Spinal Restoration, Inc.
December 17, 2012 Issue
The Most Powerful Name In Corporate News and Information
Spinal Restoration Inc. is currently in a clinical study with their landmark Biostat System that will allow them to be the first to market with a cost effective, nonsurgical, biologic treatment for chronic discogenic low back pain
About Spinal Restoration:
Spinal Restoration has dedicated itself to restoring patients’ lives by delivering new, early intervention, minimally invasive therapies with clinically proven results that will address unmet needs in spine health management. Spinal Restoration, Inc. is positioned to be first to market with a cost effective, nonsurgical, biologic treatment for the most significant unmet need in spine health management–chronic discogenic low back pain.
In July 2012, Spinal Restoration completed enrollment of its landmark Biostat System clinical study, a prospective, randomized, blinded, placebo controlled Phase III Investigational New Drug (IND) study of the Biostat System for the treatment of discogenic chronic low back pain (CLBP).
The Biostat System is a
nonsurgical procedure, which delivers a percutaneous injection of BIOSTAT
BIOLOGX® Fibrin Sealant into a painful intervertebral disc where it forms a
resorbable tissue repair scaffold and stimulates the normal healing process
of the damaged disc tissues responsible for discogenic pain.
Spinal Restoration, Inc.
9737 Great Hills Trail, Suite 250
Austin, Texas 78759
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published –December 17, 2012
Mr. Sabins: Our vision is centered on finding a treatment for our patient population, which today has very limited options as it relates to reducing chronic low back pain.
CEOCFO: What is the approach you are taking and how does it differ from current approaches or current treatments?
Mr. Sabins: This is a nonsurgical, percutaneous procedure. It will be a very cost effective, biologic treatment for the most significant segment of the spine pain population. There are about 4 million patients annually that suffer from this condition. There are really very poor treatment options for these patients today. Today, most patients go through conservative care, which includes physical therapy, steroid injections, medications including opioids, a variety of treatments such as acupuncture, and/or they go on to surgery. For this patient population, the efficacy associated with those treatments is limited and with surgery in this patient population, it is really a coin toss as to how well they will do. There is not a good option for them today, and because we are a cost effective biologic, minimally invasive, nonsurgical approach, we think it is the right treatment for not only the patients, but also the physicians as well as the payers.
CEOCFO: What is your treatment? How does it work?
Mr. Sabins: It is a human-derived blood protein that is injected into the intervertebral disc within your spine. In your back, there are intervertebral discs between the bones that are basically the shock absorbers or the pillows between the bones in your back. Those start to wear out; they get cracks and fissures in them and basically turn into chronically inflamed wounds within the disc space. The treatment is an injection of our biologic therapy into those cracks and fissures. It ultimately seals those cracks and fissures and forms a three-dimensional fibrin matrix that seals the fissures and serves as a conductive scaffold for soft tissue repair. With our treatment, I am getting to you as a patient earlier in the continuum of care, versus waiting until the disc is totally degenerated, and ultimately you would need to go on to surgery.
CEOCFO: How do you get this blood protein; what made you think it would work?
Mr. Sabins: This product is actually manufactured by our partner Baxter Healthcare. It comes from human-pooled blood; it is actually fractionated in Vienna, Austria, and the components in our biologic are: fibrinogen and thrombin. Those two components are then reconstituted with calcium chloride and synthetic aprotinin, where they are then ultimately injected into the disc. When those two components come together, they basically form an epoxy, if you will, for illustration purposes, and it sets up very rapidly. If you can think of when you get a credit card in the mail, there is a little sticky stuff on the paper holding that credit card on there; this material acts just like that as soon as the fibrinogen and thrombin come together. We have a proprietary mixing device that allows you to put this material into the disc in a slow and safe manner. This proprietary device is attached to a seven-inch spinal needle that will allow you to get this material down into the disc; allow it to flow through the cracks and fissures of the disc and have that material setup in the disc, so it can ultimately do what it is supposed to do. It ultimately absorbs over time, but the primary modes of action are to knock down the inflammation with the synthetic aprotinin that is in this formulation, and then lays down this fibrin matrix that will allow your host cells to stimulate the normal healing process of the disc.
CEOCFO: Is it the concept, formulation, or both that you have figured out that others have not?
Mr. Sabins: This product is made by Baxter for a different application today. It is on the market in the United States, and has been since about 1998. It has been on the market in Europe since the late 1970s, but nobody has ever tried this product in the disc. The formulation is a formulation that Baxter has approval for in the United States for different applications, and we are going through all of the animal work, pilot study work, and Phase III clinical trials to prove not only safety, but efficacy in this application.
CEOCFO: What is the back-story, why did you decide to look for this use? What is the history behind the concept?
Mr. Sabins: A physician in Idaho, along with several of his colleagues originally thought that injecting steroids in and around the disc would relieve the pain. They thought that if they put this biologic with steroids they would stay in place longer and have a better outcome. The reality is that that formulation of steroids plus this biologic ultimately did not work as well as this biologic on its own. They were trying to extend the useful life of steroids in patients, but when we did the animal work and the pilot work, we found out that this formulation on its own, which has synthetic aprotinin already in it, which is a known anti-inflammatory worked much better than the biologic plus steroids. The intellectual property that this physician had put together with his colleagues was purchased by the company, and that was the genesis of this company.
CEOCFO: Has the medical community been paying attention?
