I have always looked upon the approval of Striate Plus...

I have always looked upon the approval of Striate Plus (previously CelGro Dental ) as a small appetiser to the main event. Firstly, the Company has spent relatively peanuts on its development and subsequent 510 (k) (substantial equivalence) approval . The sales opportunity and margin profile in dental is dwarfed by Remplir for nerve regeneration or the ATI therapies such as for rotator cuff or tennis elbow, where the market opportunity runs into billions . Having already launched Striate in Europe and a few other markets, it was obvious that there is a lot of inertia in the dental distribution channel…and using KOL’s to drive awareness would be a hard slog. This is evidenced, i believe , by the fact that one Swiss company currently white labels an identical product to several different US distributors… so this deal might be an opportunity for an existing player with market share to differentiate their product offering and enhance margins? A global licence would allow better payback on marketing spend for the licensee and no doubt an opportunity to enhance margins relative to just being an effective reseller. Striate was lauded by the FDA at the time of its approval for its handling capabilities when KOL’s were asked to give an opinion . I would be amazed if Orthocell had given a global license to someone who did not already have a footprint in all the key markets…but we will have to wait and see. As others have mentioned , it is important that some form of minimum performance obligations are included in the agreement or make sure there is a substantial upfront to compensate.

Either way, the collagen wrapper used for Striate is a slightly thinner scaffold to the two other market versions . This “global” licensee should have thoroughly checked the IP and validated the products effectiveness. Hopefully the licensee is a well known company with a good reputation. Having our collagen technology already in use worldwide will be a great for marketing other treatments as well as attracting other potential partners. It should also help reduce any safety concerns with some real world data . Decent volumes might also enable Orthocell to scale GMP manufacturing facilities in advance of other application approvals. Remplir is likely to proceed along the De Novo pathway because it can differentiate itself to a higher level and target substantial margins in specialist segments like nerve repair in tetraplegics. This will take a little additional time to gain approval but the rewards are enormous, compared to lower margins in mainstream peripheral nerve injury (primarily less than 20mm). Assuming they navigate through the approval pathway and agree reimbursement rates , both Remplir and ATI (and CelGro rope) could be blockbusters.

One last point…it is easy to see that many have jumped ship from this share as the whole biotech market tanked. I suspect many of the “concerns” posters may have expressed , might also turn out to be an excuse to hinder a rerating whilst they try to climb back aboard. Stranger things have happened . Paul Anderson is not a novice in this field of therapy having already achieved a positive exit at Verigen. If he has managed to secure a decent “up front” from this new global license partner …the market might conclude the need for additional cash to fund Orthocell’s clinical trials has been averted. ?



Please do not rely on the facts or opinions expressed in the above post when making an investment decision,