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Advanced material for the regeneration of oral mucosa injuries

Periodic Reporting for period 1 - NEOFIBRIN (Advanced material for the regeneration of oral mucosa injuries)

Reporting period: 2017-02-01 to 2017-07-31

The project NEOFIBRIN was submitted to the Horizon 2020 program call SME Instrument Phase 1 with the aim of evaluating technical, industrial scale-up and market feasibility of the novel tridimensional scaffold for restoring masticatory oral mucosa functional activity.
Patented and produced by Histocell S.L HR018-NEOFIBRIN is an innovative absorbable matrix for application in lesions of the oral mucosa with the ability to promote the regeneration of soft tissues as well as to treat localized mucosal damage. The product is composed of fibrin, obtained from coagulation of the fibrinogen present in the plasma, and agarose. Briefly, fibrin creates a highly compatible three-dimensional matrix which promotes regeneration of the lesion and agarose confers consistency. This unique combination of natural components brings up a new exclusive matrix design which provides mechanical support to cells to migrate and restore functional activity of mucogingival tissue.
Considering only the 5% of the identified severe recession cases, it is estimated a market size of almost 8 Million cases for HR018–NEOFIBRIN per year in seven of the major markets (Germany, France, UK, Spain, Italy, Japan and USA). This market is anticipated to increase if severe periodontitis cases are also included.
Industrialization barriers have been properly identified in terms of tentative prices of the main raw materials per HR018–NEOFIBRIN unit, and establishing a manufacturing capacity of the new demonstration plant. In addition, the necessary approach to guarantee viral safety of plasma source has been developed.
Although commercial barrier analysis identified various competing products, none of them has still demonstrated to be effective enough, and periodontists confirmed the need of innovative matrices with higher resistance capable of being left exposed in the oral cavity such as HR018–NEOFIBRIN.
All the above mentioned tasks have resulted in an improved business plan for industrial-scale advanced manufacturing, clinical trial development, financing, and commercialization of HR018-NEOFIBRIN for oral mucosa injuries.
The work performed during the reporting period of NEOFIBRIN is as follows:

1 Confirmation of market size of HR018-NEOFIBRIN
To estimate HR018-NEOFIBRIN market size, first, the geographical market was limited to a few countries; second, access to dental care was investigated in the selected countries; and third, prevalence data on the main periodontal diseases leading to mucogingival surgery was evaluated. Finally, hypothetical market share estimation was applied to obtain a better approach to the potential market of HR018-NEOFIBRIN.
HR018-NEOFIBRIN’s potential market comprises residents of high-income countries with oral pathologies that are likely undergo periodontal surgery thanks to their higher disposable income. Thus, those countries identified as the Seven Major Markets were chosen for the estimation of the HR018-NEOFIBRIN’s market. Selected markets include Germany, France, United Kingdom, Spain and Italy within Europe, and Japan and United States of America.
Regarding the access to the dentist at targeted countries, it is known to be high, overcoming 90% in all the territories according to data from the Eurobarometer Report on oral health, supported by the European Commission, and the information revealed by the American Dental Association (ADA) and Japan Dental Association.
We have based our market size estimation on severe gingival recession rate. Therefore, almost 8 Million possible cases have been estimated with potential to be treated with HR018–NEOFIBRIN in seven of the main countries. This estimation has been made considering only the 5% of identified severe recession cases, under “real market” concept assumption.
2 Detection of large-scale industrialization and commercial barriers
When Histocell started the design of HR018–NEOFIBRIN medical device, industrial manufacturing scale-up was taken into account from the early stages of product development with the aim of obtaining a new biomaterial that could be produced consistently using capable process. This way, industrialization barriers related with the transition from the development phase into industrialization and large-scale production have been minimized.
Main aspect relevant for HR018–NEOFIBRIN marketing is the cost of raw materials, specially the cost of plasma and agarose. Reliable well priced sources of both types of plasma as well as agarose have been detected to estimate the cost of goods for the manufacturing of this advanced material.
Considering the versatility needed to manage oral mucosa lesions, HR018–NEOFIBRIN could be manufactured at different sizes. In order to calculate an estimated cost of raw materials per HR018–NEOFIBRIN unit, a dressing of 20x30 mm (similar to Mucograft® from Geistlich Pharma) has been selected. For these final dimensions, manufacturing of one unit of HR018–NEOFIBRIN requires 10 mL of solution.
A demonstration plant built as part of the Histocell Medical Device factory has been designed with 150,000 HR018–NEOFIBRIN units/year production capacity. Viral safety analysis will be improved to ensure the elimination and inactivation of viruses in the manufacturing process.

