wound management sales market and its segments.............. 6
Table 4.3: Maximum market potential for tissue engineered skin
products worldwide/USA............................................................ 6
Table 4.4: Realistic market potential for tissue engineered skin
products for the treatment of chronic wounds, model
calculation for Germany.............................................................. 6
Table 5.1: Sales figures of autologous chondrocyte implants........................... 6
Table 5.2: Overview of frequencies of cartilage defects................................... 6
Table 5.3: Market sizes correlated with cartilage defects/cartilage
repair ........................................................................................... 6
Table 6.1: Comparison of different bone repair approaches ............................. 6
Table 6.2: Sales 2002 of bone products by tissue engineering
companies.................................................................................... 6
Table 6.3: Market for bone replacement and repair .......................................... 6
Table 7.1: Global heart valve market 2001 ....................................................... 6
Table 8.1: Artificial and bioartificial liver assist devices with clinical
experience ................................................................................... 6
Table 8.2: Overview of organ transplantations (absolute numbers) in
2001............................................................................................. 6
Table 8.3: Overview of organ transplantations in 2001 (numbers per 1
mio. inhabitants).......................................................................... 6
Table 8.4: Organ donations in selected countries in 2001................................. 6
Table 10.1: Tissue engineering companies in Europe......................................... 6
Table 10.2: Overview of tissue engineering companies in European
countries...................................................................................... 6
Table 10.3: Categorisation of SME European tissue engineering
companies according to employee numbers ............................... 6

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Table 10.4: Economic parameters for contemporary tissue engineering
(2001).......................................................................................... 6
Table 10.5: Sector analysis of tissue engineering companies in the
USA 2001.................................................................................... 6
Table 10.6: Differences in the regulatory situation in the USA and the
EU ............................................................................................... 6
Table 10.7: Business models for pharmaceuticals, medical devices and
tissue engineering products......................................................... 6
Table 11.1: Skin products of European companies............................................. 6
Table 11.2: Skin products of US companies ....................................................... 6
Table 11.3: Clinical trials on skin products of European and US
companies.................................................................................... 6
Table 11.4: Autologous chondrocyte transplantation products of
European companies ................................................................... 6
Table 11.5: Autologous chondrocyte transplantation products of US
companies.................................................................................... 6
Table 11.6: Clinical trials on cartilage products of European and US
companies.................................................................................... 6
Table 11.7: Bone products of European companies............................................ 6
Table 11.8: Bone products of US companies ...................................................... 6
Table 11.9: Clinical trials on bone products of European and US
companies.................................................................................... 6
Table 11.10: Cardiovascular products of European and US companies ............... 6
Table 11.11: Clinical trials on cardiovascular products of European and
US companies ............................................................................. 6
Table 11.12: Clinical trials on tissue engineered organs of European and
US companies ............................................................................. 6
Table 11.13: Tissue engineered CNS products of US companies......................... 6
Table 11.14: Clinical trials on tissue engineered CNS products of US
companies.................................................................................... 6
Table 11.15: Miscellanous products on the market and in clinical trials.............. 6

viii
List of figures
Page
Figure 4.1: Contribution of cost factors to overall cost of healing in
sectors of the wound management market.................................. 6
Figure 8.1: Evolutionary cladogram on commercial efforts to develop
a bioartificial pancreas ................................................................ 6
Figure 10.1: Tissue engineering companies in European countries ..................... 6
Figure 10.2: Company size of European tissue engineering companies .............. 6
91
49
17
3
5 2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All TE companies Core TE companies
Shareofcompanies(%)
not known
Large
SME
..................................................................................................... 6
Figure 10.3: Company type of European tissue engineering companies.............. 6

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1. Terms of reference
Tissue engineering (TE) is an emerging interdisciplinary area comprising different
specialties such as medicine, materials science, cell biology, genomics and chemical
engineering. Its aim is to develop biological substitutes to restore, maintain or im-
prove tissue function, thus offering patients the chance to regain a normally func-
tioning body. The European Commission, DG Enterprise, is considering a directive
to cover human tissue-engineered products to harmonise legislation in the EU and
to enable a common European market while safeguarding consumer protection.
As the whole field of tissue engineering is relatively young, a comprehensive pic-
ture of the state-of-the-art of tissue engineering in the EU in terms of research ac-
tivities, actual market-industry structure and probable future developments will be
prepared.
This report is part of this comprehensive study. It maps the relevant industry and
products on the market or in clinical trials, respectively, and analyses the actual
market situation. In order to compile the report, the following tasks were carried
out:
• Listing and description of products already on the market or in clinical trial
phase (I to III), as well as their present market volume where applicable.
• Categorization of the companies involved according to their main production
portfolio (medical devices industry, biotech industry, pharmaceutical industry)
and according to size (SME, large company). The most important companies
should be described in more detail (e.g. size, turnover, product portfolio…).
• Analysis of the potential market volume for different product categories, for ex-
ample:
− Skin substitutes
− Orthopaedic cartilage and bone replacement
− Cardiovascular substitutes
− Organs (e.g. kidney, liver, lung)
− Nervous system
− Soft tissue (e.g. breast implants)
• The possible influences tissue-engineered products might have on the markets
for medical devices and medicinal products should be analysed. What products
might be replaced, how would the respective market shares change?
Demographical changes as well as lifestyle changes should be taken into account
and fed into the analysis of potential market volumes.

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The scope of the analysis is the EU member states, the first round enlargement
countries (Czech Republic, Estonia, Hungary, Latvia, Lituania, Poland, Slovenia
and Slovakia) and the USA as a reference. Any visible trends that distinguish
American approaches from European ones should be pointed out.

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2. Methodology applied
2.1 Definition of tissue engineering
The following defininition was agreed upon consultation with IPTS and DG Enter-
prise and applied in this study:
Tissue engineering is the regeneration of biological tissue through the use of cells,
with the aid of supporting structures and/or biomolecules (Scientific Committee on
Medicinal Products and Medical Devices 2001).
The definition chosen for this study primarily relates to therapeutic applications of
tissue engineering, not to in vitro applications. It excludes gene therapy and simple
transplantations. It includes autologous and allogeneic human cells, tissues and or-
gans, and also xenogeneic cells, tissues and organs, that have been substantially
modified by treatments. In addition, autologous chondrocyte transplants are inclu-
ded.
2.2 List of tissue engineering companies
In order to compile a list of companies in EU member states as well as in the acces-
sion countries Czech Republic, Estonia, Hungary, Latvia, Lituania, Poland, Slove-
nia and Slovakia involved in tissue engineering, the following sources were ana-
lysed:
• analysis of international and national biotechnology directories,
• analysis of reports on national biotechnology innovation systems, compiled by
research groups or foreign investment bureaus,
• analysis of internet tissue engineering platforms and link lists,
• analysis of scientific literature on tissue engineering, identified by data base
searches,
• analysis of market studies and company reports, identified by data base and
internet searches,
• in some countries direct requests for information on TE companies in academic
research institutes and/or national biotechnology associations.

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Despite several efforts, it was not possible to obtain information from member lists
of several professional societies (European Tissue Engineering Society (ETES),
European Society for Biomaterials (ESB)) due to data protection reasons.
After identification of company names from the above mentioned sources, the rele-
vance of the company was checked by obtaining more detailed information from its
internet home page where available.
2.3 List of tissue engineering products on the market and in
clinical trials
In order to compile a list of products on the market or in clinical trials the following
sources were analysed:
• analysis of scientific literature on tissue engineering, identified by data base
searches,
• analysis of tissue engineering companies' home pages in the internet,
• analysis of market studies and company reports, identified by data base and
internet searches,
• interviews with tissue engineering experts.
2.4 Market volumes
The actual and potential market volumes for tissue engineering as a whole or differ-
ent product categories, respectively, were compiled by analysing existing market
studies and company reports. Moreover, factors which influence market develop-
ment and dynamics (e. g. scientific-technical developments, legal situation, compet-
ing technologies, trends in health care systems, demographical and lifestyle
changes) were assessed through literature analysis and interviews with tissue engi-
neering experts from companies. In addition, health statistics and scientific litera-
ture were analysed for figures on disease prevalences and incidences for certain
diseases which are representative for selected tissue engineering market segments,
and put into perspective with published market estimations and with influencing
factors.
Foreign currencies were transformed into €. The following exchange reference rates
were used (Source: European Central Bank,
http://www.ecb.int/stats/eurofxref/eurofxref-xml.html, retrieved March 27, 2003,

5
and for the conversion rates of the EURO-Member Countries:
http://www.ecb.int/change/conversion.htm, retrieved March 27, 2003):
AUD Australian dollar 1.7852 GBP Pound sterling 0.68110
BEF Belgian Francs 40.3399 SEK Swedish krona 9.2527
CAD Canadian dollar 1.5711 USD US dollar 1.0000
FRF Francs Français 6.55957
2.5 Interviews
The information compiled in desk research were verified and completed during
questionnaire-guided telephone interviews with management staff from leading
companies (see annex). Each of these interviews lasted one to 1.5 hours.
In addition, interim results were presented and discussed with the EuropaBio cells
and tissues expert group in April 2003.

