Developing Cartilage Transplants

It is not easy to develop medicines; research and development take years and require a great deal of money, not to mention the inquisitorial process of the FDA and the expenses involved in trials. Even assuming that all these fearsome obstacles are overcome, the product must be marketed.

CTI was created to meet these problems. CTI's parent company, Prochon, which develops medicines for cartilage and for bone, decided that, with all due respect for science, it was time to concentrate on making some money. Prochon, whose expertise is medicine for dwarfishness, established a spin-off.

Business Card

Name: CTI

Founded: 1997

Product: Treatment for healing damaged knee cartilage

Employees: 6

Market: Health services providers (hospitals and medical insurers)

Customers: Asaf Harofe, Ichilov, Barzilai, and Rambam hospitals

Competition: Genzyme of the US, Codon of Germany

Ownership: Prochon - over 80%. The rest is in the hands of entrepreneurs.

The spin-off, CTI, is developing a product for a much larger market, and has also designed a model for making profit by providing services together with the product. CTI is developing a process for creating cartilage grafts, called BioCart, for treating trauma-caused damage to cartilage in the knee. This tissue is extremely difficult to heal, because it undergoes a lot of strain; body weight and continual movement cause the tissue to undergo constant friction, which wears down the cartilage and prevents its healing.

In addition, mature cartilage cells are like nerve cells in that they do not divide. This means that they do not self repair and do not propagate. In other words, damaged, worn out or missing cartilage will not heal. The target market, in contrast to Prochon's anti-dwarfishness medicine, is not insignificant: athletes, accident victims, and soldiers are all liable to suffer from traumatic cartilage damage.

What does CTI do? CTI creates artificially grown cartilage tissue, which is transplanted into the patient's body on or near the affected area. How is this done? While mature cartilage cells do not propagate, non-mature cartilage cells do propagate, enabling the body to grow until age 16. Until this age, cartilage cells multiply, providing the basis for bones (bones are essentially a collection of hardened cartilage cells).

CTI takes mature cartilage cells a step backward; i.e. it makes them "younger". In professional terms, this is called changing the cell's genetic classification level. According to CTI and Prochon general manager Dr. David Elazar, the process does not constitute genetic engineering. He states "We don't change the genetic structure of the cell; we only cause other genes in the cell to become prominent by changing the external conditions. This process is called 'cell engineering'". CTI's field of operation, itself relatively new, is called "tissue growth".

The process requires taking a small biopsy (a few square millimeters) of the patient's cartilage, which can be done without hospitalization. The sample is sent to a laboratory. There it is placed in a sterile environment and exposed to certain external conditions, which cause its cells to reproduce. When the number of cells reaches 10 million, a date is set for surgery. During the operation, the surgeon injects the cells, wrapped in a membranous covering to keep them in place, into the incision.

CTI's laboratory process is located in Rehovot's Science Park. The product is already being sold to Asaf Harofe, Ichilov, Barzilai, and Rambam hospitals. CTI intends to become a regional service center, providing this treatment for hospitals and clinics. According to Aviezer, CTI is in contact with medical institutions "in the Mediterranean region" and in Europe, which will shortly be sending samples to it.

Globes: Wouldn't it be more efficient to license the technology to local centers around the world?

Aviezer: "We aren't doing that at the moment. We are concentrating on providing services here. It is being planned, however."

Why not operate as a technology company with an emphasis on the product, rather than on service?

"We want to first secure our base. At the same time, we are searching for a strategic partner and are in contact with a leading US company in the field of orthopedics and transplants, which is familiar with the market and is capable of setting up such centers."

Why did you decide to create a spin-off?

"To facilitate capital raising. A start-up company, which can reach the market faster, has a different outlook on time spans, costs, order of size.. CTI still benefits from all the development and know-how of the parent company. The separation is more on a conceptual level."

Prochon, the parent company, was founded in 1996 by Prof. AvnerYayion of the Weitzmann Institute. He is the chief scientist of the company. Aviezer, who holds doctorate in molecular biology, also has an MBA from Bar Ilan University and has worked for the American pharmaceutical company Cyanamid. Prochon is financed by private investors from the UK, whose investment to date totals only a few million dollars. Only a few hundred thousand dollars have been invested in CTI.

Can a company be maintained with a few hundred thousand dollars?

"Yes, thanks to Prochon's scientific infrastructure."

What about FDA approval?

"We will obtain it after we get a US partner. It's an expensive process."

What about EEC approval?

"There we are acting by ourselves."

Is yours a generic technology that can be used to develop additional applications?

"We are working on applications in the field of cosmetics: for example, as a replacement for nose cartilage. Our intention is to establish a framework to fit the needs of the patient in advance, so that the cartilage will be ready for transplanting. Currently, cartilage is taken from another part of the body and fitted to requirements during the operation. We want to develop a kind of natural prosthesis, which will be taken from the earlobe. It can also be used instead of silicon for breast implants."

Is the tissue similar to the original?

"Cartilage has various tissues, which can be adapted."

You mean you can take an earlobe biopsy, which will become breast-like tissue?

"In short, yes."

Have you tested the possibility of growing prostheses of human limbs?

"Do you remember the experiment in which a scientist grew an ear on a mouse? That was a feasibility test. He used a live animal as a construction site, and that's what we will do in the laboratory."

Published by Israel's Business Arena on 11 October, 1999

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