7
opment and hopes to have a product
in clinical trials soon.
BSR believes Genzyme Biosur-
gery's Carticel has two distinct ad-
vantages over allografts for treating
damaged cartilage. First, the cells are
autologous, so there is little chance
that a new infectious agent will be
introduced into the patient. And sec-
ond, because it is autologous, the pa-
tient's immune response will not re-
ject the graft. In fact, arthroscopic
analysis of Carticel implants reveals
that the cells do adhere to the repaired
site. In some instances, the implants
may overgrow, causing some difficul-
ties that require removal of the over-
growth.
Unfortunately, with all proce-
dures there are downsides, and Car-
ticel is not immune. Our primary con-
cern is the growing of cells in culture.
For Carticel, the patient's chondro-
cytes are grown in culture for nearly
five weeks, which is a sufficient
amount of time for the cells to lose
some of their normal function. How-
ever, the fact that Carticel has been on
the market for five years strongly sug-
gests that chondrocytes are not sig-
nificantly affected by this procedure.
Secondly, Carticel is not for all pa-
tients. The Carticel process is cur-
rently approved for patients that have
damaged cartilage on the femoral sur-
face, and not for the surface of the
tibia.
There are additional concerns that
are not necessarily limited to Carticel.
First, the procedure involves two sur-
geries, one for the biopsy and the sec-
ond, more involved surgery for im-
planting the cells. Orthopedic sur-
geons don't necessarily want to per-
form more surgeries, as surgeries can
lead to infections. Additionally, since
the second surgery is more involved,
there is increased recuperation time
required for the patient. This is some-
thing that concerns most physicians,
as deviation from a rehabilitation plan
recommended by your surgeon can
adversely affect the outcome of the
procedure. And third, the patient
should be restricted from athletic ac-
tivities involving running and jump-
ing for twelve months or more. Gen-
zyme is investigating methods to im-
prove the surgical procedure so that
Carticel can be implanted via arthros-
copic surgery. This would be a sig-
nificant advantage, as the procedure
is less invasive and would involve a
shorter recuperation period.
Final Thoughts
The ability to heal wounds that
cannot be facilitated with a bandage
or stitches represents huge market
potential. The biotech companies that
we discussed, in our opinions have
products in the pipeline or on the
market that should aid in wound
healing and collect the financial re-
wards.
BSR purposely did not ad-
dress the use of stem cells; we do not
think these types of immature cells
are suitable for wound healing, at
least not the wounds that we dis-
cussed here. Advances in methods to
heal various types of wounds will
significantly improve patient quality
of life, which is the true purpose and
promise of biotechnology.
*****
On the following pages are featured companies and a list of pharmaceuticals and biotechnology companies who have or are developing drugs or diag-
nostics for a disease(s). The list contains competing companies who in our opinion have interesting therapeutics and may not be mentioned in our newsletter due to
lack of space. The companies are either: (a) pharmaceuticals, (b) companies having drug product(s) approved for marketing, and have growing product revenues,
(c) companies having promising drug candidate(s) in late stage clinical trials, and are expected to turn profitable in the next few years and (d) companies in pre-
clinical testing or early stage human clinical trials, and are not expected to turn profitable for years. Some of these companies may not be suitable for every ac-
count, depending on investment objective, risk-tolerance and financial situation.
The stock price of emerging biotechnology companies with no significant commercial products may appreciate in value based on significant clinical
trials progress with potential new drug therapies, not on current revenue and earnings. Depending on the clinical trials phase results, the stock performance of
emerging public biotechnology companies may appreciate several times over the company's initial offering price. This price-appreciation potential creates signifi-
cant interest among risk tolerant, growth-oriented investors.
BioTech Sage Report, January 2001
