OCC reported financials that were flatter than the market expected. Still burning cash but moving in the right direction, 18 months on same growth trajectory and 2 years cash reserves. Also expanding market for Remplir into Singapore

The good

Orthocell reports increasing half-yearly revenue of $3.2 million, up 51% from the half year ended 31 Dec 2022 of $2.1 million

Increasing revenue primarily driven by 68% growth in product sales in the half year to 31 Dec 2023.

Half-yearly revenue has grown on average by 23%, compounded for the last two half years following Striate+™ US and Remplir™ AUS product launches in Q2 FY23.

Orthocell entered into a Royalty Agreement with the University of Western Australia to exchange all royalty entitlements for shares in Orthocell.

The Company issued UWA 1.70 million fully paid ordinary shares at a deemed issue price of $0.35 per share . As a result of the issue, UWA will hold 2.35 million shares (1.18%) in OCC on an undiluted basis

Strengthening the Board. Since the new chair, John Van Der Wielen, joined the board, a focus on improved governance and board renewal has taken place. The Board is now majority independent. With an experienced Board and Management Team, market leading products and a strong balance sheet, Orthocell is well positioned to grow product sales alongside its distribution partners, BioHorizons and Device Technologies.

Nerve repair study to support US regulatory approval has commenced and is on track for completion,with results expected 3Q CY2024 • Study provides information regarding mechanism of action that it is not possible to collect in human clinical trials and will support product marketing initiatives, as well as international regulatory approval and reimbursement strategies.

Pivotal tendon repair study shows OrthoATI™ is as effective as surgery in the treatment of lateral epicondylitis • Randomised clinical trialshowed OrthoATI patients experienced almost complete resolution of pain by 1-month post-treatment compared to 6 months after treatment in the surgery group. • The Company will look to appoint a US based corporate adviser to assist the Company in securing a strategic partner to progress OrthoATI without the need for significant investment in the near term. 6. Strong balance sheet with $19.6m cash at bank at the end of the quarter • Well positioned to continue to gain commercial traction with Striate+™ now approved in US, EU/UK and AUS; Remplir™ approved in AUS and Company well-funded to gain US regulatory approval Remplir.

The not so good

Cash receipts received from customers, inclusive of GST, for quarter ended 31 Dec 2023 were $896k, ($898k in the prior quarter). In line with the Company’s expectations, net cash used in operating activities for the quarter was $2.4m.

BioHorizon’s update Sales to BioHorizons have continued to build momentum with 14% growth in Striate+ revenue (salesrevenue plus license revenue) from $1.5M in the half-year ended Jun 2023 to $1.7M in the half year ended 31 Dec 2023 and a 21% growth in Striate+ revenue from $1.4M in the half year ended 31 Dec 2022 to $1.7M in the half year ended 31 Dec 2023.

Device Technologies update Sales to Device Technologies have continued to build momentum with 58% growth in Remplir revenue from $282K in the half year ended Jun 2023 to $445K in the half year ended Dec 2023 and 154% growth in Remplir revenue from $175K in the half year ended Dec 2022 to $445K in the half year ended Dec 2023

Orthocell’s global expansion strategy for its market leading peripheral nerve repair product Remplir, continues to build with the submission of its regulatory application to the Health Services Authority of Singapore for approval to market and sell the Product. • Remplir is now generating and growing revenue in Australia, pending application for use in the US, and Singapore is expected to be the 3rd country in which Remplir is available for sale. • US approvals process progressing according to plan with the Remplir US 510k regulatory study on track for completion and data read out in Q3 CY24, with US regulatory application on track for submission in Q4 CY24 and approval expected shortly thereafter.

 When does a high profile board appointment add value? I can understand Fiona Wood but Kim Beazley? Does the reputation give the small cap company a foot in the door. 2,000,000 unlisted options exercisable at $0.40 (yesterday’s closing price) and expiring 5 years from date of issue in addition to director fees.

Orthocell has appointed the Hon Kim Beazley AC, former Australian US Ambassador and Governor of Western Australia, Deputy Prime Minister, and Minister for both Defence and Finance, as an Independent Non-Executive Director to the Board.

