Organogenesis says its Apligraf product is the only marketed cell-based product approved for both venous leg ulcers and diabetic foot ulcers. Apligraf consists of a bovine collagen matrix, living keratinocytes, and fibroblast cells. The collagen is combined with fibroblasts to first form a dermal matrix, onto which keratinocytes are seeded to form an epidermal layer, comprising the two primary layers of skin. Together, the two cell types in Apligraf reportedly produce over 40 cytokines and growth factors required for the development, regeneration, and healing of skin.
Founded in 1985 as a spin-off to develop ideas born at M.I.T., Organogenesis sold the marketing rights to Apligraf, its only product at the time, to Novartis in 1996. In 2002, in order to focus on its manufacturing operation, Organogenesis re-acquired the marketing rights but was soon forced to file for Chapter 11 bankruptcy protection. Since then, the company has made a serious comeback and many of the laid-off workers are now back with the company through funding from private investors.
According to Organogenesis’ CEO Geoff McKay, “Apligraf is now growing over 30% in the U.S. Our first-generation technology is in pretty good shape and has allowed us to have the financial strength to think long term.”
One reason for Organogenesis’ early problems, McKay said, was that the original culture of the company was “really cutting-edge science. Commercialization, marketing, and sales were an afterthought, to the extent that these functions were just licensed out. Organogenesis defined itself as an R&D-based company. The trouble with that is that the model often doesn’t work. It is very well documented that the majority of out-licensing partnerships don’t translate into success for the smaller partner.
“The original company did some groundbreaking things—the research and development of Apligraf and some follow-on products that never made it. I think if you go back to the 1990s, Organogenesis was the first company to get an allograft approved. At that point the company had a market cap of over a billion dollars in 1998 with no revenue. What the financial community was valuing was the new field of medicine.”
Translating that breakthrough science into a business model that could be measured by revenue, he said, remained an ongoing problem. “As great as the science was, with FDA approval a whole new set of challenges arose. How could you make a laboratory product scaleable? How could you do it efficiently, reliably, and cost-effectively? Organogenesis stumbled for many years trying to scale up a living technology with no roadmap to follow.”
In hindsight, he commented, the company was “great at research but undeveloped on the operational side. It couldn’t get costs or reliability under control; the more it sold, the more it lost.” So, the company began to focus on business fundamentals, honing its infrastructure and operational skill set, and maximizing its “biggest single competitive advantage, our ability to mass produce cell therapies.”
One key factor, for example, was the ability to expand Apligraf’s shelf life from 5 to 15 days. “For us, our release criteria are cell viability and histology—over 90% viability and all proper dermal structure has to be perfect at the end of the shelf life. We were able to develop packaging that could keep the cells at an optimal temperature and add 10 days to the shelf life,” McKay said. “Just focusing on business fundamentals with infrastructure and an operation skill set, the biggest single competitive advantage is our ability to mass produce cell therapies.”
The company continues to develop innovative products, some of which will be based on its 2008 acquisition of NanoMatrix. NanoMatrix’ electrospinning platform produces and assembles nano-scale fibers into 3-D scaffolds that mimic the structure and biochemical environment of the human body’s tissues.
“We have the cells and the matrix, and most of our focus has been on cells. We concluded that as a second-generation technology we could enhance our first generation by optimizing the matrix. We bought the rights to electrospinning technology to provide more optimized scaffolding for the cells.”
The company is also working on its VCT01™ bi-layered, bio-engineered skin, with the dermal matrix generated de novo from the human dermal fibroblasts instead of bovine collagen. Human keratinocytes seeded on top of the dermis form the epidermal layer for an all-human cell-therapy product.