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3. Market volumes for tissue engineering
3.1 Overview of potential applications
Tissue engineering is the regeneration of biological tissue through the use of cells,
with the aid of supporting structures and/or biomolecules (SCMPMD 2001). It of-
fers the potential of a paradigm shift in medicine: new forms of therapy can be en-
visioned which allow the repair or regeneration of cells, tissues and organs which
have lost their function due to disease, injury or congenital defects.
Potential applications of tissue engineering are envisioned in the following fields:
• Skin,
• Cartilage,
• Bone,
• Cardiovascular diseases,
• Organs,
• Central nervous system,
• Miscellanous, e. g. soft tissue, ligaments.
Although tissue engineering research is being carried out in all these fields, only
few products have already entered the market, and the present state of the art in
science and technology does not allow a precise assessment which of these deve-
lopments will finally yield new therapeutic options and commercially viable pro-
ducts. Therefore, a broad variety of information sources and methods has to be used
in order to estimate the actual and potential market volumes for tissue engineering.
The following chapter gives an overview how this task can be addressed.

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3.2 Challenges in estimating market volumes in tissue engi-
neering
3.2.1 Characteristics of tissue engineering
Tissue engineering is a new, emerging, highly dynamic and interdisciplinary field.
Due to its infant stage of development and its continuing evolution, no clear and
generally recognised definition has emerged, and no established "official" statistics
are available which provide tissue-engineering specific data. Moreover, most of its
potentials still remain to be revealed in the future, so that the present database and
knowledge regarding future applications, products and potentials is incomplete and
uncertain.
3.2.2 Purpose of market estimations
In emerging technologies such as tissue engineering, two different types of market
estimations can be distinguished which fulfill two different purposes:
• Analysis of potential applications and markets. The analysis of potential applica-
tions and markets is the only type of market estimations which can be carried out
in very early stages of development. These potential market estimations can pro-
vide information on the overall scope of tissue engineering, the significance of
this field, and its potential for solving health problems and for commercial activi-
ties. The main purpose of these estimations of potential markets is to mobilize
ressources and to support decisions whether and to which extent to engage in this
field.
• Analysis of actual applications and markets. The analysis of actual applications
and markets can only be performed if tissue engineered products have already
been developed and brought onto the market. Comparing actual and potential
market analysis makes it possible to assess how far the development has already
progressed, to which extent the potential has already been realised, to which ex-
tent the potentials may have to be reassessed, and whether there are hindrances
which cause a deviation of actual markets from potential markets.
3.2.3 Sources of information for market estimations
Market estimations require the combination of two types of information: informati-
on on the number or frequency for the (actual or potential) application of the tissue
engineered product, and monetary information regarding the price or costs. These
types of information can be retrieved from a broad variety of sources.

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For the analysis of potential applications and markets, a broad scope of information
sources and data can be used. For information on the number or frequency, for e-
xample the following data can be used
• prevalences and incidences of the diseases which could be targeted by tissue en-
gineering products,
• number of conventional treatments for the given disease; number of conventio-
nally treated patients with the given disease,
• number of conventional drug doses/medical devices etc. sold for the targeted
diseases.
For the corresponding monetary information, sources such as
• retail prices for conventional drugs/medical devices,
• expenditures of the health care system for a given treatment/disease,
• willingness of users/patients to pay for treatments of a given disease
can be used.
For the analysis of actual applications and markets,
• the number of tissue engineering treatments or the number of patients treated
with the tissue engineering product,
• the expenditure of the health care system for tissue engineering treatments,
• sales figures for tissue engineering products or sales figures of tissue engineering
companies
can be used.
Often, combinations of the above mentioned approaches and data sources are ap-
plied. The resulting market figures depend on which sources of data were used for
calculating the market figures. Therefore, different market figures may be due to the
fact that – for example – they were calculated in case 1 by using prevalence data for
the given disease, and by using sold conventional drug doses in case 2. Moreover,
consistent data of good quality are often not available for all aspects required in the
market analysis. Then extrapolations of existing data (e. g. extrapolations of data
from country A to region B) and plausible assumptions must be made.
3.2.4 Consequences for market estimations in this study
In this study, a secondary analysis of published market data was carried out by
compiling and analysing existing market studies for tissue engineering. A secondary
analysis has several inherent limitations:

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• Incomplete information of data sources and methodology applied. Most publis-
hed market studies present their results in aggregated form, but do not reveal in
detail which definitions, data sources, calculation methods, and assumptions in
extrapolations have been applied. Therefore, it is often not possible to explain
differences in the results which may be due to methodological reasons.
• Definition of tissue engineering. Due to the dynamic development of tissue engi-
neering, several definitions are in use which differ from one another regarding
the scope of included subfields. In this study, tissue engineering was defined as
"the regeneration of biological tissue through the use of cells, with the aid of
supporting structures and/or biomolecules". However, the secondary analysis of
published market studies also had to rely on studies which used other definitions
of tissue engineering. In several cases, no information was available how tissue
engineering had precisely been defined for the respective study. This makes
comparison of the results of different studies difficult.
• Regional scope. Most market estimations relate to the USA. If one assumes that
worldwide disease incidence and prevalence rates were equal to those in the
USA, the estimated number of patients worldwide would be about 20 times lar-
ger than the US figures. However, in general, it is assumed that the worldwide
market is at two to three times that in the USA, because incidences and preva-
lences vary widely and in most parts of the world there is a lack of access to ad-
vanced health care services. If the European market is considered in the market
studies, it is assumed that it is as big as the US market, and is appr. 30-40 % of
the worldwide market (Medtech Insight 2000).
• Scenarios for market dynamics. In most published market studies on tissue engi-
neering, no information is available to which extent and with which level of
methodological sophistication market dynamics have been taken into account.
Dynamic factors are, among others, increase or decrease in disease prevalence
and incidence due to demographic trends, limited regional availability of certain
tissue engineered products, competition with established products and treatments
etc.
Due to these limitations inherent in secondary analysis of published market studies,
differences and inconsistencies between market estimations from different studies
can be explained or compensated only to a limited extent.

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3.3 Actual sales and potential market volumes
3.3.1 Actual sales
Although tissue engineering offers the potential to provide novel treatments in the
areas of skin, cartilage, bone, cardiovascular disease, central nervous system, and
organs, only tissue engineered skin and cartilage (and to a limited extent bone)
products have been commercialised until today. These are markets in which the
value of the products is primarily based on quality of life, not survival. Although the
data base is fragmentary, total annual worldwide sales for tissue engineered skin
replacement products are in the order of magnitude of € 20 millions, and worldwide
sales of autologous chondrocyte transplants are presently unlikely to exceed the
order of magnitude of € 40 mio./year1. Therefore, actual sales of tissue engineered
products amount to approximately € 60 millions/year.
Table 3.1: Revenue from tissue engineering products, cell therapies and bio-
molecules 1997
Revenue 1997
Estimated
Market 2007
Average an-
nual growth
rate (%)
€ mio. € mio. 1997-2007
Cell therapies
(Bone marrow transplants, stem cell
transplants, lymphocyte therapy, xeno-
grafts for treatment of Parkinson’s dis-
ease)
0 14,572 --
Tissue Engineering 61 3,867 55
Proteins and peptides
(cytokines, morphogenetic proteins, aner-
genic peptides used in supporting thera-
pies)
91 1,819 35
Total 152 20,258 60
Source: (Business Communication Company 1998)
Similar market assessments have also been published: according to (Lysaght 2002),
the total sales of tissue engineered products (i. e. skin and cartilage products) were
about € 40 mio. in 2001, with European combined sales under € 1 mio. Revenues
from tissue engineering products (which were not specified in detail) were esti-
1 For a detailed presentation and discussion of the underlying figures and factors influencing the
market situation please refer to chapters 4-6.

11
mated at € 61 mio. in 1997 (table 3.1). However, the estimated annual growth rate
of 55 %, leading to a global € 3,867 mio. market ten years later, seems over-
optimistic. A different source uses a narrower definition of tissue engineering and
estimates the global cell-based tissue engineering market at € 47 mio. in 2001. It
also assumes vital growth over the following years, with a € 270 mio. market in
skin repair alone by 2007 (Medmarket Diligence 2002).
3.3.2 Potential market volumes
When estimating the overall potential market for tissue engineering, most publica-
tions refer to estimates for the USA published in 1993 (Langer et al. 1993) and up-
dated in 1999 (Vacanti et al. 1999). In this publication, medical procedures were
taken into account which require some type of replacement structure for the area of
defect or injury, and it was assumed that these medical procedures in principle
could also be amenable to tissue engineering applications. Table 3.2 gives an over-
view of the indications and procedures or patients per year in the USA. In total,
annually more than 11 mio. medical procedures which are also potentially relevant
for tissue engineering are performed in the USA. This corresponds to a total na-
tional health care cost of appr. € 400 billion/year (this estimation only includes costs
for patients with cardiovascular disease and coronary artery disease, for stents used
in angioplasty and costs of care for diabetes).
A different definition of tissue engineering was applied by (Lysaght et al. 2000),
who additionally included organ transplantations and dialysis, but excluded neuro-
logical disorders and skin replacement. They concluded that worldwide, more than
20 mio. patients are affected, and the costs associated with organ replacement
therapies amount to more than € 300 billion /year worldwide, with appr.
€ 100 billion/year in the USA. This amounts to appr. 8 % of the worldwide medical
spending (Lysaght et al. 2000).
These two studies focus on the total health care costs caused by organ replacement
therapies. Another market study focuses on potential industry sales. It estimates the
Human Tissue Products Market at more than € 80 billion in the USA alone. This is
put into perspective with the global medical devices market, estimated at
€ 130 billion and the global pharmaceuticals market of € 265 billion (Medtech In-
sight 2000). In another study, however, the total market for the regeneration and
repair of tissues and organs is estimated to be € 25 billion worldwide (Bassett
2001). It is not known whether different definitions of tissue engineering were used
which could explain these differences in market potentials.

