Clinica - 1.10.2008 - Flush with new cash from its latest financing round, biomaterials specialist Orteq is now embarking on an aggressive growth strategy in the sports medicine market.

The privately-help company announced today that it has closed an £8m ($14,4m) series B financing round, after topping up the £4.5m it raised last year with an additional £ 3.5m. These funds, which include contributions from French venture capitalist Matignon Investissement et Gestion and UK investor group Oakes Lyman, through its OLK fund, will go towards initiating US clinical trials and the European launch of Actifit, Orteq’s recently CE-market lead product.

Actifit is a polymer implant designed for the repair of the meniscus, a fibrocartilage cushion that plays an important role in stabilising and cushioning the knee. Currently, most patients who damage or tear their meniscus have little option but to have the damaged tissue surgically removed a procedure known as a partial meniscectomy. The loss of tissue, however, leads to permanently reduced function of the knee and, over time, to the degeneration of the surrounding articular cartilage and the development of osteoarthritis.

Orteq’s Actifit acts as a scaffold to allow the regrowth and regeneration of the meniscus. When implanted in the area where the damaged meniscus has been removed, Actifit’s highly porous structure – it is 80 % air – allows blood vessels to grow into the material and for new tissue to be generated around them. Over 4-6 years, the implant degrades and is removed by the body.

With over 1.5 million meniscal injuries in the US and western Europe being treated each year, Orteq estimates that the global market for Actifit is over $2bn. And the London, UK-based firm has shown itself eager to start tapping into this substantial opportunity as soon as possible. Orteq CEO Dianne Blanco and finance director Andrew King told Clinica in an exclusive interview that the appointment of sales reps and distributors for Actifit is currently in full swing. “We will primarily be looking to work with independent partners that are skilled in selling orthopaedic products to surgeons specialising in sports medicine – that’s critical”, said Ms Blanco.

The company is close to hiring two sales representatives in Germany, the one market where Orteq will have its own sales team, and has signed a distribution agreement for Belgium and the Netherlands. It is also about to seal further deals for Spain, Portugal, Italy and France. "We're hoping to "tick off" most of Europe fairly quickly", said Mr King.

While the company is laying down its sales infrastructure, the orders are already coming in. This week, Orteq announced that three clinical centres – two in Belgium and one in Switzerland – have purchased Actifit and implanted the product in patients whose meniscectomies had failed. In the meantime, the product is also being evaluated by several other centres in the firm’s key European markets – evaluations which the company hopes will transform into sales.

Ms Blanco believes that the rapid uptake and keen interest in the implant reflects the need for a product like Actifit. In terms of the technology, two years of preclinical and clinical testing of the material has shown it to be safe and highly biocompatible. Patients’knees that have been implanted with Actifit demonstrated at 12 months, “the expected tissue in-growth, and patients are reporting significant pain reduction”, according to Prof René Verdonk, lead investigator of the Actifit clinical trial at the University of Gent of Belgium.

Actifit has proven biocompatibility and clinical efficacy, said Ms Blanco, but added : “What excites the surgeon even more is its ease of use”. Actifit is implanted arthroscopically after the meniscectomy, so the surgeon doesn’t need to open the knee up. The material can be easily cut to fit the damaged area, and it takes 4-5 sutures to attach the implant to the tissue. And as meniscectomies and suturing tissue are part and parcel of an experienced sports medicine surgeon’s repertoire, the implantation procedure for Actifit “plays very nicely with what they already know”, she continued.

In terms of competition, there is one product that is currently on the market in Europe, ReGen Biologics’Menaflex. However, the collagen-based implant is “tougher to use” than Actifit, according to Ms Blanco, and surgeons who have used Orteq’s product have found it easier to cut and handle than its competitor.

As commercialisation of Actifit gets underway, the company’s R&D department – based in Groningen, the Netherlands, together with the manufacturing facility – is already working on “tuning” the underlying technology for use in other sports medicine applications. “We’re looking at a variety of joints, including shoulder repair”, said Ms Blanco.

However, the CEO is keen to stress that the company’s key strategy is to remain “ruthlessly focused” and keep its sights on the meniscus repair market – for the time being at least. “We have a $2bn market to tackle – it would be crazy to try to diversify into different areas all at once,” she told Clinica. “However, I see the orthopaedic surgeon as missing so many tools in his tool box for repairing the patient. Our polymer material will be a platform for a range of products that could help meet the surgeon’s different needs”.