Focus on Orthobiologics, featuring Locate Bio and bone grafting: Tackling runaway proteins and aligning with millions of years of evolution

In conversation with John von Benecke, chief executive, Locate Bio

Locate Bio is a University of Nottingham spin-out and has been operating since 2014, focussed on developing cutting-edge products to treat muscular-skeletal conditions, such as chronic lower back pain and orthopaedic biofilm infections.

Orthobio-what?

The global orthobiologics market is valued at around $5.5bn and broadly encompasses two sorts of products: bone grafts and viscosupplementation. In the latter category, liquids such as hyaluronic acid are injected into sore joints to act as a lubricant.

The former category accounts for the lion’s share of the market and is a key area of focus for Locate Bio. Bone is one of the most transplanted tissue types in the world, second only to blood transfusions, with roughly 3.5m bone graft procedures carried out globally a year. This fast-growing market is estimated to be worth about $3.5bn annually.

What is a bone graft?

A bone graft is needed where there is an unintentional gap in the bone. Grafts promote bone growth, bridging the void and allowing the bone to heal.

“If you think about a small cut you get from, for instance, gardening, it heals and you might get a scar,” explains John von Benecke, chief executive of Locate Bio.

“But, if you have a very deep knife wound, the gap will be too broad for the skin to close over and you end up with a wound too big to heal on its own without the help of stitches. It’s the same with bone – bigger defects need the help of a bone graft to heal.”

The most common reason people need bone grafts is not broken arms or legs – those are like the small cuts – but to solve chronic lower back pain. And that’s not because of injury, but because as we get older the disc shock absorbers in the spine dry up and shrink. As a result, all the nerves that radiate out of the spinal column start to get compressed and spinal fusion surgery is needed to correct it.

“Unfortunately, it is a natural part of ageing, and as we are living longer, this chronic low back pain is becoming more widespread,” von Benecke adds.

In fact, chronic lower back pain is the leading cause of disability worldwide, according to figures from the World Health Organisation (WHO). The pain can be excruciating and prevents people from working and from being active, which can lead to more health problems, especially in older populations.

“Globally we have an ageing population and our view is it will be crucial to keep people active as possible because retained mobility later in life is key to healthy ageing,” says von Benecke.

“The minute you stop people going for a walk with their grandkids, having a social life, playing golf, walking to the shops because of lower back pain, you build up a bunch of health consequences very quickly.”

How does bone grafting work?

There are a variety of different materials and techniques, but a protein called BMP that mammals produce to grow and fuse bone together has dominated the grafting landscape for decades. It is a molecule that was first discovered in the 1960s and brought to the market 20 years ago by a company called Medtronic.

“It took scientists a long time to work out how to produce it at mass scale,” says von Benecke.

BMP is extremely effective in bone grafting and has generated generous returns for Medtronic, whose acquisition of Infuse™ BMP from Wyeth in the 1990s still ranks as the most successful acquisition the spine sector has ever seen. The company has raked in $12bn of revenue over the last 20 years and it came very close to becoming the first ever medical device blockbuster.

Runaway proteins and mischievous osteoclasts

But Infuse BMP does have its drawbacks: the price is high, it is difficult to handle and there can be a lot of side effects because of the way it is delivered to the body.

For instance, the Infuse Bone Graft comes as a powder and must be dissolved in an acid in the operating theatre mid-surgery, taking at least 20 minutes of the theatre staff’s time. When implanted into the body, where the pH level changes, the BMP loses a critical surface charge, which allows the BMP to detach from the collagen.

As BMP is delivered as a liquid, it can ooze away to areas you don’t want it to be in, causing bone to grow where you don’t want it to. This is called ectopic bone growth and is a common side effect in bone grafting surgery, particularly in the spine.

Conversely, BMP can inadvertently dissolve healthy bone.

“There are quite a lot of reports of patients who have had instances where the adjacent bone starts to dissolve,” says von Benecke.

That’s because BMP stimulates two types of cells: one is an osteoblast, which builds bone. The other is an osteoclast, which dissolves old and damaged bone tissue so it can be replaced with new, healthy cells created by osteoblasts.

Amazingly, the human skeleton gets renewed every seven years and this phenomenon is thanks to a delicate interaction between osteoblasts and osteoclasts.

“Because BMP can stimulate both, it can lead to too many osteoclasts causing mischief,” von Benecke says.

So, what does Locate Bio do that’s different?

Its lead product is a next generation BMP called LDGraft, which aims to address the challenges surgeons face using existing BMP products. 

LDGraft is not in liquid form, it is a putty. Actually, it comes as a dry powder, to which saline is added and after 30 seconds it converts to something akin to blu tack.

“We take a widely-used pharmaceutical polymer and do some clever stuff to encase the protein within the polymer,” explains von Benecke.

With no liquid phase of the BMP, surgeons can pick up the product with their hands, they can put it into patients and irrigate the wound without the saline washing the protein away. It also reduces the prep time for surgeons from 20 minutes down to about 2 minutes.

Encapsulation of the BMP solves the challenges associated with runaway liquid and also overcomes the sticky issue of surface charge attachment.

We are humans, not sheep

There is another significant benefit to this clever putty: it is slow release, dispersing the protein into the area over five weeks as the polymer gradually dissolves.

This timing is important. Mammalian bodies naturally release BMP to heal a broken bone, but peak expression varies widely depending on the species.

The rodent fracture model takes three days, a rabbit is a week. Sheep peak BMP expression is at the fortnight mark.

“As you go up the species order, biology has worked out the right time for BMP expression to peak,” von Benecke says.

“Current methods create a massive drug burst that is just too quick. A release profile to five weeks is better matched to align with millions of years of evolution.”

Cost

Conscious that national health authorities and other healthcare providers are under increasing budgetary pressure, Locate Bio is focused on keeping costs down, using state of the art manufacturing to drive down the cost of goods.

“With ageing populations and with a view to protecting healthcare systems, we can’t carry on saying we want higher prices. We think this is a product that should be priced more aggressively and widely to relieve the burden on healthcare systems,” von Benecke says.

LDGraft has won breakthrough device designation from the FDA and is about to start a human clinical study, with the first patient set to be treated this year. The product is still a few years away from being commercially available.

“Unfortunately, recent changes to the R&D tax credits regime in Britain means the trials are unlikely to be in the UK,” von Benecke sighs. “Our ethics application is being filed this week and we are doing one small pilot study followed by one big registration study.”

The orthobiologics opportunity

The market is big, growing and supported by demographical trends, meaning the opportunity is potentially lucrative for a disruptive technology.

At the moment, the sector is dominated by US players, with 60pc of global spend in the United States. These include Medtronic in spine, Stryker, J&J, ZimVie and two big players created earlier this year after two mergers: Globus Medical with NuVasive and the combination of Orthofix and SeaSpine.

“I think US investors absolutely get the orthobiologics opportunity. European investors have probably not paid as much attention to it simply because the European market is so much smaller,” says von Benecke. “I think that creates some very exciting transatlantic opportunities. EU investors can leverage the valuation of EU assets and push them towards the US first, and US investors can pick up great deals from European countries.”

Indeed, positive market forces and rising demand should help to underpin steady growth, while the science and technology in this space has come an awfully long way in the past decade alone, helping to spur innovation. Who knows, the next decade might well yield the sector’s first true blockbuster.

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