• Mr Beazley has unrivalled experience engaging strategic partners in the US and will be a key adviser as Orthocell pursues priority clinical, regulatory and commercial activities for its regenerative medicine product portfolio internationally.

• His appointment is preceded by two high-profile additions to the Board in 2023, including Independent Chairman, Mr John Van Der Wielen, and Independent Non-Executive Director, Professor Fiona Wood AM.

Successful OrthoATI™ clinical trial on tennis elbow from OCC. Great result appears to better surgery in cost and recovery time. Plenty of funds available to progress but "The Company will be reviewing its options to progress OrthoATI™ without the need for significant investment in the near term."

• Study demonstrates that the tendon cell therapy (OrthoATI™) is as effective, and potentially better than surgery for severe, chronic treatment-resistant lateral epicondylitis (tennis elbow)

• OrthoATI™ patients experienced almost complete resolution of pain by 1-month post-treatment compared to 6 months after treatment in the surgery group

• Notably, participants in the OrthoATI™ group demonstrated a statistically significant improvement of return of function in half the time than the surgery group

• Participants in the OrthoATI™ group returned to work on average one month (32 days) earlier than the surgery group

• Study indicated that OrthoATI™ may be a better alternative to surgery, as it is minimally invasive and cost effective

• Study results to be presented by lead study investigator and Clinical Professor Eugene Ek at the 83rd Australian Orthopaedic Association Annual Scientific Meeting

• Based on the successful study outcomes, Orthocell will look to appoint a US based corporate adviser to assist the Company in securing a strategic partner to progress OrthoATI™ 

Initial market sizing undertaken by Orthocell suggests that OrthoATI™ could be applicable to >350,000 tennis elbow patients per year in the US alone, which equates to a multi-billion market opportunity1 . Ongoing work by Orthocell aims to assess the savings to the health system that may be delivered by OrthoATI™ when accounting for more effective pain relief and return of function, return to work and avoidance of surgical costs. OrthoATI™ can be used in both pre-surgical and post-surgical applications, not only in treating tennis elbow, but many other tendon injuries and is at the forefront of a significant and increasing market opportunity.

OCC announce trial for nerve repair and appoints specialist US-based nerve surgeons to medical

advisory board. Building a good diverse product base and well cashed up to bring products to market.

Orthocell commences a comparator study to support product marketing initiatives and international regulatory and reimbursement strategies

• This study is an integral part of Orthocell’s comprehensive development program in nerve repair and regeneration

• Study to be undertaken in collaboration with Professor Bill Walsh, at University of New South Wales, with a target study completion Q1 2024

• Follows regulatory approval of Remplir for peripheral nerve repair in Australia in February 2022 and inclusion on the Prosthesis List for reimbursement in November 2022

• Remplir has the potential to become the leading device in the US in an addressable market estimated to be worth more than US$1.1 billion per annum1

• With recent appointments of key US-based surgeons Professor Christopher Dy and Professor David Brogan to the Medical and Scientific Advisory Board, Orthocell is ideally positioned to drive its innovative nerve repair medical device into international markets, including the USA

Professors Christopher Dy and David Brogan are orthopaedic surgeons, specializing in the treatment of nerve injuries, while also leading a comprehensive research program that is directly relevant to patients, clinicians, scientists, and policy-makers. Their translational research is focused on the epidemiologic, economic, and clinical analysis of peripheral and brachial plexus nerve injuries.

Article in the West Australian about Striate+

Interesting to see any sales numbers next quarter now that private health insurers benefit set for nerve repair.

Remplir™ granted inclusion on the Australian Prostheses List

The Prostheses List defines the minimum value of benefit private insurers pay for Remplir™ used in approved peripheral nerve repair and reconstruction procedures

Significant Australian addressable market, with 11,7801 surgical repairs of peripheral nerves completed in public and private hospitals in the 2019/20 financial year

Device Technologies appointed as exclusive distributor of Remplir in Australia, with first orders shipped in September 2022

Orthocell is well-positioned to gain traction in Australia and to expand into the US, the largest global healthcare market.

First purchase orders received from newly appointed distribution partners for Orthocell’s flagship collagen medical device products Striate+ and Remplir. Facility upgrade and scale up of Striate+ and Remplir manufacturing capacity to meet current and forecast demand completed.

