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Editor’s Note: Orthobiologics play a role in every orthopedic market segment; therefore, the importance of their advancements affects the industry as a whole. We asked Andy Carter, Ph.D., Chief Technology Officer at TheraCell, to give his insight on the orthobiologics market—as it stands now, and where it’s heading in the near future. His comments originally appeared in ORTHOWORLD’s Annual Report.
Market health
The orthobiologic market is fragmented. Mainstream orthopedic and spine products are not integrated with specific orthobiologics. A large number of undifferentiated products are available on the market, in part due to low regulatory barriers to entry. These factors have led to over-genericization and commoditization that, coupled with a lack of outcomes data, have resulted in significant downward price pressure in the sector.
The players within the market are equally fragmented. Drivers of new and novel technology are not the big, diversified players in orthopedics and spine, but rather innovative, small orthobiologic companies.
Surgeons want integrated solutions that make their O.R. time efficient, while hospitals are concerned about cost and seek compelling data to support the acceptance of new products. Payors demand data to support the use of products, particularly those that are unregulated and have little or no preclinical or clinical data to support their use.
Product and Player Trends
Orthobiologic materials must become more procedure-specific and work seamlessly with surgical procedures and instrumentation. Purely orthobiologic companies typically have only the biologic material or substance, which makes it difficult to make products procedure-specific. True innovators in this space will focus on a holistic approach to a procedure, from start to finish, including instrumentation, material and growth agents to provide everything the surgeon needs throughout the whole procedure. Rotation Medical, recently purchased by Smith & Nephew, was one of these innovators that addressed the entire procedure, making their technology and company attractive to acquirers.
Demineralized bone putties with excipients are rapidly being replaced by demineralized fiber products without excipients, because they have a higher concentration of bioactive material, are osteoconductive and command a higher price. Procedure-specific forms of this material (fiber boats, as an example) can command a price premium.
In the viscosupplement area, I am watching OrthogenRx and Anika Therapeutics—will the market split into generic and high-priced products? My eye is also on Cerapedics and TheraCell in the bone grafting arena, and Viscogliosi Brothers, with their next-generation bone morphogenetic portfolio.
Future Market Forces
Looking forward, price pressure will continue to act as margin headwind for undifferentiated solutions. I expect that larger players will recognize the need to be technology leaders in their entire space. These companies are starting to recognize that they cannot leave leadership in orthobiologics to other players, and they seek to control the operational, product development and commercial aspects of this business in the future; otherwise, they’ll be left behind. Further opportunities exist for innovative products that, rather than being just another “cell” or “factor,” include novel means for improving the environment into which the biologic is implanted. For example, TheraCell is applying for FDA 510(k) clearance for orthobiologics that include high-oxygen solubility materials to perfuse the graft area with oxygen, aid diffusion of oxygen throughout the graft and provide a favorable aerobic environment for cells and metabolism.
A factor that could stall innovation in this space is that small companies typically cannot afford to execute large clinical trials in order to collect the data that is needed to satisfy regulators, payors and hospitals. Large orthopedic and spine companies continue to watch the technology progress from afar, only investing when the technology is proven through market access and adoption.
Editor’s Note: Orthobiologics play a role in every orthopedic market segment; therefore, the importance of their advancements affects the industry as a whole. We asked Andy Carter, Ph.D., Chief Technology Officer at TheraCell, to give his insight on the orthobiologics market—as it stands now, and where it’s heading in the near future. His...
Editor’s Note: Orthobiologics play a role in every orthopedic market segment; therefore, the importance of their advancements affects the industry as a whole. We asked Andy Carter, Ph.D., Chief Technology Officer at TheraCell, to give his insight on the orthobiologics market—as it stands now, and where it’s heading in the near future. His comments originally appeared in ORTHOWORLD’s Annual Report.
Market health
The orthobiologic market is fragmented. Mainstream orthopedic and spine products are not integrated with specific orthobiologics. A large number of undifferentiated products are available on the market, in part due to low regulatory barriers to entry. These factors have led to over-genericization and commoditization that, coupled with a lack of outcomes data, have resulted in significant downward price pressure in the sector.
The players within the market are equally fragmented. Drivers of new and novel technology are not the big, diversified players in orthopedics and spine, but rather innovative, small orthobiologic companies.
Surgeons want integrated solutions that make their O.R. time efficient, while hospitals are concerned about cost and seek compelling data to support the acceptance of new products. Payors demand data to support the use of products, particularly those that are unregulated and have little or no preclinical or clinical data to support their use.
Product and Player Trends
Orthobiologic materials must become more procedure-specific and work seamlessly with surgical procedures and instrumentation. Purely orthobiologic companies typically have only the biologic material or substance, which makes it difficult to make products procedure-specific. True innovators in this space will focus on a holistic approach to a procedure, from start to finish, including instrumentation, material and growth agents to provide everything the surgeon needs throughout the whole procedure. Rotation Medical, recently purchased by Smith & Nephew, was one of these innovators that addressed the entire procedure, making their technology and company attractive to acquirers.
Demineralized bone putties with excipients are rapidly being replaced by demineralized fiber products without excipients, because they have a higher concentration of bioactive material, are osteoconductive and command a higher price. Procedure-specific forms of this material (fiber boats, as an example) can command a price premium.
In the viscosupplement area, I am watching OrthogenRx and Anika Therapeutics—will the market split into generic and high-priced products? My eye is also on Cerapedics and TheraCell in the bone grafting arena, and Viscogliosi Brothers, with their next-generation bone morphogenetic portfolio.
Future Market Forces
Looking forward, price pressure will continue to act as margin headwind for undifferentiated solutions. I expect that larger players will recognize the need to be technology leaders in their entire space. These companies are starting to recognize that they cannot leave leadership in orthobiologics to other players, and they seek to control the operational, product development and commercial aspects of this business in the future; otherwise, they’ll be left behind. Further opportunities exist for innovative products that, rather than being just another “cell” or “factor,” include novel means for improving the environment into which the biologic is implanted. For example, TheraCell is applying for FDA 510(k) clearance for orthobiologics that include high-oxygen solubility materials to perfuse the graft area with oxygen, aid diffusion of oxygen throughout the graft and provide a favorable aerobic environment for cells and metabolism.
A factor that could stall innovation in this space is that small companies typically cannot afford to execute large clinical trials in order to collect the data that is needed to satisfy regulators, payors and hospitals. Large orthopedic and spine companies continue to watch the technology progress from afar, only investing when the technology is proven through market access and adoption.
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AC
Andy Carter an executive with over 30 years of medical device experience, primarily in orthopedics, biomaterials and tissue engineering. Dr. Carter has worked both in large corporations, startups and small companies and has managed both research and development programs.