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Table 3.2: Overall potential market for tissue engineering
Vacanti and Langer 1999 Lysaght and Loughlin 2000
USA World
Patient Population 2000
Indication
Procedures or pa-
tients/year (1996)
prevalence treatment cost/a
(mio. €) Incidence Prevalence at Midyear
Total Therapy
Cost 2000 (mio €)
Cardiovascular 58,000,000
Heart-Including coronary artery bypass graft-
ing
1,821,000 14,000,000 274,000
heart-lung 733,000 6,000,000 65,000
Angioplasty of coronary vessels, stents 1,000,000 2,000 1,750,000 2,500,000 48,000
Blood vessels 272,000
Valves 245,000 2,400,000 27,000
Pacemakers 670,000 5,500,000 44,000
Spinal cord (neural and neuromuscular) 469,000
Orthopaedic and plastic reconstructive
Bone, cartilage, tendon, and ligament 1,977,000
Hips 610,000 7,000,000 41,000
Knees 675,000
Breast 479,000
Gastrointestinal
Liver, gallbladder, bile duct 205,000
Pancreas (diabetes)† 728,000 100,000
Intestinal 100,000
Other

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Urinary system including kidney 740,000
Maintenance dialysis 188,000 1,030,000 67,000
Skin 2,509,000
Hernia 988,000
Organ transplants 48,000 275,000 13,000
Total 11,288,000 376,000 4,919,000 24,705,000 305,000

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Tissue Engineering has the potential to offer new treatment options for orthopedic
indications (cartilage, bone), skin damage, cardiovascular diseases, neurological
disorders and organ failure. Table 3.3 gives an overview of the number of affected
patients, and, based on these numbers, estimation of the tissue engineering and or-
gan regeneration market in the USA. These derived market figures take into account
to which extent the tissue engineered products could satisfy unmet medical needs
(e. g. above average in the case of neurological disorders, where currently mostly
symptomatic treatments are available), which degree of market penetration and re-
placement of existing therapies could be achieved (e. g. below average in the case
of skin repair), and willingness to pay/prices and costs of existing treatments (e. g.
assessment of pancreas regeneration as a very profitable market segment due to the
high health care costs of diabetes management in these chronically ill patients and
the increasing incidence and prevalence of diabetes in the US).
Table 3.3: Potential US markets for tissue engineering and organ regeneration
products 1999
Affected patients
1999
Potential US Sales
Disease/Application Segment
mio.
% of
total
billion €
% of
total
Orthopedics
(repair of joints and cartilage, fracture fixation,
bone repair, vertebral disc repair)
3.2 22 7.8 20
Cardiovascular disease
(tissue-engineered bypass grafts, regeneration
of damaged cardiac muscle tissue, restenosis
prevention, angiogenesis for revascularization,
repair of heart valves, repair of congenital ab-
normalities of the heart, treatment of stroke)
3.2 22 6.8 17
Neurological disorders
(Parkinson's Disease, Huntington's Disease,
epilepsy, regeneration of nerves)
1.6 11 7.2 18
Ulcers, skin repair
(diabetic foot ulcers, pressure sores, venous
ulcers)
2.8 20 4.3 11
Muscle repair 1.8 13 4.5 11
Pancreas Regeneration
(Diabetes)
0.1 1 2.5 6
Other
(bladder, renal tubule, small intestine replace-
ment, skin, breast and urethra repair, liver,
ureter and bone marrow regeneration, penile
prosthesis)
1.6 11 6.8 17
Total 14.3 100 39.9 100
Source: (Medtech Insight 2000)

15
The above mentioned figures, however, have to be met with caution. They refer to a
potential market which could in principle be addressed by tissue engineering. How-
ever, these estimations include several indications or application areas which are
still in the early R&D phase and far from market entry (e. g. all organ replacement
approaches, treatments for CNS disorders, see also chapters 8 and 9 of this report).
Moreover, it is not clear to which extent it has been (unrealisticly) assumed that
every patient is treated with the tissue engineering option although tissue engineer-
ing products will have to compete with other treatment options.
Although most markets for tissue engineering products have not yet emerged, two
important characteristics can already be noted:
• The value of most products which are already commercialised or are likely to do
so in the coming years is based on quality of life, not patient survival. Superior-
ity regarding quality of life may, however, be rather difficult to prove if there are
already conventional, established treatments which have to be outcompeted.
• Most tissue engineering products target markets which are much more focussed
than attractive market for pharmaceuticals (> € 1 billion/year).

16
4. Tissue engineered skin products
The human skin is a complex organ composed of three principal components
(Schulz et al. 2000):
• Epidermis. The epidermis is the superficial layer of the skin. It is the interface
with the environment, providing immediate protection from microbial entry and
loss of water, electrolytes, and proteins. The epidermis, if damaged, can regene-
rate.
• Dermis. The dermis is the inner and thicker of the two skin layers. it is responsi-
bel for the strength, elasticity, and tactile qualities attributed to skin. If damaged,
the dermis can only regenerate to a limited extent.
• Epidermal appendages. Epidermal appendages are hair follicles, sweat glands
and sebaceous glands. They are involved in maintaining the barrier and thermo-
regulatroy functions of the skin.
For the past 30 years, attempts have been made to develop products that can be used
as a temporary or permanent natural skin substitute. These artificial skin substitutes
should ideally fulfill the following functions (Schulz et al. 2000):
• Thermoregulation,
• microbial defense (both mechanical barrier and immune defense),
• desiccation barrier,
• mechanical defense and wound repair, elicit a regeneration response from the
wound bed without evoking an inflammatory or rejection response,
• cosmetic appearance, pigmentation and control of contraction,
• durable and elastic to provide normal function and cosmetic appearance,
• be easy to use, be readily available immediately after damage of the natural skin.
Indications and market segments for tissue engineered skin sustitutes are
• Burns. Severe burns can be life-threatening. In the USA every year 75,000 of
burned patients require inpatient care, and 5,000-12,000 die of their injuries
(Schulz et al. 2000). The number of burnt patients requiring tissue engineered
skin grafts is estimated at appr. 150 patients/year in Western Europe. Although
there is a medical need for skin replacement therapies in burns treatment, prod-

17
ucts aimed at burn wound closure are unlikely to be as economically profitable
as products that could be used for chronic wounds, which are substantially more
prevalent (see below) (Jones et al. 2002).
• Chronic wounds. Chronic wounds are defined as wounds which do not heal
within six weeks. Chronic wounds can be devided into
− pressure ulcers, which form during sitting or lying without moving. Especially
elderly and severely ill people are at risk.
− Ulcus cruris, venous ulcers, which are caused by venous insufficiency.
− Diabetic ulcers, diabetic foot, which can emerge in diabetic patients with an
ill-controlled blood glucose level.
Chronic wounds often prevail for several years, require cost-intensive treatments
and can also have significant psychosocial consequences for the affected patient.
From epidemiological studies it is known that underlying diseases which result
in the development of chronic wounds (e. g. venous diseases, diabetes) are
among the most frequent disorders in Western populations, are increasing due to
the prevailing life style changes, and are also age-correlated. Therefore, the
demographic development will also lead to an increase in chronic wounds. It is
estimated that appr. 2-3 mio. people suffer from chronic wounds in Germany
(pressure ulcers 46 %, Ulcus Curis 28 %, diabetic foot 21 %, others 5 %)
(Landesbank Baden-Württemberg Equity Research 2001). The direct and indi-
rect costs of leg ulcers in the UK as well as Germany are higher than one bil-
lion € per year (Augustin et al. 1999).
• Indications in plastic surgery or with cosmetic character. Indications are e. g.
the treatment or prevention of scarring and the treatment of vitiligo or other
pigmentation disorders. The worldwide incidence of vitiligo is 1-2 % of the
population with marked regional differences (incidences of 3-4 % in In-
dia/Asia/Arabia versus 0.5 % in Scandinavia) (Landesbank Baden-Württemberg
Equity Research 2001).
• Defects in oral mucosa. Large and painful defects in oral mucosa are associated
with certain forms of cancer. In addition, they play a role in dental surgery (e. g.
tooth implantation).
4.2 Overview of important companies and products
Several different approaches have been pursued, many of them involving tissue
engineering, to generate skin substitutes that fulfill at least some of the functions
outlined in chapter 4.1. At present, approximately two dozens of tissue engineering
products for skin replacement are already on the market in Europe and the USA. At
least seven additional products are in clinical trials (for details see chapter 11.1). US
companies concentrate on allogenic skin products, European companies favour
autologous skin products.

