Advanced Tissue Sciences, founded by Gail Naughton, Ph.D., in 1987, developed its Dermagraft TransCyte (Dermagraft-TC) product to create an artificial skin for burn patients. The startup raised hundreds of millions of dollars and spent 15 years developing its human tissue products before filing for Chapter 7 bankruptcy liquidation in late 2002. ATS partnered with Smith & Nephew in a joint venture to manufacture its product line. Smith & Nephew tried without success to commercialize the technology itself—and ultimately sold the same rights and facilities in 2006 to Advanced BioHealing.
Dermagraft was approved by the FDA in March 1997 as a temporary wound covering for partial-thickness burns. It was reportedly the first human fibroblast-derived temporary skin substitute approved by the FDA. However, in 1998, the FDA issued a nonapprovable letter for Dermagraft asking for more clinical data supporting the efficacy of the product in its first indication, the management of diabetic foot ulcers.
A 1999 FDA audit of ATS led to a warning letter and a Class II recall after the agency raised concerns that the firm’s temporary skin substitute might have been related to a patient’s death.
The recall and warning letter, which raised questions about environmental monitoring and sterility, sent ATS’ stock into a downward spiral. On March 31, 2003, ATS was liquidated, effectively destroying $300 million of stakeholder financing. Although the company was successful in the development of remarkable breakthrough technologies in the regenerative medicine arena and the building of a substantial portfolio of patents, it never made a profit.
Ultimately the same rights and facilities were sold in 2006 to Advanced BioHealing, which now manufactures and markets Dermagraft. The company had projected revenue of $130 million in 2010.
With a 2010 list price of $1,425, Dermagraft, which requires weekly application, is costly to use. It is indicated for up to eight weekly applications over a 12-week period and consists of fibroblasts derived from human foreskin tissue, extracellular matrix, and a polyglactin mesh bioabsorbable scaffold. The fibroblasts proliferate to fill the interstices of this scaffold and secrete human dermal collagen, matrix proteins, growth factors, and cytokines to create a 3-D human dermal substitute containing metabolically active, living cells.
Dermagraft is in an ongoing pivotal trial in individuals with venous leg ulcers (VLUs) to determine the product’s safety and efficacy in promoting VLU healing. Trial participants have been randomized to receive either weekly applications of Dermagraft and four-layer compression dressings or only weekly applications of four-layer compression dressings (control group). Patients are seen weekly until wound closure is achieved or until the 19-week treatment study is completed. Follow-up visits are to be done monthly for three months.