An Update on Bone Graft and Bone Substitutes

Maria Shepherd, Data Decision Group

In 2009, Orthopedic Design & Technology reported that the U.S. market for osteoconductive and osteoinductive implants was a market to monitor because it has active development, expectations of continued significant transition and high growth. Among other applications, bone grafts and bone substitutes are used in arthroplasty, fracture repair, and spine fusion procedures. In 2009, industry estimates placed the market size at $1.5 billion.1 New reports project this market to grow significantly, to $7.5 billion by 2016.2 (See Chart 1.)

Growth Through Acquisitions

Expect more mergers and acquisitions in the biomaterials segment such as Stryker Corp.’s $304 million purchase of bone graft materials maker Orthovita Inc.3This acquisition may create more jobs in sales, and also innovative technology as the companies’ respective research and development departments combine skill sets. It also is likely to better position Stryker to compete against rivals Medtronic Inc. and Johnson & Johnson.

“We are expanding our orthobiologics product portfolio and strengthening our competitive position in key segments of the spine, orthopaedics and biosurgery markets,” Stephen P. MacMillan, Stryker’s chairman, president and CEO, said in announcing the Orthovita acquisition on May 16. “We believe the collective talent of our sales forces across multiple franchises positions us to build on Orthovita’s success and accelerate sales growth.”

Such M&A activity is driven by the search for the ideal biological substance that can be developed into biomaterials with regenerative capabilities that stimulate bone growth.

The bone graft and bone substitute market continues to be driven by:

• Surgeon need to increase fusion rates;

• Spine surgery, joint and limb replacement procedure volume growth;

• Development of growth factors; and

• New bone implant technology.

The market mix has shifted substantially since the 2009 report in ODT.2 New segments have emerged and orthopedic materials routinely are being used in spine and other applications such as joint and limb replacements (see Chart 2).

As a result:

• Allograft revenues are estimated to have increased to $1.62 billion;

• Sales of synthetic bone graft substitutes (SBS) have ballooned to approximately $1.98 billion, with ceramic SBS capturing the majority share over polymer SBS; and

• Bone morphogenetic protein (BMP) market share appears to have plateaued at $840 million of the global market. Such a leveling off of the market most likely is due to negative publicity regarding BMP products and legal procedures directed towards BMP manufacturers.

Stem Cell Update4

Mesenchymal stem cells (MSCs) are still of great interest because of the promising signs they have displayed in reconstructing damaged and/or diseased tissue. MSCs send repair cells to a damaged site and adapt to the body’s inflammatory and auto-immune responses. These two properties make stems cells very appealing to treat a variety of pathological conditions. A recent report, 2011 Update on Mesenchymal Stem Cells, concludes that the robust osteogenic differentiation capacity of MSCs has been evaluated in preclinical settings of healing and repair but have not yet reached a critical mass in human clinical trials. In other studies, it has been demonstrated that autologous MSC composites could improve bone regeneration and achieve osseous spinal fusion. This result may be mediated by endogenous osteoblasts, meaning that MSC therapy particularly may be

beneficial for elderly patients and those with reduced cellular stores.5

This is an exciting time to be in the biomaterials sector of orthopedics. New biologics and mechanical technologies now in development seek to close the gap on the treatment of back and joint pain. There is still a long way to go, but with all the research going on in this area, advances are being made quickly.

References:

1. www.pearldiverinc.com

2. Orthopedic Biomaterials,

www.marketresearch.com

3.www.mlive.com/business/west-michigan/index.ssf/2011/05/update_strykers_304_million_ac.html

4. www.ncbi.nlm.nih.gov/pubmed/21447297

5. Gan, et. al. Spine 28: 1219-1224

Maria Shepherd, founder of Data Decision Group, has 20 years of leadership experience in medical device/life-sciences marketing in small startups and top-tier companies. The firm quantitatively and qualitatively sizes opportunities, evaluates new technologies, and assesses prospective acquisitions. Shepherd can be reached at (617) 548-9892 or at [email protected] or www.

ddecisiongroup.com.

Correction: In the last issue of Orthopedic Design & Technology, the charts in the Market Snapshot column had incorrect figures. Please visit the May/June issue online at nitesh_odt.rodpub.com for the corrected graphics.