No indication of volume but good to see the 2 distributors out promoting the products.

Orthocell have been assisting the sales and marketing team at BioHorizons prepare for US market entry by hosting targeted online Striate+ training programs, highlighting the products ease of use and high-quality patient outcomes. BioHorizons will be promoting Striate+ for use in dental guided bone and tissue regeneration procedures at the upcoming American Academy of Periodontology Annual Meeting in Phoenix, Arizona between the 27th – 30th October, with active US sales representation of the product to follow in November, 2022.

Orthocell have been actively working with the internal sales and marketing team at DVT preparing for Australian market entry, leading in-person product training sessions and participating in marketing workshops. DVT are focused on the establishment of key accounts with leading plastic, reconstructive and orthopaedic specialists and are scheduled to exhibit and promote Remplir for use in peripheral nerve repair procedures at the South Australian Hand Society Meeting on the 24th of October, the 2022 Royal North Shore Shoulder Symposium on Friday 21st October and the Australian Orthopaedic Association in Christchurch, New Zealand from the 30th October to the 3rd November.

Distribution agreement for nerve repair which should lead to revenue following successful reimbursement application by Q4.

No details but it will be interesting to see whether specific revenue is given in the next results.

Device Technologies appointed as exclusive distributor in Australia of Orthocell’s nerve repair device Remplir™ •

Device Technologies has established relationships with leading plastic reconstructive and orthopaedic surgeons and an experienced sales team throughout Australia and New Zealand

Significant Australian addressable market, with 11,7801 surgical repairs of peripheral nerves completed in public and private hospitals in the 2019/20 financial year

Australian reimbursement planned for Q4 CY2022, which defines the minimum benefit value private insurers will pay for Remplir™

Device Technologies will market and distribute Remplir™ for use in the surgical repair of peripheral nerves across Australia and New Zealand, undertaking targeted promotion activities, initiating sales, as well as expanding the network of referring plastic and orthopaedic surgeons. The exclusive distribution agreement has an initial term of five years and enables Orthocell access to this strategic market, with a growing uptake of Australian Made, high-quality healthcare products. 

Big deal after close today. $23.1M AUD up front for an exclusive license for one of the company's products. MC $59M. It is going to be interesting to see what the company plans to do with the funds. No details about the revenue stream (I hope there is one) for manufacture which will be kept by OCC in WA.

Orthocell signs Striate+™ global exclusive license and manufacturing agreement with BioHorizons. The term of the licence is linked to the term of the supply and distribution agreement (25 years)

BioHorizons Implant Systems Inc. (BioHorizons), one of the largest dental implant companies in the world. BioHorizons, Inc. is part of Henry Schein, Inc. (NASDAQ: HSIC) BioHorizons products are available in 90 markets around the world.

Clinical studies have shown Striate+ supported transition from two stage to single-stage dental procedures, reducing the procedure time by several months. This is of significant interest to patients and clinicians due to potential improvements in efficiency and efficacy of dental procedures. BioHorizons will market and distribute Striate+ alongside its innovative and evidence-based dental implants and tissue regeneration products, to continue to improve the life of patients with missing teeth

In consideration for the license granted, BioHorizons agrees to pay Orthocell AU $23.1 million1 (USD $16 million) • Orthocell will grant BioHorizons an exclusive licence of intellectual property (IP) relating to Striate+TM, a resorbable collagen membrane, manufactured by Orthocell, used for dental guided bone and tissue regeneration procedures •

Orthocell will supply BioHorizons with Striate+ products embodying the IP and grant exclusive distribution rights of those products globally • Striate+™ is manufactured by Orthocell at its quality-controlled Good Manufacturing Practices (GMP) licensed facility in WA, using the Company’s proprietary SMRT manufacturing technology. 

Disc: held in RL

Tax refund for OCC and 24 month update on nerve reconstruction trial. Life changing for people to regain improved use of muscles in upper limbs.

