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Commercialization of Epineural Conduits For COMMERCIALIZATION OF EPINEURAL CONDUITS FOR ENHANCEMENT OF NERVE REGENERATION IN SEGMENTAL NERVE DEFECTS by BRYCE GOODMAN Submitted in partial fulfillment of the requirements For the degree of Master of Science Department of Biology CASE WESTERN RESERVE UNIVERSITY August, 2012 CASE WESTERN RESERVE UNIVERSITY SCHOOL OF GRADUATE STUDIES We hereby approve the thesis/dissertation of Bryce Goodman candidate for the Master of Science degree *. (signed) Christopher A Cullis PhD (chair of the committee) Hillel Chiel PhD Jean Burns PhD Elizabeth Sump BS _____________________________________________ _____________________________________________ (date) June 18th, 2012 *We also certify that written approval has been obtained for any proprietary material contained therein. Table of Contents List of Tables……………………………………………………………………….iv List of Figures…………………………………………………………………….. v Abbreviations........................................................................................................... 1 Abstract…………………………………………………………………………… 3 1 Technology Background…………………………………………………. 4 1.1 The Golden Standard and Nerve Autografts…………………………. 11 1.2 Sural (Sensory Nerve) Autograft High Failure Rate............................. 13 1.3 Regenerating Motor Versus Sensory Over a Nerve Gap...................... 17 1.4 Obstacles of Epineural Conduit and Patch............................................ 19 1.5 Wallerian Degeneration Review…………………………………….. 20 1.6 Internship at CTEC…………………………………………………... 22 2 Business Plans (Exit Strategies)…………………………………………. 24 2.1 Plan A: Licensing of Both Products………………………………… 24 2.1.1 Cook Biotech, Inc. and AxoGen, Inc…………………………… 29 2.1.2 License Agreement #1………………………………………….. 30 2.1.3 License Agreement #2………………………………………….. 31 2.1.4 IP Life…………………………………………………………... 31 2.1.5 Customer Segments……………………………………………. 32 2.1.6 Funding Thus Far……………………………………………….. 32 2.1.7 Future Funding……………………………………………….... 33 2.2 Plan B Keys…………………………………………….........................33 2.3 Plan B: Spin-off Company with Protection/Regeneration Platform….. 34 2.3.1 Synovis Acquisition …………………..........................................35 2.3.2 IP Life……………………………................................................35 2.3.3 Customer Segments…………………………………………….. 37 2.3.4 Future Funding…………………………………………………. 37 i 2.3.4.1 Venture Capital: Not Beneficial ……………………...... 40 2.3.5 Partnership Possibility of Osiris……………………………........41 3 Detailed Business Model Canvas: Plan A……………………………… 41 3.1 Key Activities ……………………………………………………....... 42 3.2 Product Use………………………………………………………........43 3.3 Key Resources……………………………………………....................43 3.3.1 CCF…………………………………………………………….. 44 3.3.2 Key Personnel………………………….......................................44 3.4 Key Partners…………………………………………………………...46 3.5 Revenue Stream…………………………………………………….....47 3.5.1 Royalty: Percentage of Sales…………………………………....47 3.5.2 Insurance Coverage…………………………………………......47 3.6 Channels……………………………………………………………… 49 3.6.1 Physicians…………………………………………………….....50 3.6.1.1 Private Practice………………………………………….50 3.6.1.2 Teaching Hospitals……………………...........................50 3.6.2 Five Phases………………………………………........................51 4 Value Proposition (NABC)………………………………………….........51 4.1 Need Here and Overseas………………………………………….........52 4.1.1 Military Market………………………………………………......52 4.1.1.1 Military Protocol on Base Hospitals………………..........55 4.1.1.2 AxoGen, Inc. Deal with Military………………………...56 4.1.2 Civilian Market…………………………......................................56 4.2 Approach Through Applications of the Conduit………….....................59 4.2.1 Product Performance (Clinicals)…………………….....................59 4.2.2 Regenerative and Protective…………………...............................61 4.2.3 Strategic Price Point…………………….......................................61 4.3 Competition Table…………………………………………....................62 4.3.1 Commercialized Products……………………...............................62 4.3.2 Other Products in Development………………..............................72 ii 4.3.2.1 Mayo Clinic Synthetic Conduit…………………..............72 4.4 Benefits to Cost……………………………............................................73 5 SWOT Matrix/Strategy……………………………….................................74 6 Preferred Product List…………………………………..............................75 6.1 Regenerating Peripheral Nerve (Motor/Sensory/Mixed)…......................75 6.1.1 Correct Pore Size……………………….........................................75 6.1.2 Ideally Biodegradable or Reconstructive……………....................76 6.1.3 Biocompatible and No Inflammatory Response……….................76 6.1.4 Diameter and Length Customization for Mixed Nerve…..............76 6.1.4.1 Protective Wrap………………………………..................77 6.1.4.2 Coaptation Option…………………………......................78 6.1.5 Technical Issues Related to Handling…………............................78 7 Summary………………………………………………...............................78 8 Bibliography……………….....................................................