18
4.2.1 Treatment of full-thickness burns
The first products on the market were for the treatment of severe, full-thickness
burns, e. g.
• Epicel, produced by Genzyme Biosurgery (formerly Genzyme Tissue Re-
pair)(USA). Genzyme Biosurgery brought one of the first tissue engineered skin
products on the market. This was Epicel® for the treatment of life-threatening
burns. Approximately 75 burn patients are treated with Epicel® per year. Over
600 patients have been treated worldwide since the product was introduced in
1987.
• Integra, produced by Integra Life Sciences (USA).
• Transcyte, marketed by Smith & Nephew (UK).
However, these products are unlikely to be economically as profitable as skin re-
placements that could be used for chronic wounds, due to their being much more
prevalent (Jones et al. 2002).
4.2.2 Treatment of chronic wounds
Several products are on the market which target chronic wounds, such as venous or
diabetic ulcers. Products in this category are e. g.:
• Apligraf, developed and manufactured by Organogenesis (USA), marketed by
Novartis (CH/USA) until June 2003. The worldwide distribution and marketing
rights of Apligraf will then be transferred back to Organogenesis.
• Dermagraft, developed by Advanced Tissue Sciences, marketed by Smith &
Nephew (UK)
• Hyalograft™ 3D, Laserskin™, produced by Fidia Advanced Biopolymers (Italy)
• BioSeed-S, produced by BioTissueTechnologies (Germany), marketed by Baxter
Healthcare
• autologous Autoderm and allogeneic CryoCeal, produced by XCELLentis (Bel-
gium)
• Epidex, production stopped by Modex Therapeutics, product licensed to Auto-
derm (Germany) in spring 2003
• Collatamp, produced by Innocoll GmbH (Germany)
• Epibase, produced by Laboratoire Genevrier (France)
• CellActiveSkin, production stopped in late 2002 by IsoTis SA, because product
was not profitable
• OrCell, produced by Ortec (USA)

19
• VivoDerm, produced by Convatec (USA)
As will be explained in more detail in the following chapter and in WP 2, the cost-
effectiveness of tissue engineered skin replacements for the treatment of chronic
wounds has – in general – not yet been clearly established. Therefore, statutory and
private health insurance schemes do not routinely cover the costs for these treat-
ments which is a major restriction in realising the full market potential (see below).
As a consequence, tissue engineering companies increasingly develop products
which target the "self-payer" patients' segment.
4.2.3 Aesthetic surgery, cosmetic dermatology
In order to develop economically profitable products, tissue engineering companies
increasingly target the "self-payer" patients' segment by specifically tailored appli-
cations in aesthetic surgery or cosmetic dermatology. Such products comprise
treatment or prevention of scarring, treatment of pigmentation disorders such as
vitiligo, and others. Products in this category are e. g.
• BioSeedM, produced by BioTissueTechnologies (Germany)
• MelanoSeed, produced by BioTissueTechnologies (Germany)
4.2.4 In-vitro human skin models
Several companies develop in-vitro applications of skin replacement products. The
products can be used as skin models for in vitro testing for toxicity, pharmacology
and cosmetics. Products in this category are e. g.
• Skin model developed by Biopredic (France)
• Skin model developed by SkinEthicLaboratories (France)
4.3.1 Actual sales of tissue-engineered skin products
No comprehensive data on actual sales figures of tissue-engineered skin replace-
ment products is publicly available. However, some data can be obtained from pub-
lic sources by scanning literature or making educated guesses from data in compa-

20
nies' annual reports. Table 4.1 gives the best available, albeit very fragmentary
overview of actual sales figures.
Table 4.1: Sales figures for selected tissue engineered skin products
Trade name Company Year Sales (€)
Apligraf
Organogenesis Inc (USA),
Novartis (USA/CH)
2000 12,000,000
Dermagraft
Advanced Tissue Sciences (USA)2,
Smith & Nephew (UK)
2002 4,405,000
CellActiveSkin IsoTis (NL) 2002 545,000
Epidex Modex Therapeutics (CH) 2002 157,000
BioSeedS,
BioSeedM,
MelanoSeed
BioTissueTechnologies (D) 2002 450,000
Epicel Genzyme Biosurgery (USA) 2001
n.a.
75 patients treated
annually worldwide
Source: Fraunhofer ISI, compiled from literature and companies' annual reports
Although the data in table 4.1 only cover some of the tissue engineered skin re-
placement products which are commercially available, it can be deduced that the
total annual worldwide sales for tissue engineered skin replacement products will at
present be in the order of magnitude of € 20 millions.
However, none of the products on the market seems to have reached profitability
yet. As a consequence, two leading US companies, Organogenesis Inc and Ad-
vanced Tissue Sciences, which were the first to introduce tissue-engineered skin
replacements into the market, had to file for bancruptcy in autumn 2002. The prod-
ucts CellActiveSkin and Epidex were not profitable, and their commercialisation by
IsoTis SA (recent merger of IsoTis BV and Modex Therapeutics) has been stopped
by the end of 2002. BioTissueTechnologies which commercialises the products
BioSeedS, BioSeedM, and MelanoSeed, in spring 2003 is at risk of not being able
to meet its financial obligations.
2 Advanced Tissue Sciences (USA); had a marketing agreement with Smith & Nephew for Der-
magraft and Transcyte; both products were completely taken over by Smith & Nephew in 2002
after Advanced Tissue Sciences had to file for bancrupcy.

21
Most tissue engineered skin replacement and repair products target the wound care
market. The wound care market can be devided into three segments:
• Traditional wound management, such as traditional gaze and tape, first aid dress-
ings.
• Advanced wound management, e. g. moist wound healing, hydrocolloid dress-
ings.
• Active wound management, e. g. tissue engineered skin, growth factors, antim-
icrobials, enzymes (e. g. collagenase).
Advanced and active wound management concepts aim at actively stimulating the
biological processes of wound healing and at removing the barriers to normal heal-
ing present in these types of wounds. Tissue engineered skin products are a sub-
segment of the active wound management market. Table 4.2 gives an overview of
the worldwide wound management sales market and its segments.
Table 4.2: World wound management sales market and its segments
Wound Management
Market Segment
Sales in 2001
(mio. €)
Share of overall
market (%)
Annual growth rate
(%)
Traditional 1,950 50.5 -3
Advanced 1,515 39.3 + 8
Active 392 10.2 + 28
Total 3,857 100.0 + 6
Source: Smith & Nephew 2002
Table 4.2 shows that traditional wound care is still the largest segment of the
worldwide wound care market. However, dynamic growth comes from both the
advanced and active wound management segments. Their growth is coming largely
at the expense of the traditional wound care products. The leading companies in the
advanced and active wound management market are Smith & Nephew (market
share 21 %), Johnson & Johnson (16 %), Convatec (13 %), 3M (12 %) and KCI
(9 %). Key drivers in the advanced and active wound care market are
• demographic development,
• quality of life,
• health economics,
• improved outcomes,
• nursing shortages, and
• technological developments.

22
The market leader, Smith & Nephew, follows the strategy to be well represented
with its products and services in all stages of the treatment process (wound assess-
ment and diagnosis, systemic stabilisation, wound bed preparation, wound healing
and aftercare/prevention). The most differentiating factor between traditional and
advanced wound treatment strategies are staff costs, because traditional wound
dressings required daily dressing changes while advanced hydrocolloid dressings
are changed only every 2-4 days (Augustin et al. 1999). Therefore, it is assumed
that the cost of healing will be reduced in advanced and active wound management
as compared to traditional management due to the above mentioned driving factors,
but that the proportion of the "material" of the total cost base will increase (fig-
ure 4.1).
Figure 4.1: Contribution of cost factors to overall cost of healing in sectors
of the wound management market
Driving factors: demographic development quality of life, health economics, technological developments,
improved outcomes, nursing shortages
0
10
20
30
40
50
60
70
80
90
100
Traditional Advanced Active
Wound care
CostofHealing
Other
Materials
Nursing Time
Source: Smith and Nephew 2002
Another source assumes that the global wound management market potential sums
up to appr. € 6,250 mio., and that a maximum of 10 % can be accessed by – the
relatively costly – tissue engineered skin products which will remain restricted to
chronic wound management (Landesbank Baden-Württemberg Equity Research
2001, p. 17). Therefore, a maximum global market potential of € 625 mio. is calcu-
lated. This is in the same order of magnitude as estimations from other sources
(Russell et al. 2001).

23
Table 4.3: Maximum market potential for tissue engineered skin products
worldwide/USA
Market
Market Size
2001 (mio. €)
Region Source
Global wound management market po-
tential
6,250 world
Maximum market potential for tissue
engineered skin, only applicable to
chronic wounds
625 world
(Landesbank Baden-
Württemberg Equity
Research 2001, p. 17)
Global market for skin replacement
products for wound repair
800 world (Russell et al. 2001)
Market for skin substitutes 300 USA (Russell et al. 2001)
Although tissue engineered skin products are already on the market for several
years, the annual worldwide sales are in the order of magnitude of € 20 mio. (see
above) and thus stay far behind the market potentials listed in table 4.3. Reasons for
this discrepancy between forcasted market potentials and actual sales figures are
given in chapter 4.3.
4.3 Factors influencing the market situation
Although the incidence and prevalence of acute and chronic wounds is high (see
chapter 4.1), tissue engineered skin is not the preferred treatment for most of these
wounds. Generelly, skin defects can be treated by three therapeutic options:
• classical wound treatment by traditional and advanced dressings and ointments,
• surgical procedures, such as split skin transplantation,
• transplantation of tissue engineered skin.
Approximately 80 % of chronic wounds can be treated with classical wound treat-
ments which have direct material costs in the order of € 1/day. The remaining 10-
20 % therapy-resistant wounds can in principle be treated with tissue-engineered
skin products. To which extent this potential market can be accessed depends heav-
ily on the fact whether the health insurances pay the treatment. Experts estimate that
only up to 15 % of the patients suffering from chronic wounds are willing to pay the
wound treatment by themselves, even if sustainable healing could be expected. The
skin transplant costs are appr. € 2,000/treatment. Up to now, in Europe no general
cost coverage by health insurance companies has been achieved. An application for
general reimbursement for EpiDex (produced by Modex Therapeutics, Switzerland)
was turned down by the Swiss Federal Office for Social Security in late 2002. Ex-
perts have different views whether the existing skin products are likely to gain ap-
proval at all, regarding reimbursement. At least, this is unlikely to be achieved be-