Orthocell receives R&D Tax Incentive refund of A$2.1m

Funds will be invested into the scale up of Striate+™ and Remplir™ manufacturing capacity and distribution partnering programs, progression of Remplir™ US regulatory studies, and to advance the development and commercialisation of OrthoATI™

Final data read out of all patients in Orthocell’s nerve reconstruction trial demonstrates early recovery of muscle function to paralysed upper limbs and continued improvement between 12 and 24 months

Quadriplegic patient outcomes Over half of the nerve repairs augmented with Remplir™ (17 of 33) were performed in five quadriplegic patients. The results for this challenging condition have been very encouraging. Patients demonstrated faster and better results in muscle function restoration compared to published studies of nerve transfer surgery using the standard method (direct suture). In particular, 76% of the quadriplegic nerve transfers (13 of 17) resulted in the best-case clinical outcome for target muscles (MRC Grade 3 or 41 ) at 12 months post treatment, improving to 92% (11 of 12) at 24 months post-treatment (Figure 1). An MRC Grade 3 or 4 means quadriplegic patients regain a level of independence, enabling them to perform tasks such as brushing teeth, drinking from a cup, and transferring into and out of a wheelchair without assistance.

At 12 months, 76% of all reconstructed nerves (25 of 33) resulted in functional recovery of muscles controlled by the repaired nerve, improving to 85% (23 of 27) at 24 months post treatment

In the quadriplegic patient cohort, 76% (13 of 17) of reconstructed nerves also resulted in functional recovery (MRC ≥3) of muscles controlled by the repaired nerve at 12 months, improving to 92% (11 of 12) at 24 months post-treatment

Orthocell is in advanced discussions with potential marketing and distribution partners in Australia and progressing its regulatory strategy to achieve US market approval 

https://www.orthocell.com.au/asx-announcements-3

4C puts a few timelines out. News coming in Q2

Orthocell’s net operating cash outflows for the quarter were A$2,355k. Most of the expenditure was allocated to commercial and R&D related activities. At the end of the quarter, Orthocell held a cash balance of A$11.2m. 

Key highlights for the quarter:

Remplir™ nerve repair device receives Australian regulatory approval for introduction into the Australian nerve repair and regeneration market

Application for inclusion of Remplir™ on the Prostheses List on track for submission in Q2 CY2022

Final Remplir™ 24 month results of all patients in the nerve regeneration study on track for Q2 CY2022

Significant Striate+™ US market entry progress with sale of over 1,500 Striate+™ units achieved, and commencement of facility upgrade to enable scale up Striate+™ manufacturing capacity to >100,000 units per year • Striate+™ distributor discussions progressed and the Company is in advanced discussions to engage its first US distributor and establish Striate+™ as the premium dental membrane

The final data from the OrthoATI™ Phase 2a study on track for Q2 CY2022

Good to see some mainstream media coverage of the TGA approval in today's Australian.

"In a major step forward for treating victims of paralysis, Australian regenerative medicine company Orthocell has won regulatory approval" (Paywall for article)

https://www.theaustralian.com.au/science/hope-for-quadriplegics-as-miracle-treatment-gets-green-light-from-regulator/news-story/eea14440b3fd21d20e777ac510de4fd3

OCC in a trading halt.

The reason for the trading halt is that the Company intends to make an announcement in relation to the regulatory approval of a medical device from the Company’s CelGro™ platform.

Hopefully TGA approval for Remplir™ in the Australian market for peripheral nerve repair.

I'll admit I got a bit carried away with my hopes for OCC. Only 26k increase in revenue 2M outflow and still no US distribution for Striate.

Some positive news about further data analysis of the steroid to ATI switch over participants in the rotator cuff trial.

Progress on TGA approval for Remplir peripheral nerve repair. Planning to make a submission to be eligible for reimbursement from private health care funds.

More funds will be spent for phase 2b Ortho ATI trial to get FDA approval and to get Remplir approval.

18 months or less will need more cash.

OSX (up 10%) another ASX regenerative microcap announced a big research deal with Singaporean institutions that looks to be in direct competition to OCC’s dental striate product.

Osteopore secures lead role in Clinical-industrial Partnership with National Dental Centre Singapore and A*STAR research institutes through A$19m project, develops next generation jaw implant to access the A$1.26b dental bone graft and membrane market

Good coverage on channel 9 news this evening

https://www.9news.com.au/national/new-groundbreaking-non-invasive-procedure-to-help-heal-chronic-tendon-injuries/d4f24a4b-351d-446a-9226-645665b48859

Looks to be very positive results of rotator cuff tendon trial.

