Wright Medical (NSDQ:WMGI) said yesterday that the FDA approved the Augment bone graft it acquired when it closed a $380 million buyout of BioMimetic Therapeutics in 2013.
Pre-market approval from the FDA means Wright can begin marketing Augment in the U.S. as an alternative to autograft for ankle and hindfoot fusion procedures, the Memphis-based company said.
It’s been a long road for Wright since announcing the BioMimetic deal in November 2012. Just a few months after the deal closed in March 2013, the FDA said Wright would need to run a new clinical trial on high-risk patients to win its favor, citing the low-risk patient population in a clinical trial backing the U.S. approval application. Wright appealed; the federal safety watchdog eventually agreed to let the company submit more data on Augment. Then, last February, the FDA hit the vendor that makes the putty for Wright with a “Form 483” warning, further delaying approval.
Yesterday Wright estimated the market opportunity could be $300 million for Augment, which uses a combination of a bone-growth stimulator called recombinant human platelet-derived growth factor and beta-tricalcium phosphate, which is designed to form a scaffold for the new bone growth. It’s an alternative to allografts, which use bone harvested from the patient. Wright said it expects Augment to put up sales of $10 million to $12 million in the 1st 7 to8 months after it hits the market here, which is expected in the next several weeks.
“The FDA approval of Augment marks a capstone achievement that demonstrates the strength of our science and provides a breakthrough therapeutic option as an alternative to autograft in ankle and hindfoot fusion procedures. We will begin commercial sale and distribution of Augment in the U.S. and believe this product, as well as the PDGF technology platform, will be important drivers of the long-term growth of our business for years to come,” president & CEO Robert Palmisano said in prepared remarks. “This approval also underscores the significant effort and perseverance from our clinical trial investigators and Wright’s clinical, regulatory and legal teams to bring the product to market. This success can be attributed to everyone involved in the clinical trial, especially the study investigators and coordinators; our R&D, regulatory and clinical teams; our partners and suppliers; and most importantly, the patients who participated in the landmark prospective, randomized study comparing Augment bone graft to autograft.”
“The FDA approval of Augment provides a valuable new therapeutic healing option as an alternative to autograft in ankle and/or hindfoot fusion procedures, which is especially important since the outcomes of these interventions can at times be complicated by delayed union or non-union. This approval is based on strong clinical data showing that Augment offers clear patient benefit by enabling a healing rate and safety profile equivalent to autogenous bone graft–while simultaneously avoiding the additional surgery required to harvest autograft bone graft tissue that can result in site-specific complications and/or prolonged harvest site pain in some patients,” added Dr. Christopher DiGiovanni of Boston’s Mass. General Hospital, who was lead U.S. investigator for Augment’s pivotal trial.
Leerink Partners analyst Richard Newitter said Augment could be extended to treat other indications.
“Down the road, Augment may also have utility in key soft tissue/sports medicine areas (i.e., tennis elbow, rotator cuff) that could open up $1B+ in incremental mkt opportunity beyond foot & ankle (F&A)—all upside to out-year forecasts,” Newitter wrote last night in a note to investors.
News of the Augment approval sent WMGI shares up 10.4% in after-hours trading, to $25.30 apiece as of about 8 p.m. Eastern yesterday.