A new press release of US-based Osiris Therapeutics boost a value of the company more than twice overnight. The price per share skyrocketed from $10 to $25 (+140%) in a single day – August 13. This is a very rare case for cell therapy industry and it made me wonder – why did it happen? Is it a real new revolution in medicine or just gamble on a stock market? The press release (PR) was about preliminary results of post-marketing clinical trial, assessing wound care product Grafix in diabetic foot ulcers (DFU). In this post, I’ll try to separate a hype from real data and expectations.
Hype and buzz words
First of all, I’d like to point out that this PR is loaded with buzz words! Starting from the headline and throughout of PR “stem cell brand” is everywhere:
… Overwhelming Efficacy in Landmark Stem Cell Study…
“Today, Osiris has established a new standard in diabetic wound care and has demonstrated to the world the tremendous impact stem cell products can have in medicine,” said C. Randal Mills, Ph.D., Chief Executive Officer.
“These data are very compelling as we have not had a new cellular therapy for diabetic foot ulcers in over 10 years,” said Dr. Larry Lavery, Principal Investigator…
“This is one of the most rigorous wound care trials conducted”… said William R. Hiatt, M.D.
… providing patients with a rich source of healthy, non-controversial stem cells… said Michelle LeRoux Williams, Ph.D., Chief Scientific Officer.
Using lots of buzz words in PR has purely marketing intention and almost always distort the reality. Bad practice! A big red flag! All quotes that I’ve picked above not even close to reality. For example, Osiris never provided any evidence for Grafix as a “stem cell product”. There is no publications. So, there is no any science behind of stem cell claims about Grafix. Taking in account a long bad Osiris history of over-hyped PRs, how much can I trust to this one?
Let’s look at Grafix data closely:
For the primary endpoint, 62% of patients receiving Grafix had complete wound closure compared to only 21% (p < 0.0001) of patients who received conventional treatment for their wounds – a relative improvement of 191%…
Grafix performed three times better than control group! It is impressive, indeed. But if we look at across historical data for new advanced wound care products (AWCP), such as acellular extracellular matrices (ECM) and matrices with cells, we can see something around 50-65% or greater of complete wound closure. Some examples: OASIS – 49%, Apligraf – 56%, TheraSkin – >60%, Talymed – 86.4% (for venous leg ulcers), EpiFix – 92%(!). Taking in account, (i) % of complete wound closure, (ii) time of complete wound closure and (iii) number of product applications, results for Grafix are good, but not exceptional. We’ve seen something like that before for many AWCP.
It is important to note that study is still ongoing and “success rate” could change in the future. For example, previous report (from March 2013), based on the 62 patients indicated 70% of complete wound closure in 12 weeks after 3 applications. The current report, conducted on 97 patients indicates 62% of of complete wound closure in 12 weeks after 6 applications. Even though, the study can be finished early, if results are “dramatically positive”, estimated enrollment is 266 patients. So far 131 patients were enrolled. We don’t know how results will change with time, but there is a trend toward dilution of efficacy with number of patients from March to August of 2013.
The questions about control group
Some analysts noticed a very low rate of complete wound closure in control group (21%). I decided to look at data from some other studies for AWCP and came up with the same conclusion. For example, for DFU: Apligraf – 56% versus control – 38%, OASIS – 49% versus control 28%; for venous leg ulcers: OASIS – 54.8% versus control – 34.5%, Talymed – 86.4% versus control – 45.0% (reviewed here), DermaGraft – 52-47% versus control 37-39% (depending on size of ulcer). There are very few studies with comparable to Grafix complete wound closure rate in control group (DermaGraft 2003 study), but it’s rather exception. So, 21% of healing rate in control for the “19 leading wound care centers across the United States” sounds suspiciously low.