24
fore 2005 because additional data from clinical trials supporting application for re-
imbursement approval cannot be expected earlier. Table 4.4 gives a model calcula-
tion for the "realistic" market potential, based on data for Germany. The model cal-
culation yields a market potential of appr. € 40 mio. to max. 120 mio./year tissue
engineered skin products for hard-to-heal wounds for Germany.
Table 4.4: Realistic market potential for tissue engineered skin products for
the treatment of chronic wounds, model calculation for Germany
Patients with chronic wounds 2 mio. patients
Wounds resistant to conventional wound treatment
procedures
10-20 % of all patients
200,000 – 400,000 patients
Patients with therapy-resistant wounds willing to
pay the treatment by themselves
10 % to max. 15%
20,000 to max. 60,000 patients
Real market potential for tissue engineered skin
products
2,000 € transplant costs/treatment
40 mio. € to max. 120 mio. €/year
According to experts‘ opinion, the general reimbursement of tissue engineered skin
treatments by health insurance companies would be a prerequisite to fully explore
the real market potential. In addition, structural changes in patient care are required:
treatment with tissue engineered skin products will largely be confined to special-
ized wound healing centres – at least in the beginning – and not readily available
from general practitioners who, however, care for the majority of chronic wound
patients.
Experts‘ opinions are devided over the question whether significant cost reductions
can be achieved by using allogenic instead of autologous grafts. Allogenic grafts
should allow for a continuous, automated graft production. However, actual prices
are in the same order of magnitude, irrespective of whether the cell source is al-
logenic or autologous. Allogenic Apligraf costs appr. € 1.000/50 cm², autologous
BioSeedS € 2000/100 cm² (sales prices only for the transplant; treatment costs addi-
tionally include preparation of the wound, transplantation of the skin graft, and
costs for aftercare).
Other market segments which do not rely so heavily on the reimbursement policy of
health insurances are products which traditionally must be paid by the patients
themselves (e. g. aesthetic surgery, dental implants) or which are paid from hospital
budgets (e. g. oral mucosa products used in the treatment of oral cancer). However,
the number of affected patients for these indications is much lower than the number
of patients with chronic wounds. In 2002, sales of BioTissueTechnologies products
MelanoSeed and BioSeedM which target the above mentioned niche markets were
in the order of magnitude of € 150,000/year and product.

25
5. Tissue engineered cartilage products
Cartilage tissue is composed of chondrocytes and an extracellular matrix that con-
sists of proteoglycans, collagen, and water. It is avascular and has no nerve struc-
tures (Laurencin et al. 1999). One can distinguish
• unstressed cartilage, e. g. ear and nose,
• stressed cartilage, e. g. in joints or intervertebral discs.
Once damaged, cartilage is generally considered to have a limited capacity for self-
repair. Therefore, tissue-engineered cartilage products aim at cultivating chondro-
cytes in vitro, and to reintroduce the cultured cartilage tissue into the damaged re-
gion.
In the field of unstressed cartilage, few patients have been treated with tissue-
engineered cartilage grown on preformed scaffolds. In these cases, cartilaginous
parts of the maxillofacial region (e. g. outer ear, nasal septum) have been recon-
structed. Due to the still limited clinical success, these applications seem to be re-
stricted to single cases (Bücheler 2002).
At present commercially more important are tissue-engineered cartilage products
which target defects of stressed cartilage. Defects of stressed cartilage can be due to
trauma, and over time even minor lesions of the articular cartilage may progress to
chronic defects, such as osteoarthritis. Defects of stressed cartilage can, however, be
also due to rheumatoid arthritis. In addition to causing pain and restricted mobility,
chronic injuries to joint cartilage may lead to further deterioration of the joint sur-
faces. These manifestations can severly hinder a person's normal activities and oc-
cupation. Established forms of therapy for cartilage damage in joints are
• arthroscopic surgery to smooth the surface of the damaged cartilage area,
• surgical procedures, such as microfracture, drilling, abrasion, in order to let bone
marrow cells infiltrate the defect, resulting in the formation of fibrous cartilage
tissue,
• analgesic therapy,
• full or partial artificial joint prostheses, often after years of progredient joint de-
fects. As artificial joints generally last 10-15 years and revision surgery is prob-

26
lematic, joint replacement therapy is recommended mainly for patients over the
age of 50.
In 1994, another treatment option, based on tissue engineered cartilage, became
available for cartilage defects in the knee joint which are due to traumatic injury:
autologous chondrocyte implantation, also termed autologous chondrocyte trans-
plantation (ACT) (Brittberg et al. 1994). This technique and several modifications
of it are presently the most important clinical application of tissue engineered carti-
lage.
The following applications may become relevant in the future:
• further development and adaptation of the ACT technique for the treatment of
traumatic cartilage defects in other joints than the knee,
• further development and adaptation of the ACT technique for the treatment of
joint cartilage defects with different etiology (e. g. osteoarthritis, rheumatoid ar-
thritis),
• development of tissue-engineered grafts combining cartilage and bone,
• tissue engineered products for the treatment of intervertebral disc damage.
At present, most tissue engineered cartilage products target cartilage defects in the
knee joint which are due to traumatic injury. They are based on the method devel-
oped in 1994 (Brittberg et al. 1994). At present, at least three types of ACT are
commercially available:
• "Classical" ACT. In a first arthroscopic surgery, a biopsy of healthy cartilage is
taken from the patient's knee from a minor load bearing area. The chondrocytes
are isolated and cultured in vitro for about three weeks. In a second, this time
open-knee surgery, a periosteal flap is taken from the patient and is sutured over
the cartilage lesion. Then the cultured chondrocytes are injected under the flap
into the lesion. The knee is surgically closed. Movement of the knee and weight
bearing must be gradually introduced and increased to the full extent over a pe-
riod of 2-6 months after surgery.
• ACT with artificial cover. This variant of the classical ACT uses an artificial
cover, e. g. a collagen or hyaluronic acid membrane, instead of a periosteal flap.
• Matrix-induced ACT. In this variant of the classical ACT, the cultured chondro-
cytes are applied to a biodegradable three-dimensional scaffold before retrans-
plantation. The pre-formed graft is then cut to the required size and fitted into the
defect with the aid of anchoring stitches. This method does no longer require the

27
complicated sueing of the periosteal flap or artificial cover, therefore signifi-
cantly reduces the surgery time and also makes arthroscopic instead of open-
knee surgery possible. It is assumed, but not yet proven, that the three-
dimensional scaffold also yields a hyaline cartilage of superior biomechanical
properties than in "classical" ACT, so that the treatment of osteoarthritic defects
will also become possible in this way.
At present, all autologous chondrocyte products on the market fall into one of these
three categories. Additionally, the commercially available products differ in their
technical specifications (e. g. details and duration of the cell culturing process, addi-
tives to the cell transplant (e. g. antibiotics)), the extent of quality standards and
quality control applied to the production process and resulting product, the logistic
service provided by the company, and the educational support provided by the
company for the orthopedic surgeons. At present, it is difficult to assess whether
and which of these factors give companies a clear market advantage over their
competitors.
There is a large number of companies which offer autologous chondrocyte trans-
plants. The most important companies for chondrocyte transplants are described
below.
• Genzyme Biosurgery (USA). Genzyme Biosurgery is a division of Genzyme
Corporation. It develops, produces and sells biotherapeutic and biomaterial
products especially in the markets of orthopaedics and heart disease, and in
broader surgical applications. Genzyme Biosurgery was the first company which
introduced autologous chondrocyte transplantation into the market. With its
product Carticel®, Genzyme Biosurgery is market leader in the USA. Activities
with Carticel in Europe seem to have been terminated recently. Genzyme Bio-
surgery had treated appr. 4,000 patients worldwide with its product Carticel® in
the period from 1995 to 2000. This corresponds to cumulated sales of appr.
20 mio. US-$ in five years. Sales of Carticel® amounted to 18.4 mio. US-$ in
2001 and 20.4 mio. US-$ in 2002, which corresponds to 2,000-
3,000 transplants/year.
• Fidia Advanced Biomaterials (IT). Fidia Advanced Biomaterials is one of the
European market leaders and has a good market position in Europe, especially in
Italy. FAB sells about 300-400 transplants/year. Its product HYALOGRAFT® C
is a cartilage substitute made of autologous chondrocytes delivered on a biocom-
patible tridimensional matrix, entirely composed of a derivative of hyaluronic
acid (HYAFF®).
• Verigen (Germany). Verigen, founded in 1999 and headquartered in Leverku-
sen, Germany with offices in the United Kingdom, Denmark, Italy, and Austra-
lia, is one of the European market leaders. It has currently three chondrocyte
products for the treatment of knee cartilage defects on the market: CACI (cultu-
red autologous chondrocytes which are covered by a collagen membrane), MACI