On the other hand, competing products have to be considered when analyzing the potential market for HR018–NEOFIBRIN. Fortunately, the market of products for oral mucosa tissue lesions is not saturated, and there is a need for new and effective products, which gives HR018–NEOFIBRIN the chance to get a good market share.
With all information and data collected in Task 1 and 2, the first deliverable of the project was prepared:
“D1. Report on market size and commercial barriers for the new product”

3 Intellectual property protection plan
The IPR strategy has been defined. The product HR018–NEOFIBRIN will be protected by two different patents, patent WO2011_023843 (PRODUCTION OF ARTIFICIAL TISSUES BY MEANS OF TISSUE ENGINEERING USING AGAROSE-FIBRIN BIOMATERIALS) from the University of Granada, Spain, which has been lice
The feasibility study performed under Phase 1 of the SME Instrument project, has successfully evaluated technical, industrial scale-up, regulatory and commercial barriers for HR018-NEOFIBRIN. As a result of the work undertaken, a positive outcome of the Phase 1 is confirmed and hence, the opportunity to continue with HR018-NEOFIBRIN business idea is highlighted.

The new biomaterial proposed, HR018-NEOFIBRIN, would at first address this niche market and pursues to be an effective solution to repair the defect and restore bioactivity of the oral mucosa tissue. The new product will certainly reduce donor site morbidity, because no autologous graft will be needed, and it will overcome the limited availability of the tissue, since the new biomaterial will be commercially available from the usual channels. Moreover, related surgical complications or infection risks will be decreased, and surgery time will be shortened, resulting in less use of analgesics and higher patient satisfaction.

Eight million cases of severe recession is the first realistic estimated market size for HR018-NEOFIBRIN in Europe, Japan and USA. Despite the significant variety of competing products playing in oral mucosa regeneration in this market, not even the current leader Mucograft, has proved to be as clinically effective as autologous tissue grafts, the current “Gold Standard” at periodontal reconstruction. For this reason, consulted periodontal experts are favorable to HR018-NEOFIBRIN as it will offer proper mechanical properties that could be maintained in the patient tissue until an effective tissue remodeling.

The performed analysis regarding industrialization barriers has demonstrated that HR018–NEOFIBRIN can be manufactured in a demonstrative plant to support the demand for first years of commercialization.

The updated business plan has shown the profitability of this product when it will be launched to the market in 2022, considering estimated transfer price and COGs. Histocell has made a first estimation of the cost of goods of HR018-NEOFIBRIN that is reasonable, about 25% of the final estimated transfer price to the distributors.

The estimated figures in the business model show a very good market potential and high profitability of this product for Histocell. Estimated peak sales per year of Histocell after full commercialization of the product in all the main markets could be about 40-50 Mill Euro. The estimated peak sales of the product for our distributors could be about 150 Mill Euros per year.

If new indications are developed and new niches could be identified for HR018-NEOFIBRIN, then the sales of the product could grow much more than these initial and conservative figures, calculated only for a market of 8 Million patients population and 5% of market potential in one indication.
Different alliances will be necessary to continue HR018–NEOFIBRIN project. A Notified Body with expertise in similar products will be selected for CE pathway. For the execution of clinical trial, support will be needed in terms of CROs and clinical partners. Commercial partners will also be important as distributors and KOL to introduce the product into the market. Apart from these alliances, access to funding under Horizon 2020 SME Instrument Phase II program will be key for obtaining the required support for HR018–NEOFIBRIN project continuation.