Special Report: Regenerative bone company Osteopore has secured the rights to cutting edge technology which could form the basis of the future products of the company.

Osteopore (ASX:OSX) stock bolted on Wednesday after the company revealed that it’s working on the next generation of its regenerative bone-healing products.

The stock shot up to an intraday high of 82.5c on the news. It follows a share price spike earlier this month when the company revealed it had cracked the US market.

Osteopore, which is already generating revenue from its patented 3D printed bioresorbable products, signed a licence option over a novel 3D printed modular bone implant technology being developed at the Queensland University of Technology (QUT).

The technology complements Osteopore’s current bone regenerating products and has shown encouraging early stage results for regrowth of long bone defects in patients who have lost more than 6cm of bone to injury or disease.

Executive director Geoff Pocock says the modular technology allows implants to be stacked or locked together while giving the surgeon the freedom to directly customise the implant as needed.

“The opportunity here is the idea of making modular implants that means the surgeon can put a degree of customisation in place as the modular scaffolds are being used,” he told Stockhead.

“We see this as being part of our ongoing development of the Osteopore technology, with a view to creating second generation for the future.”

Customisable implants are cutting edge as it is, but to be able to easily modify an implant during a surgery has been, until now, science fiction.

The company expects that detail alone to disrupt the supply chain model of customised implants.

“This is an early-stage but low-risk and highly-leveraged project for Osteopore. It’s low risk because it requires little capital investment from us and we’re getting a significant cash and in-kind contribution from the university,” Pocock said.

“It’s all part of Osteopore’s long-term commitment to building better regenerative bone healing capability and drive better patient outcomes globally.”

QUT and Osteopore will initially work together on clinical data that will support a regulatory submission to Australian, US and European regulators, and de-risk the technology before the company considers whether to acquire it.

If successful, Osteopore has the option to secure exclusive commercialisation rights via a further licensing agreement over the technology.

Osteopore will provide $40,000 cash and in-kind support, and QUT is tipping in $100,000 via a grant.

Under any future commercial agreement with QUT, Osteopore would be required to pay a market entry fee of $100,000 and provide royalties on sales with a potential range of 2-6 per cent.

 

The market opportunity 

The target market for the technology is orthopaedic surgery, in reconstruction of long bone defects in the upper and lower extremities.

A 2015 Boston Consulting Group report found that polymer-based biomaterials were on the up-curve of a global expansion, while a more recent report in 2019 suggested the compound annual growth rate for reconstructive implants in the orthopaedic and spine sectors is at 5.1 per cent.

The global market potential is approximately $US30bn ($42bn) by 2022.

Osteopore says an estimated 2.2 million bone grafting procedures are carried out every year around the world, with about 10 per cent of these for the grafting of long bones — a market Osteopore has already shown its existing products work well in. 

With the ability to regrow normal bone, the modular implant technology has a potential advantage over traditional grafting, where bone needs to be harvested from another site in the body. This could provide a commercial and clinical advantage, which would translate into a potential share of the bone grafting market.

 

Two-stage approach 

The agreement with QUT is divided into two stages.

Stage one consists of data gathering to support regulatory submissions, including conducting non-human pre-clinical trials in advance of future human trials, along with developing patent strategy and applications in relation to the technology.

Stage two comes if the data proves favourable enough for Osteopore to take up its worldwide option to buy the technology, and will see the duo look for regulatory approval.

Osteopore has a proven record of successfully commercialising research technology, as it’s already received approvals for Osteoplug, a skull bone regeneration product, and Osteomesh. 

Osteopore plans to develop a go-to-market strategy that takes advantage of the company’s well-established sales network and relationships with clinical partners who can assist in driving product uptake.

This article was developed in collaboration with Osteopore, a Stockhead advertiser at the time of publishing.

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.