Mr. Sabins: Yes, they have been; we certainly have had many discussions with potential strategic acquirers, as there is not a good option for this patient population today. Most of the traditional spine market products are centered around problems that you can see on x-ray or MRI imaging. These problems include conditions such as: herniations, spinal stenosis, verterbral compression fractures or spondylolisthesis and many times the treatments are centered around metal and plastic hardware products such as artificial discs, or fusion, or some other procedure that is removing tissue and replace it with something else. With this technology, there are no bridges burned by doing it. I can put this in and if patients get pain relief for six months, or one year, or two years, there is no bridge burned, and if they ultimately need to go on to surgery later in life that is a possibility or this may ultimately help them for longer periods of time.
CEOCFO: What are the numbers of people suffering with back pain?
Mr. Sabins: The numbers that we work from, if you use the total patient population, there are about 220 million adults that are over eighteen. There are about 100 million who experience low back pain annually, but many of those patients, pain is self-resolving. It is estimated that about 10-15% of that 100 million go on to be chronic low back pain sufferers. For arguments sake, if you use 12 ˝ %, that is about 12 ˝ million people that suffer from chronic lower back pain, which means their pain has lasted longer than six months. We see many, many, many patients that have been out multiple years with chronic low back pain. There is additional diagnostic work that has to be done to determine that the pain is coming from the disc. The patient that has stenosis or herniation, you can see that under imaging, and the doctor does a neurological examination and it is clear that there is something that you can see is wrong. Again, those people go into that percentage of patients that might have some type of surgery done. The other 80% of the patients need additional diagnostic blocks done to ultimately figure out where the pain is coming from. It could be the sacroiliac joint, it could be the facet joint, or it could be the disc. Our patient population is those where the pain is coming from the disc, and the literature would suggest that it is about 40% of that 12 ˝ million patients that suffer from chronic pain. Our best estimate is that it is about 4 million people annually in the total available market, and the potential available market for people that are seeking treatment for this type of disorder today is estimated to be about 900,000-1 ˝ million patients. If you couple that with what we are anticipating selling this for, the market is somewhere between 1 ˝ billion and 2 ˝ billion dollars.
CEOCFO: You mentioned Phase III clinical trials; can you tell me where you are in that process, and what are the next steps?
Mr. Sabins: I will give you just a quick history of where we have been. We have done preclinical work; we have done animals as well as in vitro study. We did a fifteen patient pilot study and we have just completed enrollment of a Phase III FDA regulated clinical trial, and we will have audited safety and efficacy data in April of next year. Our primary endpoint is six months pain relief, and we look at that through the VAS, the Roland-Morris Disability Index and also having no neurological complications as success criteria. We will compare the Biostat System success to that of a saline control group to determine overall success. We will have that data, again, at the end of first quarter next year.
CEOCFO: What do you see a year from now, two years from now, or is it too early to project?
Mr. Sabins: Assuming the data are good, we are regulated as an investigational new drug (IND) and we will apply for a biologic license application (BLA) with the FDA. Assuming the data are good around the April 1st time period, we will submit a BLA application to the FDA around July of 2013. We have built approximately a year into the schedule to get BLA approval from the FDA, and ultimately move forward with commercialization.
CEOCFO: Is your funding in place to go through the next phases, or will Spinal Restoration need to look at funding?
Mr. Sabins: Yes, we just closed on a Series C, which will get us through the things I just spoke about; when we move to full commercialization, we will raise a Series D, and/or we will continue our discussions with potential strategic acquirers as appropriate.
CEOCFO: What do you see, if any, are the challenges that might be unique to Spinal Restoration?
Mr. Sabins: You have to get through the FDA; however, we have a very good relationship with the FDA. We have a special protocol assessment (SPA) with the FDA associated with our study, which means we have already discussed with them our protocol as well as our statistical analysis package. This means there may not be a whole lot of discussion around that after we get the data. If the data are good, we will move through the FDA hopefully in a consistent fashion, but the FDA is always a little bit of a wild card. We are probably in as good as shape as we can be moving forward at this point in time.
CEOCFO: You have a considerable history in the industry; what have you learned in all of the years that you can tell me that is most helpful in this venture?
Mr. Sabins: We approached this business the same way we have in our other lives of business, in that we wanted to build a company in which we could do the things that were appropriate for the long haul. Our investors have been on board with that philosophy. They have funded us to allow us to go and do all of the preclinical work, and the pilot work, as well as the Phase III trial. That is fairly unique in these days and times. Many products go through the 510(k) process of the FDA with the hope of being a lot less costly and faster. However, Level one data will ultimately be what, again, the patient wants to see to know it is safe and efficacious. A physician wants that same thing and the payers are demanding that. We have positioned ourselves to meet the demands of all the stakeholders. Again, that is something we have taken from the team that we have put together who have all gone through this process with larger organizations and have brought it to this smaller organization.
CEOCFO: Why should Spiral Restoration stand out for investors and people in the business and healthcare communities?
We are going to have
Level one data. If successful, this study will provide unequivocal safety,
efficacy, and economic data to meet patient, physician and payer
requirements for adoption and coverage. If the data are good and we receive
BLA approval, we are going to have an IND/BLA approval, and we are going to
have a product where approximately 4 million patients annually suffer from a
condition that they have very limited options today. There are not a lot of
Spinal Restoration type companies out there who have gone through the IND/BLA
process to get approval. This sets us apart from many companies that may
have products coming to market that look fairly similar to products that are
already on the market.
“If successful, this study will provide unequivocal safety, efficacy, and economic data to meet patient, physician and payer requirements for adoption and coverage.”- Gary Sabins
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