…….............80 iii List of Tables Table 1. A nerve transfer table is used when considering allografts/autografts….......13 Table 2. Possible VC fund given with related percent stake to make a 2X return in five year period…………………………………………………………………….....40 Table 3. Business model canvas in chart form……………………………………......42 Table 4. CPT Codes………………………………………………………………......47 Table 5. ICD- 9 procedure code and associated DRG description………………....... 49 Table 6. Etiological factors of PNI from 2009 data………………………………......58 Table 7. Market breakdown including peripheral nerve injury percentage, the reflection on market numbers and type of injury…...............................................58 Table 8. Direct competition is mapped out in respect to AxoGen, Inc. presenting the largest threat with Stryker and Integra following respectively…..........................62 Table 9. Direct competition landscape when considering ideal properties of a peripheral nerve repair product……………………...........……..........................75 iv List of Figures Figure 1. The normal structure of a peripheral nerve……………………………...7 Figure 2. Image depicts various options for nerve repair………………………….11 Figure 3. Histomorphometric comparisons of nerve regeneration across tibial mixed nerve using sensory, motor, and mixed isografts.............................................15 Figure 4. Motor and sensory neuron numbers found in three experimental groups as a percentage of normal (control) nerve.............................................................. 18 Figure 5. Flow chart starts in 2012 and ends in 2022, placing an exit ten years down the road……………………………………………..…………………….......39 Figure 6. Chart of U.S. surgeons that perform PNR……………………………....50 Figure 7. Earlier Lewis rat study exhibiting 2 cm gap (sciatic nerve) to show autograft comparison……………………………………………….................60 Figure 8. NeuroMatrix Type I Collagen conduit………………………………......63 Figure 9. NeuraGen is a Type I Collagen conduit………………………………....65 Figure 10. NeuroTube is a polyglycolic acid (PGA) nerve conduit…………….....66 Figure 11. Neurolac is composed of PCL (Poly(DL-Lactide-Ɛ-Caprolactone))…...68 Figure 12. AxoGuard Protector (left) and AxoGuard Connector (right)…………...70 Figure 13. View of Avance allograft surgical repair of the ulnar and radial digital nerves…………………………………………………………………….........70 v List of Abbreviations A EPO (European Filing) AFIRM (Armed Forces Institute of Regenerative Medicine) F AIN (Anterior Interosseous Nerve) FCR (Flexor Carpi Radialis) FCU (Flexor Carpi Ulnaris) B FDS (Flexor Digitorum Superficialis) BLA (Biologic License Application) FDA (Food and Drug Administration) BM (Bone Marrow) BME (Biomedical Engineering G Department) GFAP (Glial Fibrillary Acidic Protein) GFLs (Glial Neurotrophic Factor BMSC (Bone Marrow Stromal Cells) Family Ligands) BP (Brachial Plexus) GSW (Gunshot Wound) C H CBER (Center for Biologics Evaluation h (Hours) and Research) HCT/P (Human Cellular and Tissue- CC (Cleveland Clinic) based Product) CCF (Cleveland Clinic Foundation) CCI (Cleveland Clinic Innovations) I CE (European Conformity) ICD (International Classification of CFR (Code of Federal Regulations) Diseases) cm (Centimeter) IL-1 (Protein) CNS (Central Nervous System) IP (Intellectual Property) CPT (Current Procedural Terminology) K CTEC (Clinical Tissue Engineering kg (Kilograms) Center) CWRU(Case Western Reserve L University) L5 (Lumbar Spinal Nerve 5) D M DOD (Department of Defense) MD (Doctor of Medicine) DRG (Dorsal Root Ganglion) mg (Milligram) DRG (Diagnosis Related Group) min (Minute) µm (Micrometer) E mm (Millimeter) ECM (Extra Cellular Matrix) MSC (Mesenchymal Stem Cells) ECRB (Extensor Carpi Radialis Brevis) MTF (Musculoskeletal Transplant EMG (Electromyography) Foundation) MVA (Motor Vehicle Accident) ENC (Epineural Nerve Conduit) EP (Evoked Potentials) 1 N R&D (Research and Development) NABC (Value Proposition) NFs (Neurotrophic Factors) S NGF (Nerve Growth Factor) s (Second) NIH (National Institutes of Health) S-100 (low molecular weight Protein) SBIR (Small Business Innovation P Research) SC (Schwann Cells) p (P-Value) SIS (Porcine Small Intestinal PCL (Poly(DL-Lactide-E- Submucosa) Caprolactone)) SSEP (Somatosensory Evoked PCLF (Poly(Caprolactone Fumarate)) Potentials) PCR ((Real-Time) Polymerase Chain STTR (Small Business Technology Reaction) Transfer) PGA (Polyglycolic Acid) SWOT (Strengths, Weaknesses, Opportunities, Threats) PhD (Doctorate) PI (Principle Investigator) T PIN (Posterior Interosseous Nerve) TS (Toe-spread
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