28
(matrix-induced autologous chondrocyte implantation), and MACI® (A) which
is the minimally-invasive variant of MACI®, in which the implantation is done
by arthroscopy. By 2002, more than 800 patients in Europe and Australia have
been treated with Verigen products. Verigen has a cooperation with Mitek for
marketing MACI® (A) in the USA. No data on sales figures and revenues are
available.
• co.don (Germany). co.don was one of the first companies to offer autologous
chondrocyte transplantations in Europe and is one of the European market lead-
ers. Its product is co.don chondrotransplant®. In 2000, sales of chondrotrans-
plant® were appr. 550,000 € (corresponding to sales of 100 transplants plus ap-
plication of 100 without reimbursement (e. g. in clinical trials), and appr.
1 mio. € in 2001 (corresponding to ca. 260 transplants plus 80 transplants with-
out reimbursement).
• BioTissueTechnologies (Germany). BioTissueTechnologies is a tissue-
engineering company founded in 1997. Its chondrocyte product is BioSeedC®,
an autologous 3D chondrocyte graft which can also be applied by arthroscopy.
BioSeedC® is in controlled clinical use since 2001. Sales in 2002 were approxi-
mately 500.000 €. BioSeed®-C is currently available throughout Germany. In
2003, in co-operation with industrial partners, the company plans to increase its
availability to include other European countries.
• TETEC® AG (Germany). TETEC® AG was founded in 2000. It develops and
manufactures autologous cell transplants for cartilage repair which are distrib-
uted by its co-operation partner AESCULAP® AG, a medical device company
specialised as a system supplier in the surgical area ("All it takes to operate").
TETEC® has a manufacturing permit for the autologous chondrocyte product
NOVOCART® in accordance with the German Drug Act (AMG). TETEC® AG
has one product on the market, NOVOCART®. TETEC's R&D activities
comprise a scaffold implant technology for ACT which can be applied by
arthroscopic surgery, treatment of larger articular cartilage defects including me-
niscal lesions, degenerative arthritis or osteoarthritis by cartilage cells seeded on
scaffolds in the medium-term, and treatment for Intervertebral disk (IVD) lesi-
ons.
Other companies, also active in this sector are
• IsoTis SA (Switzerland/The Netherlands). Before the merger with the Swiss
company Modex Therapeutics, IsoTis BV (NL) had the autologous chondrocyte
product CellActive Cart on the market, mainly in Spain. Sales amounted to
187,000 € in 2002. As the product was not profitable, the production and marke-
ting of CellActive Cart was stopped in late 2002.
• ARS ARTHRO AG® (Germany). The company was founded in 2001, received
manufacturing approval according to the German drug act in October 2002 and

29
has its product CaReS® (Cartilage Repair System) in clinical use since Novem-
ber 2002. CaReS® is a 3D mechanically stable chondrocyte transplant based on
cultured autologous cartilage cells and a collagen matrix. It is applied by mini-
mally invasive surgery. Since late 2002 a prospective randomized study compar-
ing ACT with the ARS ARTHRO® transplant is carried out at the University
Hospital in Aachen (Germany) for the indication of focal defects of the articular
cartilage of the knee joint.
• Ormed (Germany). Ormed is a medical device company specialised in thera-
pies in orthopaedics, traumatology, athroscopy, sports medicine and rehabilita-
tion. It offers the autologous chondrocyte transplant ARTROcell®. The autolo-
gous chondrocytes are cultured by the cooperation partner Metreon Bioproducts
GmbH , a subsidy of the biotechnology company CellGenix Technologie Trans-
fer GmbH. The chondrocyte implant is covered by a collagen matrix derived
from porcine type-I and type III collagen (Chondro-Gide®, supplied by Geist-
lich). Ormed also offers training courses for ACT and carries out R&D on AR-
TROcell® follow-up products.
• Orthogen AG (Germany). Founded in 1993, Orthogen develops and produces
"molecular orthopaedics" products for orthopaedic specialists and surgeons, such
as genetic diagnostic tests and autologous chondrocyte transplants. Since 2000,
Orthogen AG has the authorization of a GMP-clean room, where it manufactures
Arthromatrix®. Arthromatrix® is being distributed by Arthrex Biosystems
(Germany).
• CellTec (Germany). CellTec, founded in 1997, holds a manufacturing permit in
compliance with §13 AMG (German Drug Act) to manufacture culture
chondrocytes according to GMP since 1999. CellTec has one autologous
chondrocyte product on the market, ChondroTec™ which is applied by open-
knee surgery and covered with a periosteal flap. In an ongoing research project,
CellTec develops Matrix-Bound Chondrocyte Transplantation (MACT).
• TiGenix (Belgium). TiGenix develops cell-based tissue-engineered products in
the areas of joint-surface defects, bone defects and heart valves. Its lead product
is ChondroCelect®, an ACI, which entered randomised, prospective, multicenter
clinical trials in March 2002. In preclinical development are ChondroCelect-P®
(i. e. ChondroCelect with introduction of adult stem cell technology), Chon-
droSealTM
(use of a biodegradable membrane to replace the periosteal flap in the
ACI-procedure), and Osteochondral Repair (Expanded osteoprogenitor cell
populations, combined with adequate biomaterials, to be used in combination
with ChondroCelect products in order to treat osteochondral defects).
• Osiris Therapeutics, Inc (USA). Osiris Therapeutics is a privately held devel-
opment stage company, focusing on cellular therapeutic products for the regen-
eration and functional restoration of damaged and diseased tissue. The therapeu-
tic products are derived from human mesenchymal stem cells (hMSCs) ex-
tracted, isolated and purified from adult bone marrow. Osiris specialises in the

30
differentiation of hMSCs into different specialised cell types, among them carti-
lage. Osiris has a preclinical research programme to develop a treatment for me-
niscal injury in the knee, based on human mesenchymal stem cells. The product
Chondrogen is an injectable preparation of Mesenchymal Stem Cells suspended
in hyaluronan which is delivered to the joint by simple intraarticular injection. A
clinical trial is planned.
5.3.1 Actual sales of tissue-engineered cartilage products
No comprehensive data on actual sales figures of tissue-engineered cartilage repair
products is publicly available. However, some data could be obtained from expert
interviews, and they were backed up and checked for plausibility by data from pub-
lic sources, such as literature or data from companies' annual reports. Table 5.1
gives the best available, albeit very fragmentary overview of actual transplantation
and sales figures. The sales volume per country is calculated from the number of
performed ACTs/year, assuming average prices of the transplants of € 5,000 in
Europe and € 8,000 in the USA. As a plausibility check, sales information on indi-
vidual products are also given. As can be seen from table 5.1, worldwide sales of
autologous chondrocyte transplants are presently unlikely to exceed the order of
magnitude of € 40 mio./year.

31
Table 5.1: Sales figures of autologous chondrocyte implants
Country n ACT/year Calculated sales volume*
Important companies/products Sales information from important companies
USA 2,000-3,000 € 16 – 24 mio. Genzyme Biosurgery/Carticel®
Sales of Carticel ®:
Sales 2001: 18.4 mio. US-$
Sales 2002: 20.4 mio. US-$
Germany 600 € 3 mio.
Verigen/ACI/MACI/MACI-A
co.don/co.don chondrotransplant®
BioTissue Technologies/BioSeedC®
Sales of co.don chondrotransplant®:
2000: 550,000 € (ca. 100 transplants plus 100 without
reimbursement),
2001: 1,000,000 € (260 transplants plus 80 without re-
imbursement)
Sales by BioTissueTechnologies
2002: 500.000 €, ca. 100 transplants
UK 300-850**
€ 1.5-4.3 mio. Verigen/ACI/MACI/MACI-A
**
Estimates by NICE of the number of potential ACT
operations in England and Wales
Italy 300-400 € 1.5-2 mio.
Fidia Advanced Biomaterials/
HYALOGRAFT® C
Spain 40 € 187,000 IsoTis/CellActive Cart Sales of IsoTis' CellActive Cart: 187,000 € in 2002
Total 3,240-4,850 € 22.2-33.3 mio.
* retail prices of €
5,000 /autologous chondrocyte transplant in Europe and € 8,000/transplant in USA. These costs do not include costs for sur-
gery and rehabilitation.
Source: Fraunhofer ISI Research 2003

32
Tissue-engineered cartilage products aim at repairing defects in stressed cartilage,
due to trauma or progressive degeneration. Table 5.2 gives an overview of the inci-
dences and prevalences of these defects, table 5.3 gives an overview of the corre-
lated monetary markets.
Table 5.2: Overview of frequencies of cartilage defects
Region Size Year Source
Germany 1.5 mio.
annual incidence of
treatable arthrosis3 2000
(Landesbank Baden-Württemberg
Equity Research 2001, p. 19)
Germany 1.4 mio.
patients suffering
from arthrosis
2002
(Concord Corporate Finance Re-
search 2002)
Germany 1.5 mio
patients suffering
from osteoarthrosis
2002
search 2002)
Europe 7 mio.* annual incidence of
treatable arthrosis
2000
USA 5 mio.* annual incidence of
treatable arthrosis
2000
World 15-20 mio.
annual incidence of
treatable arthrosis
2000
World 20 mio.
patients with joint
cartilage defects
2002
search 2002)
Germany 50.000
annual incidence for
knee injuries
2000
Germany 40.000
annual joint re-
placements with
knee prosthesis
1999 Biomet Merck
Europe 250.000* annual incidence for
knee injuries
2000
Equity Research 2001)
USA 600.000
arthroscopies linked
to cartilage defects
or injuries
2000
USA 400.000
articular cartilage
procedures
1997
(Isotis Corporate Communications
& Investor Relations 2003)
World 1.000.000** injuries or defects of
the knee
2000
*
estimation based on incidence in Germany
**
estimation based on data from Germany and USA
3 Due to the limited availibitiy of effective therapeutic options, patients with symptoms of arthrosis
are often not treated until the disease has progressed to a stage in which analgesic therapy or a
knee implant is indicated.

