After first deciding not to issue any recalls in April, the FDA last month asked Allergan to voluntarily recall nearly a dozen different textured breast implant products linked to a rare cancer. The FDA move follows EU withdrawal of marketing authorization for the textured implants last December, and similar bans in Canada in May and by the TGA in Australia earlier last month.
Allergan saw a 30% decline in breast implant sales in the quarter following the EU action last December. Its breast implant sales for the first 6 months of this year were $108 million, compared with $220 million for the same period last year. But, to date, overall consumer demand for breast implants remains strong. Breast augmentation remains the No. 1 plastic surgery procedure performed in the US. Last year, approximately 415,000 breast augmentation and reconstruction procedures were carried out there.
While Allergan has lost out, analysts have already identified Establishment Labs as a potential winner from the changed regulatory environment for breast implant products. In its Q2 Earnings Call held earlier this month, Establishment Lab’s CEO said the company continued to be unaffected by the recent safety related bans from international regulatory bodies.
Establishment Labs reported close to 60% year-over-year growth for the quarter and currently expects yearly sales to reach up to $86 million.
Jefferies analysts wrote that the turmoil in the global breast implant market had certainly helped Establishment Labs, observing that the company had already capturing significant share based on the differentiated nature and better outcomes with its Motiva implants, which are sold in 75 countries. It further noted that Establishment Labs was the only approved manufacturer of breast implants in Australia not to have products suspended or cancelled.
PolyNovo is developing a range of breast augmentation and reconstructive products in partnership with Establishment Labs. It is currently developing three breast reconstruction and augmentation devices – a breast sling, a breast pocket and a biodegradable breast prosthesis. Over the past year, various laboratory tests, product design inputs and early manufacturing scale up have been completed. Special manufacturing equipment for the devices has been commissioned from German suppliers to be used in PolyNovo’s new cleanroom production facility. It is expected that the facility will be completed at the end of this year and GMP certification obtained by May next year. The new breast devices will utilise NovoSorb foam and film with PolyNovo extruding is own NovoSorb film, which it says will be completely different to BTM film.
In the development and licensing agreement which was announced with Establishment Labs in April last year, PolyNovo agreed to undertake all development and manufacturing processes for the breast products, which will be sold under the Motiva brands globally by Establishment Labs. Establishment Labs will be responsible for clinical trials, regulatory processes, sales and marketing activities related to the products.
PMA regulatory approval is required for these products, which means that market release is still a number of years away. Nonetheless, as a pipeline asset, the Novosorb breast devices are looking increasingly attractive.
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