OrthoATITM tendon clinical study success

• Study results show that OrthoATITM is significantly more effective than steroid injection for treatment of rotator cuff tendinopathy with intrasubstance tendon tear

• 95% of participants at 12 months post OrthoATITM treatment reported a level of function of the treated shoulder consistent with a successful outcome after having received an average of 4 failed conservative treatments including physiotherapy and steroid injections

• OrthoATITM patients experienced almost complete resolution of pain by month 1 post-treatment which was sustained over the assessment period

• Participants receiving a steroid injection had no meaningful improvement in function, and only a transient improvement in pain at month 3 before returning to pre-treatment levels

• 64% of steroid participants withdrew early from the study due to treatment failure. Of these early withdrawals, 86% requested and received OrthoATITM treatment due to ongoing pain and loss of shoulder function

• There are currently no proven long-term non-surgical solutions to treat chronic shoulder tendon injuries

• OrthoATITM is well positioned to become the first FDA-approved injectable cell therapy in orthopaedics for the treatment of chronic tendon injuries.

Directors selling to an Australian based investment fund

Two of the founders (Anderson/ Washer) selling shares for the first time via transfer at 10 day VWAP prior to the sale.

Washer selling $200K(27%)  Anderson $551K (14%)

"To help fulfill the investment threshold required by the fund and to cover tax liabilities arising from the exercise of OCC options.."

Further progress on the ACL collagen rope development. Next trial on sheep for closer model to humans. Avoids hamstring tendon harvest to simplify procedure. 

“Approximately 15,000 ACL knee reconstructions are done annually in Australia and up to 200,000 per year in the United States,” 

“harvesting the patient’s tendon significantly extends surgery time, introduces donor site pain, morbidity and potentially nerve damage. Tendon harvest can result in donor-site tendon tears and/or rupture during rehabilitation, prolonging recovery time. There is also a limited amount of healthy graft tissue available, which may compromise the repair or inhibit the opportunity for subsequent repairs.”

Promising data for CelGro® collagen rope for Anterior Cruciate Ligament reconstruction
• Pre-clinical study data in rabbits indicate that a novel CelGro® collagen ‘rope’ is a viable alternative to conventional autologous tendon grafts for Anterior Cruciate Ligament (ACL) reconstruction
• CelGro® collagen rope promoted ligamentisation and exhibited tissue architecture that mimics native ACL
• CelGro® collagen rope integrated with the host bone tunnel and was biomechanically comparable to hamstring tendon autograft
• Results position CelGro® collagen rope as the potential first off-the-shelf biological device for ACL reconstruction
• In light of these results, Orthocell plans to advance development of this technology and will commence a larger animal study followed by first-in-human trials

Rotator cuff study

The last patient treated in the randomised clinical study comparing Orthocell’s tendon regeneration therapy (Ortho-ATI®) to corticosteroids has completed their 12-month follow up; • Final data collection and validation is in progress, results expected in Q4, 2021

revenue up 41.5% to 1M but costs up 46.9% to 9M

Cash of 16M with 6M options expiring 12\21 @25c

Total shares 190M up from 170M

Inventory up from 47K to 470K

Rotator cuff trial results just says CY21 so possibly delayed?

Dental revenue unlikely to support tendon/ligament/ nerve development but no immediate need for CR

So holding pattern until release of trial result and FDA submission for Nerve progression.

Possible inflection point for OCC in next half.

Results of world first randomised active controlled clinical rotator cuff trial due 3Q for ATI

Entering US dental market with Striate+ collagen membrane for bone/soft tissue regeneration, logistics, ambassadors, marketing in place to generate revenue.

Seeking FDA expedited approval for nerve regeneration following promising results for upper limb paralysis.

Further patents HK/China/NZ for sutureless ligament repair.

Cash balance 16M covers 9Q

Risks 

Take up in dental against current standard PRP therapy for bone.

Covid reducing uptake for dental in UK/EU

Early patents for IP expiring 2027

Disc: held in RL.