33
Table 5.3: Market sizes correlated with cartilage defects/cartilage repair
Region
Market
size (€)
Year Remarks Source
Europe 2 billions 1999
Market value for joint implants
(prosthesis costs only)
Biomet Merck
World 1.5 billions 1999
Market value for knee implants
(prosthesis costs only)
Datamonitor
USA 5.2 billions 2001
annual spending for total knee
replacement; estimation based on
incidence (200.000 patients/year)
and cost per treatment (26.000
US-$)
(Russell et al. 2001)
World 6.5 billions 2001
market potential of surgical pro-
cedures for cartilage regeneration
(Landesbank Baden-
Württemberg Equity
Research 2001)
World 25 billions 2011
market potential of surgical pro-
cedures for cartilage regeneration
(Landesbank Baden-
Württemberg Equity
Research 2001)
As can be seen from table 5.3, the potential markets for cartilage repair amount to
several billion €, and are thus very attractive. However, actual worldwide sales fig-
ures for ACT are unlikely to exceed € 40 mio.
That the presently accessible market for cartilage repair by tissue engineering is
much smaller than the potential market is due to the following factors:
• Restriction to traumatic cartilage defects. With the present technology of trans-
planting autologous chondrocytes in suspension and covering the transplanted
cells with a cover (e.g. periosteum, artificial cover), only those joint cartilage de-
fects can be treated which are due to traumatic injury (e. g. sports injuries).
However, the majority of joint defects is due to osteoarthritis or rheumatoid ar-
thritis.
• Restriction to knee joints. The surgical techniques by which the chondrocytes
can be introduced into the damaged joint are established only for knees, but can-
not readily be applied to other joints (e. g. hip, shoulder etc.). Due to these two
reasons approximately 90 % of the joint cartilage defects in the affected popula-
tion are not an indication for autologous chondrocyte transplantation using cell
suspensions.
• Compliance of patients. As it takes approximately six months of rehabilitation,
during which the treated knee cannot be fully used, a high compliance of the pa-
tients with a strict rehabilitation protocol is required. This restricts the market to
highly motivated, mostly younger patients. An artificial knee prosthesis, how-
ever, can bear weight already a few days after the surgery.
• Alternative treatment options. Because a partial or full knee prosthesis can bear
weight already a few days after the surgery, this option is preferred especially for

34
elder patients whose life expectancy correlates with the life span of the prosthe-
sis. The suppliers of joint prostheses continually optimize their products so that
the competition between cell based and prosthesis-based treatment options will
continue.
Company experts interviewed for this study assumed that the ACT variant of ma-
trix-induced ACT, which has recently become clinically and commercially avail-
able, much larger and lucrative market segments could be opened up which are not
accessible for cell suspensions:
• on the one hand, the easier surgical technique of matrix-induced ACT will sup-
port the further use of this technique among orthopedic surgeons,
• on the other hand, it may be possible to treat also osteoarthritic defects in the
knee, and perhaps also several types of cartilage lesions in other joints than the
knee.
In addition, new tissue-engineered products are in preclinical development which
combine cartilage and bone and might be used for the treatment of defects which
affect both cartilage and bone.
If the above mentioned assumptions proved true, matrix-induced chondrocyte trans-
plants could partially replace knee prostheses, could also offer an option for defects
which are presently not treated at all, and could – in the long term – postpone the
need for joint prosthesis for several years. The size of this additional segment can-
not be estimated with accuracy because the results from the ongoing clinical trials
must still be awaited. For the USA, the annual market for effective new repair tech-
niques is estimated at € 300 mio. to € 1 billion (Russell et al. 2001). Given the fact,
that actual worldwide sales for ACT do not exceed € 40 mio., this would be a more
than tenfold increase over the present market.
5.4 Factors influencing the market situation
In orthopedic surgery, the concept of cell therapy is rather new. Therefore, a certain
scepticism among orthopedic surgeons who are more used to prostheses, screws and
plates, must be overcome. Therefore, relatively large efforts have to be taken to
educate, convince and train these medical doctors. This also implies that the market-
ing activities are knowledge-intensive and must be carried out by relatively highly
qualified staff. Although strategic cooperations with medical device companies
which are active in the orthopedics market have been formed to improve the access
to the customers, experts are sceptical whether their marketing activities are appro-
priate for cell-based products.

35
The therapeutic success does not only depend on the quality of the chondrocyte
transplant, but also on the quality of the surgical procedure and the rehabilitation
protocol. Some companies, e. g. co.don in Germany, therefore follow a "Centre of
Excellence" concept. This means that also their customers must comply with quality
standards. This concept also makes it easier to obtain reimbursement for the trans-
plants either from health insurers or hospital funds.
At present, the main hindrance for expanding the ACT sales in the segment of
traumatic knee injuries is the fact that no general reimbursement of this treatment
by health insurances has been obtained so far in Europe, the only exception up to
now being Austria. In Austria, autologous chondrocyte transplantation is listed in
the "Leistungskatalog BMSG 2003 – Leistungsorientierte Krankenanstaltenfinan-
zierung" (Editor Bundesministerium für soziale Sicherheit und Generationen) as an
"costly diagnostic or therapeutic procedure". Since January 2003, Austrian hospitals
must document their health services according to this Leistungskatalog in order to
get reimbursement. As this "Leistungskatalog" came into force not before January
2003, figures are not yet available whether this different reimbursement practice in
Austria corresponds to an increase in autologous chondrocyte transplant sales.
Moreover, Austria is not the market which has been primarily targeted by the lead-
ing companies.
Review and approval procedures have been initiated e. g. in Germany with the
Bundesausschuss der Ärzte und Krankenkassen and in the UK with the National
Institute of Clinical Excellence (NICE). However, in 2000, these institutions came
to the conclusion that the evidence on ACT does not yet support the widespread
introduction of this technology into the respective national health systems
(Geschäftsführung des Arbeitsausschusses "Ärztliche Behandlung" des Bunde-
sausschusses der Ärzte und Krankenkassen 2000; Gibis et al. 2001; NHS Centre for
Reviews and Dissemination 2003; Jobanputra et al. 2003; Jobanputra et al. 2001).
Reviews of these decisions are ongoing, and may be due in 2003.
As decisions on general reimbursement of ACT are still pending, in the present
situation the reimbursement of the treatment costs has to be negotiated on a case-
by-case basis. Moreover, the policy of the health insurers seems to differ from
country to country, with companies perceiving Germany as being more prohibitive
and the Benelux countries as being more permissive. Some companies hold special
"reimbursement departments" which support patients and doctors in obtaining
treatment cost reimbursements.

36
6. Tissue engineered bone products
Tissue engineered bone addresses the bone repair market which is in principle a
very huge market of several billion €/year worldwide. Indications and market seg-
ments for tissue engineered bone products are (Concord Corporate Finance Re-
search 2002)
• Bone fractures. Most bone fractures are treated by standard therapies (see be-
low); however, appr. 10 % cannot be treated this way because the damaged sites
are too big. If tissue engineered bone could be used, it could be applied world-
wide in 1.5 mio. patients per annum. The most important markets are the USA
with 700,000 patients and Europe with 600,000 patients.
• Jaw bone surgery and periodontal surgery. The number of patients in this field
amounts to approximately 1.5 mio. patients in Europe and 4.5 mio. patients
worldwide.
• Osteoporosis and bone tumors. In Europe there are 10 mio. cases annually, the
worldwide potential sums up to 30 mio. applications.
Most bone fractures are treated by standard therapies. These are gypsum/plaster,
tape, nailing, screws and plates. Larger defects, due to fractures, surgery or tumors,
can be treated with autologous bone grafts which are taken from another site of the
patient’s body in a second surgical procedure. These grafts normally give the best
clinical results compared to other options. Another option are allogenic bone grafts
which are taken from other patients undergoing bone surgery or from cadavers and
stored in bone banks until used. Problems with these allogenic grafts lie in risk of
infection, higher bone resorption rates and variations in quality due to donor varia-
tion. A third option are synthetic bone materials such as calcium phosphate, hy-
droxylapatite etc. These materials, however, lack the power of rapidly inducing
bone formation. Moreover, bone from animal sources is being used. Most of these
xenogeneic bone materials are prepared from deproteinized bovine bone. In general,
xenogeneic bone can have better toxicological and bone-inducing properties than
synthetic bone materials, but bear the risk of infections (e. g. viruses, prions) and
rejection.
Table 6.1 gives an overview of the advantages and disadvantages of the different
treatment options in bone repair.