Yet another big question – what kind of “standard care” was used in control group? PR didn’t say anything about it. But I and some others think, that AWCP must be used as controls! Especially those, which on a market for many years (Apligraf, DermaGraft) and have become a new “standard of care”. The studies where different AWCP compared to each other has been already conducted. It is obvious to me that “impressive” efficacy of Grafix will disappear in comparison to other modern AWCP as control.
Inclusion criteria and ABI
It is important to look at inclusion criteria in the study. Particularly, one criteria, which captured attention of the critics, is Ankle Brachial Index (ABI). In Grafix trial only patients with ABI > 0.7 and < 1.3 were included. I’m not sure what % of patients with DFU have ABI < 0.7 (need your help!), but they will be much more resistant to Grafix and other AWCP. Fas Kuiters – cell therapy investor from Germany, made a very interested comment in one of LinkedIn discussions (I’m posting from his permission):
“Having looked at the treatment of chronic diabetic wounds recently, a key element appears to be the ABI (Arm Brachial Index) which measures the blood flow to the extremities, which should be sufficient to sustain/support the healing process.
Dermagraft in its trial had a 15% healing rate with standard of care and 30% with Dermagraft treated + standard of care. The inclusion criteria required an ABI >0.8.
Grafix in its trial had a 21% healing rate with standard of care which improved to 63% with Grafix added. The inclusion criteria required an ABI >0.7 and < 1.3.
The recent peer reviewed paper I studied on a European clinic with ADRCs had a healing rate of 60% for patients who reached an ABI 0.5 to 0.6 after receiving standard of care and therefore would not have been included in either the DermaGraft and Grafix clinics. With an ABI of 0.7 to 0.8 the healing rate was 100%.
So – my conclusion- there are more effective treatments than Grafix.”
Cost effectiveness and competition
Grafix sold on a market for the last couple of years (if not longer), but price for the product was never disclosed by Osiris. It is despite the fact that Grafix has a reimbursement code. There was only one mention of potential cost of Grafix:
All thanks to more than $100,000 worth of donated stem cell therapy.
It is unclear how many times Grafix was applied, for how long and for what size of wound, but price tag $100,000 for AWCP makes me laugh. So, it is impossible to estimate cost effectiveness and potential economic impact of Grafix at this point. But these 2 parameters are extremely important, because competition on the market of AWCP is extremely hot. Grafix has a whole bunch of competitors – Apligraf, DermaGraft, EpiFix, TheraSkin, Talymed, OASIS to name a few. Competitors with a total cost of therapy from 2-3k to 30k (reviewed here and here). Competitors with efficacy up to 92% and wound healing speed 6 weeks (fresh EpiFix data). So, I don’t see any reason for investors to be super excited about Grafix. Revolution will be brought by many AWCP, not just one!
As claimed by Osiris, Grafix is “stem cell product”, which regulated as HCT/P – means does not need clinical trials and BLA as a drug:
Grafix is regulated by the FDA under 21 CFR Part 1271 Human Cells, Tissues and Cellular and Tissue-based Products (HCT/Ps). Osiris Therapeutics, Inc. is registered with the FDA as a tissue establishment and accredited by the American Association of Tissue Banks (AATB).
Isn’t FDA too loose to allogeneic stem cell product? Well, since August 14 (next day after Osiris stock boom!) FDA assigned regulation of wound care products containing live cells to CBER. It means that Grafix under serious threat of “to be regulated as a drug” in the future. It is very much possible, because CBER is trying to regulate all claimed “stem cell products” as drugs. In this scenario, based on Grafix risks assessment, Osiris will drop the product:
Should the FDA decide that Grafix or Ovation, or that any other biosurgery product we may develop, does not meet the appropriate regulatory requirements, we will be required to stop production, which could have a material adverse effect on our business, financial condition and results of operations.
Despite some reasons for optimism, based on preliminary Grafix data in DFU, recent Osiris PR was designed specifically to boost stock price. As for now Grafix is hype, but not a revolution in medicine.
Finally, I’d like to share some negative responses to Grafix PR from business analysts: