Arthro Kinetics

Source: Exec Digital UK

Date :03/07/2008 17:02:45

Making regeneration a reality

Written by Ian Armitage and Produced by Kiron Chavda

Arthro Kinetics is a company dedicated to biological solutions for tissue regeneration and repair. Its novel implants are all manufactured from a proprietary 3-D collagen matrix, used either in combination with cells derived from patients, or in cell free forms. These can be used to replace or repair tissues in the body which are composed mainly of collagen - knee cartilage, spinal intervertebral nucleus pulpossa, ligament and meniscus.

The company, like the technology it pioneers, is relatively young, and was formed in 2006 by the merger of EKL Ltd and Ars Arthro AG. Neither company was particularly old at the time, which tells you all you need to know about how “fresh” the technology - and the company - is.

According to Dr Jason Loveridge, Arthro Kinetics’ CEO, EKL Ltd was founded in 2002 by Martin Knight, a leading spinal surgeon who “began to develop and sell advanced instrumentation for minimally invasive spine surgery.” Ars Arthro AG, on the other hand, was founded in 1999, and grew out of some promising technology that originated within the Fraunhofer Institute for Interfacial Engineering and Biotechnology (IGB) in Stuttgart.

Dr Thomas Graeve, now Arthro Kinetics’ CSO, pioneered the concept of a three-dimensional joint cartilage implant using autologous chondrocytes implanted in a collagen matrix. The resulting commercial product - CaReS - is currently one of the largest selling cartilage implants in Europe (and is manufactured and marketed by Arthro Kinetics).

CaReS is an innovative implant which is based on Arthro Kinetics’ patented 3-D collagen matrix and is used by surgeons to repair damaged cartilage. “It provides an environment for tissue repair that very closely resembles your natural, existing cartilage,” he continues.

Arthro Kinetics’ proprietary “collagen matrix” is different from anything else on the market and provides an environment for an extract of a patient’s own cells to “regenerate and restore natural tissue function,” says Loveridge.

“Our business is based on providing the best possible solutions for tissue repair,” he adds. “We are very focused on knee and spine with the goal of developing products which facilitate the regeneration of tissues such as cartilage. Although our early work was mainly in the knee, our recent research has yielded a solution for nucleus replacement which we believe has tremendous potential to help alleviate lower back pain. Although these solutions are still in development, Arthro Kinetics hopes that this project will advance into humans in 2009.

“At Arthro Kinetics we are, of course, very R&D orientated and have several development projects ongoing which we believe will provide both significant commercial reward as well as patient satisfaction.”

Two of these development projects – which go by the names of CFI and Nucleus Replacement Implant - are beginning to gain recognition amongst physicians and a great deal is expected of them. “CFI provides an innovative, simple solution for the repair of cartilage and, we hope, pain relief for patients with degenerative joints,” says Loveridge. “It is called CFI because it’s a Cell Free Implant and it’s shown promising results in the repair of both small and large cartilage defects of the knee.”

Indeed, the results of Arthro Kinetics’ animal studies with CFI demonstrate “not only that CFI can achieve both excellent filling of the defect and bonding of the implant to the surrounding healthy tissue, but that the repair or regeneration of the implant is provided by the patients’ own existing cells which migrate in-situ into the implant”.

From a commercial perspective CFI represents a real paradigm shift in patient care as it is a sterile, off-the-shelf device that can be implanted easily in a single surgery. All existing solutions require cells to be taken from the patient and therefore the surgeon has to operate twice, once to get the cells out and a second time to put them back.

A 15 patient trial commenced last year and, if CE approval is granted in 2008, then CFI will be available to European patients and surgeons as early as January 2009.

The second project is a Nucleus Replacement Implant, where Arthro Kinetics is using its proprietary collagen matrix to develop another novel, cell free implant which – in this case - would be used to treat degenerative disc disease.

“Our nucleus replacement implant is at an earlier stage of development than CFI, but again we are seeing excellent pre-clinical data which would suggest we can at least address the severe biomechanical demands that any human spine implant must satisfy. We will begin some larger animal studies in the second half of this year to try and see if we get the same in-growth of local cells into our implant, facilitating repair and regeneration, and if this goes as we hope then our goal will be to initiate a first-in-man study early next year.”

Global pursuit

Arthro Kinetics has been successful in attracting licensees for its CaReS product in Japan, Turkey and Australia, and in 2007 formed a joint venture company for the manufacture and sale of CaReS in China – clearly a very substantial market.

AKI had already successfully treated the star player of the Chinese women’s volleyball team with CaReS in 2007 in an effort to rehabilitate her in time for this year’s Beijing Olympics.

The Chinese entity goes by the name of Arthro Anda Tianjin Biologic Technology Co Ltd and products will be manufactured in the JV’s facility in Tianjin for sale in China, Taiwan and Hong Kong. “We own around 15 percent of the joint venture company and have two seats on its board, so we are quite active,” says Loveridge. “Local manufacturing of CaReS in Tianjin is expected to begin by the end of this year.”

In 2007, Arthro also signed a ‘Development and Licence Agreement’ with Polaris Rx Corporation, Tokyo, to commercialise CaReS in Japan. Japan represents the second largest medical device market in the world behind the US and is full of potential.

Most medical devices sold in Japan are also actually manufactured in Japan, leading Loveridge to continue, “Japan is a significant market but always a difficult one to enter.” He adds: “We decided that the best approach was to partner with a local group with a good understanding of the local market and significant local regulatory experience.

Polaris Rx will be responsible for the approval of CaReS in Japan and will produce the product locally in its facility in Kobe using collagen matrix manufactured in our facility in Krems (Austria).”

As with all of its licensees, one goal for Arthro Kinetics in these deals is to generate upfront fees, as well as a continuing revenue stream. And in the case of CaReS, where AKI is not the direct seller, the supply of collagen matrix for local CaReS production will provide this additional source of revenue for AKI.

Platform for growth

Arthro Kinetics floated on the AIM in March 2006, but by year end the company’s CEO had departed and sales had failed to meet expectations. Under the guidance of Dr. Loveridge, 2007 saw Arthro Kinetics initiate a significant restructuring program that resulted in a radically improved trading position, more consistent revenue growth and a stronger outlook. Revenue growth actually increased 49 percent in 2007.

Although CaReS remains the company’s only marketed biological implant today, biologics are seen as the heart of the company’s future. “We are focused on biological solutions for tissue repair and are confident we have a very valuable pipeline of new products to drive growth in 2008 and beyond,” says Loveridge. “Our efforts to restructure in 2007 are beginning to pay off and we expect that new products - like CFI - will significantly enhance our value.”

The future is indeed bright for a company that is “still very much at the developmental stage”.

“We are still restructuring in the sense that we are reshaping the business with a strong emphasis on biological implants as the main area of investment and product development,” says Loveridge. “We have a well differentiated approach to tissue regeneration which we know works well, but whereas in the past we were focused on cell based solutions, we now have sufficient experience with products like CFI to know that our collagen matrix does not need cells to repair damaged tissue.”

Although we’re getting older, we all want to be active and healthy. Patient expectation for pain free mobility in old age is increasing and Arthro Kinetics’ advanced biologic implants for the regeneration of joint surfaces will likely have a significant role in meeting this demand.

“Arthro Kinetics has invested significantly in its collagen based technology and is now in a good position to build value for its shareholders through the introduction of novel cell free solutions for tissue repair,” concludes Loveridge.

Exec wishes him and Arthro Kinetics the very best of luck.

Click here to view the corporate brochure on Arthro Kinetics