37
Table 6.1: Comparison of different bone repair approaches
type of
graft
rejection type of
material
infection availabil-
ity
type of
surgery
size of
grafting
shaping
autolo-
gous
grafts
no rejec-
tion
own ma-
terial
no risk of
infection
immedi-
ate but
limited
large
biopsy
and
transplan-
tation
limited no indi-
vidual
shaping
alloge-
neic
grafts
risk of
rejection
foreign
substance
risk of
infection
immedi-
ate but
limited
only
transplan-
tation
limited no indi-
vidual
shaping
synthetics generally
no rejec-
tion
transfor-
mation
into own
material
no risk of
infection
immedi-
ate, un-
limited
only
transplan-
tation
not lim-
ited
special
shape
available
xenoge-
neic
grafts
risk of
rejection
foreign
substance
risk of
infection
immedi-
ate, un-
limited
only
transplan-
tation
limited no indi-
vidual
shaping
autolo-
gous TE
products
no rejec-
tion
own ma-
terial
with os-
teoblasts
no risk of
infection
unlimited
but de-
layed
small
biopsy
and
transplan-
tation
not lim-
ited
shaping
by in-
jectable
bone
material
There are only few companies which have tissue engineered bone development
programmes. These companies are
• IsoTis SA (CH/NL). Until recently, IsoTis had a research programme for the
autologous bone product VivescOs, and an associated bioreactor production plat-
form. However, in the course of the recent restructuring and reorganisation, this
programme was cancelled. Instead, the scaffold OsSatura (without cells) has
been brought onto the market in 2003 after receiving approval in Europe. Os-
Satura is osteoconductive, i.e., it guides bone formation through its macroporous
structure, and also osteoinductive, i.e., it actively induces bone to grow in and on
the scaffold. OsSatura replaces an earlier product launched in late 2001, Os-
Satura PCH. The company expects OsSatura to become a major product. The
sales expectations are > 10 mio. € by 2005/2006, equivalent to 15-20 % of the
synthetic bone substitute market (see table 6.3). Although OsSatura is less pow-
erful than the tissue engineering approach followed until recently, the company
assesses OsSatura's cost of goods as much more favourable than the tissue engi-
neering option, whose additional therapeutic benefit would not justify the addi-

38
tional high costs (IsoTis press releases January 7, 2003; February 5, 2003; March
27, 2003). IsoTis best selling product in 2002 was SynPlug, a cement restrictor
for cemented hip replacements. It is CE certified. It was launched in 2001 and is
presently being sold through orthopaedic companies such as Smith & Nephew,
Centerpulse France, and ScandiMed (Biomet Merck), as well as through a range
of national distributors. Sales for the SynPlug in Europe amounted to € 646,000
in 2002.
• BioTissue Technologies (Germany). This company has an autologous bone
product on the market since November 2001. BioSeed®-Oral Bone is a three-
dimensional, jawbone graft from cultured autologous periosteum cells. It can be
used in the treatment of tooth loss with fixed dental prostheses. By strengthening
and replacing missing upper jaw bone material it supports the anchoring of den-
tal implants firmly into the jaw. Sales of BioSeed®-Oral Bone amounted to
€ 250,000 in 2002.
• co.don (Germany). Since 1997, co.don® has been manufacturing autologous
osteoblast transplants according to the German Drug Act (AMG) under the brand
name co.don osteotransplant®. The product is indicated in complicated fractures,
tumour based bone damages, pseudoarthroses, sarcomata and calcifications in
loosening or change of prostheses. Further indications are the reconstructive and
plastic surgery, jaw bone surgery and bonechip blocking of spine segments in
case of severe degenerated disks.
• Osiris Therapeutics, Inc (USA). Osiris Therapeutics is a privately held devel-
opment stage company, focusing on cellular therapeutic products for the regen-
eration and functional restoration of damaged and diseased tissue. The therapeu-
tic products are derived from human mesenchymal stem cells (hMSCs) ex-
tracted, isolated and purified from adult bone marrow. Osiris specialises in the
differentiation of hMSCs into different specialised cell types, among them bone.
The product Osteocel is bone regenerated from autologous mesenchymal stem
cells for orthopedic and dental defects. In 2002, a small Phase 1 human safety
trial was completed in which autologous hMSCs were delivered on a hydroxya-
patite matrix into the jaw to promote new bone formation in preparation for den-
tal implants. The results of that study demonstrated significant new bone forma-
tion with no adverse events. Moreover, the feasibility of fully MHC mis-matched
allogeneic MSCs to repair large segmental defects have been demonstrated in a
baboon preclinical model. Ongoing studies are focused on the ideal composition
of a matrix and the Adult Universal Cell hMSC product for delivery to load-
bearing, long bone defects.
• CellFactors (UK). CellFactors focusses on the development of human cell-
based therapies by generation and manipulation of immortalized, partially diffe-
rentiated human cells. One of the company's areas of focus are protein matrices
(orthobiologics) for bone regeneration. CellFactors lead product for bone regene-
ration is SkeletexTM
. This osteoinductive material consisting of growth factors

39
and collagens has the potential to increase the strength of weak or damaged bo-
nes, or to create new bone where required. CellFactors is developing Skeletex™
for use in conjunction with existing orthopaedic devices and prosthetics (e.g. in
spinal fusion, artificial hips and knees), as well as for dental applicati-
ons.CellFactors plc demonstrated its ability in January 2003 to manufacture Ske-
letex™ consistently to meet industrial requirements so that the material can be
produced in sufficient quantities for full-scale commercial production. CellFac-
tors is currently in negotiations with a number of orthopaedic companies to
supply Skeletex™ for a range of applications. Contract Manufacturing Organisa-
tions have now been identified and assessed for commercial-scale production of
Skeletex™.
Several companies are offering growth factors and bone morphogenic proteins.
Among them are
• Curis, Inc. (USA). Curis resulted from a merger of Creative BioMolecules Inc.
(USA) with Ontogeny, Inc. (USA) and Reprogenesis Inc. (USA) in July 2000.
Curis is a therapeutic drug development company. The Company's technology
focus is on regulatory pathways that control repair and regeneration, among them
the Hedgehog (Hh) pathway and the Bone Morphogenetic Protein (BMP) path-
way. Development of several therapeutic products is in early to late preclinical
stages.
• Wyeth (USA). Wyeth carries out discovery, development, manufacture, distribu-
tion and sale of pharmaceuticals and over-the-counter consumer health care
products. Among its products in the pipeline is hBMP-2, a recombinant human
bone morphogenetic protein 2. It is approved in the EU and is currently in U.S.
regulatory review for treating patients with acute long-bone fractures requiring
surgical management. Its use in spinal fusion is being investigated in cooperation
with Medtronic Sofamor Danek. The product is approved and launched in the
U.S. for lumbar interbody spinal fusion. It is in Phase III trials for lumbar poster-
olateral spinal fusion. Additional uses for rhBMP-2 are being investigated in ear-
lier development phases.
• Medtronic Sofamor Danek (USA). Medtronic Sofamor Danek develops and
manufactures products that treat a variety of disorders of the cranium and spine,
including traumatically induced conditions, degenerative conditions, deformities
and tumors. In 2002, U.S. Food and Drug Administration (FDA) approved Med-
tronic Sofamor Danek's INFUSE™ Bone Graft/LT-CAGE™ Lumbar Tapered
Fusion Device. This device is used to apply INFUSE™ Bone Graft in spine sur-
gery in order to treat degenerative disc disease. The bone graft contains recombi-
nant human bone morphogenetic protein (rhBMP-2), that is capable of initiating
bone growth, or bone regeneration, in specific, targeted areas in the spine. De-
velopment projects of combining threaded cortical dowels and Bone Morphoge-
netic Proteins (BMP) are underway.

40
• Stryker Corporation (USA). Stryker Corporation develops, manufactures and
markets specialty surgical and medical products globally. The products include
orthopaedic implants, trauma and spinal systems, powered surgical instruments,
endoscopic systems, and the bone growth factor osteogenic protein-1 (OP-1).
Marketing authorization was obtained in 2001 for OP-1 by Australia, the Euro-
pean Union and the United States for specific indications involving long-bone
fractures. Stryker is also investigating spinal applications for OP-1 through clini-
cal trials in North America and Japan.
• Orquest, Inc. (USA). Founded in 1994 and employing a staff of 25, Orquest,
Inc. is a orthobiologics company that designs, develops, manufactures and sells
materials that accelerate and enhance bone repair and regeneration. Orquest's
unique product portfolio is based on two proprietary core technologies. Its bone
graft substitute Healos® is approved for sale in Europe, and Ossigel®, an in-
jectable product designed to improve fracture healing, is currently under clinical
investigation in Europe. Healos®MP52 is combination of Healos and the bone
inducing protein MP52. MP52 is under clinical investigation in Europe.
There are many companies which offer biomaterials and synthetic bone fillers.
Among them are
• Biomet Merck Group (The Netherlands). Founded in 1998 as a joint venture
of Biomet Inc. (USA) and Merck KGaA (Germany), the company is specialised
in the development, production and marketing of products for the therapy of
bone and soft tissue diseases. It combines expertise in pharma and chemistry,
biomaterials, drugs, orthopaedics and implants.
• Interpore Cross International (USA). Interpore Cross International develops
and applies biologic biomaterials to speed bone repair. It has three products on
the market: AGF technology, which allows the surgeon to collect autologous
growth factors from the patient's blood and to combine it with bone grafting ma-
terial in order to support healing. ProOsteon is a hydroxyapatite bone grafting
material harvested from marine coral exoskeletons. BonePlast is an extrudable,
moldable bone void filler based on calcium sulfate.
• Orthovita (USA). Orthovita is a biomaterials company which develops novel
products for use in spine surgery and in the repair of osteoporotic fractures. It has
two products on the European market: VITOSS®, a resorbable calcium phos-
phate bone void filler, and CORTOSS®, a Synthetic Bone Void Filler, is a high-
strength, bone-bonding, self-setting composite engineered specifically to mimic
the strength characteristics of human cortical bone.
Other players and competitors in the field are large orthopedic companies, which
offer “conventional” treatments, e. g.
• Stryker Corporation (see above).

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