Level achieved: Orthocell gains FDA approval for flagship nerve repair product

• Orthocell receives US FDA 510(k) approval for Remplir, its flagship nerve repair product
• Approval enables Orthocell to start commercial distribution into US$1.6 billion nerve repair market
• Orthocell forecasts significant step change in revenue, accelerating path to breakeven and profitability

Perth-based regenerative medicine company Orthocell (ASX:OCC) has unlocked the door to the lucrative US market,  receiving US Food and Drug Administration (FDA) clearance for its flagship nerve repair product Remplir.

News of Remplir’s US FDA 510(k) clearance hit the ASX this morning, paving the way for its commercial distribution in the world’s largest nerve repair market, estimated at US$1.6 billion (~A$2.bn).

Remplir’s FDA approval is a landmark development for Orthocell, but also a boost to the ASX healthcare sector in a week where markets have broadly felt the fallout of US President Donald Trump’s far-reaching “Liberation Day” tariffs.

Remplir is a collagen wrap used in nerve repair surgery, assisting surgeons in improving outcomes for damaged nerve regeneration.

Orthocell submitted its application for clearance to commercially distribute Remplir into the US in December after its US FDA 510(k) regulatory study of Remplir met all endpoints.

“It is a defining moment for our company and puts us in rarefied air among Australian biological medical device companies and regenerative medicine companies to have an FDA approval,” Orthocell CEO and managing director Paul Anderson told Stockhead this morning.

US rollout of Remplir to drive profitability

Anderson said the US rollout of Remplir would be an inflection point in its commercialisation strategy and a key catalyst for driving the company towards profitability.

“This opens up significant revenue opportunities for us moving forward,” noted the biotech boss.

“The US market is a dynamic market and we’ve got great pricing structure and can drive now towards profitability and breakeven within the foreseeable future.”

Orthocell fully owns and controls its manufacturing process and has no debt or royalty obligations. This means it retains 100% of the margins on every product sold.

With ~$32 million in cash reserves, the company is well capitalised to support its US commercialisation for Remplir.

The product will be manufactured at its certified Good Manufacturing Practice (GMP) facility at Murdoch University in Perth using its proprietary SMRT manufacturing technology.

The SMRT tech was first developed in conjunction with Orthocell’s chief scientific officer Professor Minghao Zheng and the University of Western Australia.

The facility has a production capacity of 100,000 collagen medical devices annually and won’t require significant capital expenditure to support the initial US rollout.

“Professor Zheng has played a pivotal role in the innovation, development and now into commercialisation phase of the technology,” Anderson said.

Room for more players

Anderson said the US nerve reconstruction market was still wide open, with existing competitor devices penetrating just 10% of around the 700,000 nerve-repair procedures undertaken in the country annually.

That means Remplir won’t have to go head-to-head with a dominant player, but simply carve out its share of the rapidly growing market.

“We know that the US market is primed for a product like ours and know that surgeons in Australia have really embraced the products, he said.

Veritas Securities research analyst Max Moore said the US-FDA clearance was a great achievement for the company.

“It’s really a pivotal moment for the stock and when we initiated coverage in April 2023 we saw potential US FDA approval as  central to the upside case for Orthocell,” Moore told Stockhead.

“It’s really good to see that now come to fruition and we do think there is a sizeable gap in the valuation of Orthocell and some of its larger competitors.”

Moore said the under-penetration of the US market presented Orthocell with significant growth prospects.

“The research indicates the traditional suture method leads to sub-optimal outcomes so we think there’s now a really good opportunity for Orthocell to become the pre-eminent device in the market,” he said.

Ready-set-GO to start US sales

The company is well prepared to start selling in the US with sales and logistics pathways already established including appointments of key US-based executives.

An internal team led by vice presidents of sales, marketing and medical affairs, supported by territory managers will oversee a US network of external distributors.

The US team has been actively working to strengthen the panel of key opinion leaders including establishing highly regarded hospital reference sites and building a regional distributor network.  The company is targeting 12 engaged distributors within six to 12 months.

Lightweight, with a three-year shelf life, and ability to be efficiently transported via air freight, Orthocell will have an on-the-ground US logistics partner with a central warehouse for order fulfilment and customer service.

“Our preliminary work we have been doing in the US over the past 18 months has been able to attract some of the very best surgeons in the business, both plastic and orthopaedic,” Anderson said.

“We’ve also attracted some of the best staff and distributors and in the US.”

Global expansion plans

Remplir is one of two main products Orthocell has developed. Orthocell’s other product, Striate+, is a trademarked collagen membrane designed to support dental guided bone and tissue regeneration procedures.

Remplir is currently approved for sale in Australia, New Zealand, and Singapore, with pending approvals in Canada and Thailand within the next six months and distributed by Device Technologies, a large distributor of high-quality medical devices.

Regulatory applications for the EU and UK are on track for submission within the next 6-12 months.

Striate+ is currently approved in the US, Canada, Europe, UK, Singapore, Australia and New Zealand and distributed by BioHorizons Implant Systems Inc, one of the largest global dental implant companies.

At Stockhead, we tell it like it is. While Orthocell is a Stockhead advertiser, the company did not sponsor this article.