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TIS Approaches Major Inflexion Points (Report Date 07/10/11)

Everything is falling into place for TIS. Results from the company’s wound healing study in around 40 patients are due this month. The company is confident of signing a global licensing deal next month for its wound healing technology, VitroGro. It expects to file VitroGro for approval around the end of the year, with a decision expected 45 days later, then start selling the product into Europe in the second quarter of 2012.

CEO Steven Mercer is very confident about the company’s prospects and said he will be very disappointed if the company’s wound healing product, called VitroGro, does not eventually generate sales well in excess of $100 million a year.

VitroGro is a combination of a number of naturally occurring growth factors that promote skin growth and cell migration. Previous trials have shown the product delivers excellent results in even very difficult to heal wounds. In a trial in 30 patients with venous leg ulcers who’s ulcers had not healed even after nine months of best practice compression therapy, VitroGro delivered complete healing in one in six patients in just 24 days, with an average ulcer
healing of 43% over the 24 day treatment.

Tissue Therapies, through a licensee, expects to start selling the product into Europe into hospitals and wound care clinics where reimbursement approval is not required.
The trial just completed was conducted with a new re-engineered protein which will allow manufacturing costs to be reduced. Previous trials involved a combined number of proteins, but through re-engineering, the same actives have now been incorporated into the one synthetic protein.

That protein is manufactured by Eurogentec in Liege (Belgium) and the syringe filling and finishing is outsourced to Catalent in Brussels, one hour away from the first facility. Mercer is confident the results from the current trial using the newly re-engineered protein will match those, if not improve, the results from earlier
trials.

LICENSING DEAL

Mercer is very confident that a global licensing deal will be completed next month, with discussions down to the final potential partners. A large upfront fee should not be expected by investors, and which is often not the case for device-like products, which is the classification that VitroGro will likely fall into. Tissue Therapies expects to maintain manufacturing. Net royalties to Tissue Therapies we would estimate to be between 20%-25%.

USA – FDA Classification

Approval into the US will become the next priority. In the US the company expects its product will be assessed as a device by the FDA. A decision by the FDA regarding this designation of VitroGro will occur this month.

From there, the company will file an IDE (Investigational Device Exemption) application with the FDA, the documentation which Mercer says is largely complete. The company expects to start recruiting by the end of December, with a CRO already in place and a chief clinician selected for the trial.

The company will also recruit in France, which is required to achieve reimbursement in that country. It is not expected to be a very expensive trial, costing around $2 million.