Heraeus Medical and OrthoCyte Form Product Development Pact

Heraeus Medical GmbH, a maker of bone cement and biomaterials for elective orthopedic and trauma surgery, and BioTime Inc., a clinical-stage regenerative medicine company focused on its pluripotent stem cell technology, report that BioTime’s subsidiary OrthoCyte Corp. and Heraeus have entered an exclusive development and worldwide licensing agreements for the development of bone-grafting therapies based on the use of BioTime’s proprietary PureStem human embryonic progenitor cell technology.

Under the terms of the development agreement, Heraeus Medical would make an initial $1 million upfront payment to OrthoCyte, and additional payments upon OrthoCyte’s attainment of certain product development milestones, and Heraeus will fund all ongoing product development activities through an investigational new drug submission.
Hanau, Germany-based Heraeus Medical will be responsible for worldwide sales if a product is successfully developed, can be demonstrated through clinical trials to be safe and effective, and receives regulatory approval for marketing. OrthoCyte will be responsible for product development and, initially, for manufacturing.

Pursuant to the terms of the license agreement, OrthoCyte has licensed certain technology to Heraeus, and Heraeus has licensed certain technology to OrthoCyte. The license grant by OrthoCyte to Heraeus is exclusive and worldwide in the field of bone grafting for all osteoskeleton diseases and injuries, except oral maxillofacial. The license grant by Heraeus to OrthoCyte is exclusive and worldwide in all other fields. Heraeus and OrthoCyte will pay certain specified royalties to each other based on their respective net sales of the product developed under the development agreement.

Bone grafting products are used in surgical procedures to help large segmental defects or bone voids to heal as a result of trauma, implant revisions, cancer resection and spinal fusion surgery for example. The global market for bone-grafting products is currently estimated to be at more than $2 billion annually, and growing at a compound annual growth rate of 3.8 percent, according to GlobalData.

“It’s a great opportunity to work with a prominent partner such as Heraeus Medical for the development of an innovative solution for bone grafting in unmet orthopedic needs,” said Francois Binette, Ph.D., vice president of research and business development for Alameda, Calif.-based OrthoCyte Corp. “This agreement will allow OrthoCyte to advance its development work on therapeutic applications in bone repair, while retaining the rights to other orthopedic indications targeting low back pain and osteoarthritis, as well as soft tissue diseases and injuries.”

Dr. André Kobelt, president of Heraeus Medical GmbH said: “The announcement of this collaboration with BioTime is an important strategic step in the field of regenerative medicine involving novel orthopedic applications that could significantly improve the current approach in targeting osseous indications (orthopedics). We view this agreement as an exciting opportunity for Heraeus to embark upon as a pure play orthobiologics initiative targeting a number of key musculoskeletal areas as we look to continue to expand our global footprint in the regenerative medicine market.”

OrthoCyte holds a library of proprietary human progenitors of skeletal tissues including bone, articular cartilage, intervertebral disc, tendon, and ligament, all of which are in the preclinical phase of development.

Heraeus’ corporate specialties include precious metals, materials and technologies, sensors, biomaterials and medical products, quartz glass, and specialty light sources. Heraeus Medical’s orthobiological portfolio consists of products and services for long-term fixation of implants in joint replacement, trauma and spine.