Has Orthovita's Fight Finally Ended?

Article preview reprinted from IN VIVO -  December/January, 2010

Orthovita had spent the past eight years building up a small commercial pipeline while it ran its flagship bone augmentation material Cortoss through years of a demanding clinical trial. But two months after the FDA approved the product, the company had to clear another unforeseen hurdle: two controversial clinical trials. Read more...

Has Orthovita's Fight Finally Ended?

Article preview reprinted from IN VIVO -  December/January, 2010

Orthovita bills itself as a "specialty spine" company that sells products focused on the healing process.

While running its lead product, Cortoss, through clinical trials, the company built up its sales infrastructure via a pipeline of soft tissue products promoting bone growth and tissue healing.

Just as Cortoss received FDA approval, Orthovita management had to confront the results of two clinical trials published in the New England Journal Medicine attacking the company's principal target—vertebroplasty.

Nonetheless, its principal product is in place and the company now looks poised to fulfill its long-held potential.

Antony Koblish didn't flinch. The CEO of Orthovita Inc. was laying out his complaints about the results of two studies published last summer in The New England Journal of Medicine (NEJM) that suggested vertebroplasty procedures offer no clinical benefit to patients. Then something nearby--a big something--exploded. The conference table rattled a bit, but Koblish kept right on talking. "There's a quarry nearby," Nancy Broadbent, the company's new CFO, explains to a visitor, cutting Koblish off. "Yeah, doesn't bother us at all," Koblish adds, giving the first sign he heard the explosion. Turning to Broadbent, he says, "You're still getting used to it, I think."

It's a good thing for Orthovita that Koblish is comfortable with disruptions. The publicly traded orthopedic biomaterials company endured an explosion of sorts in August when the NEJM published two articles calling the efficacy of vertebroplasty into question. The highly critical—and criticized—reports sparked a wildfire of questions about the clinical necessity of vertebroplasty—the injection of bone cement into a fractured vertebral body. Politicians, reporters, anyone with an interest in targeting so-called wasteful spending on health care pointed to the studies as evidence that medical technology and unnecessary procedures inflate the country's health care costs. Here, they screamed, was the proof.

Orthovita, as a result, found itself in the unenviable position of defending what some saw as a questionable procedure. It wasn't alone. Spinal surgeons defended the practice, individually and en masse. (See "Despite Surgeon Support, NEJM Vertebroplasty Articles Spark Slowdown, Reimbursement Review," IN VIVO, December 2009.) But the stakes were highest for Orthovita. Cortoss, its long awaited glass-resin based biomaterial, had just cleared the FDA in June, giving spinal surgeons their first approved alternative to polymethylmethacrylate (PMMA), the bone cement currently injected into vertebral bodies during vertebroplasty and kyphoplasty procedures. Orthovita had just spent over four years and $20 million running the injectable biomaterial through exhaustive clinical trials for a 510(k). The studies involved more than 250 patients, with two years of comprehensive follow-up. With approval in hand, Orthovita's 100-person sales force had hit the ground running in late July, hoping to capitalize on the approval and leverage the contacts and networks built to sell Orthovita's other surgery products.

Then the NEJM published the two studies, robbing the company of its momentum.

For Orthovita, Cortoss is worth the fight. Orthovita executives project that the bone augmentation material will account for one-third of the $300 million in projected annual revenue in five years, and that revenue comes only from the anticipated use in vertebroplasties. Company executives plan to try to expand Cortoss' label beyond vertebroplasties, with pedicle screw augmentation an obvious piece of low-hanging fruit. (Cortoss already holds a CE mark approval for that use in Europe.) Equally important, the product fits tightly into Orthovita's product portfolio along with its Vitoss bone graft substitutes and surgical hemostats, Vitagel and Vitasure. Christopher H. Smith, Orthovita's VP of sales, says Cortoss will open doors to the surgical suite for the company's sales team, presenting them with a greater opportunity to sell its entire line of products. Cortoss also gives Orthovita a reason to call on interventional radiologists and other specialists who work outside the hospital setting. "Orthovita already had some compelling products in Vitoss foam, Vitagel, and Vitasure," says Matthew Dolan, an analyst at Roth Capital. "But Cortoss gives them a bigger opportunity than they've faced in the past."

Tom Salemi  

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