Anticipating a New Future

Published: September 8, 2010

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This year's Q2 sales of new products rose 39% compared with Q1.
Osteotech Inc. (Eatontown, NJ) has established itself as a leader in orthopaedic biologics products. Although it is the world’s largest processor of aseptic allograft bone tissue (used in spinal fusion and to replace damaged tissue, ligaments, and tendons), it has received a lot more attention recently as a result of its anticipated acquisition by Medtronic Biologics (Memphis). 
 
Since its founding more than 25 years ago, Osteotech has built a strong portfolio of human tissue technologies for musculoskeletal applications. The company estimates that its processed bone tissues are used in more than 500 transplant patients per day. “Our mission is to develop leading-edge regenerative biologics that will positively impact the lives of patients [and] enhance physicians’ capabilities to deliver superior surgical outcomes,” says Sam Owusu-Akyaw, president and CEO of Osteotech.
 
During the past year, the company saw strong growth of its MagniFuse bone graft technology platform. After distributing the product to nearly 70 hospitals, its revenue exceeded $1 million earlier this year. Owusu-Akyaw believes that the early positive clinical data surrounding MagniFuse, along with its value proposition, will make it the “go-to biologic” for advanced bone grafting. 
 
In August, Medtronic and Osteotech signed a definitive agreement through which Medtronic would acquire the biologics company. Tom McGuinness, general manager of Medtronic’s biologics business, sees significant opportunities during the next 5–10 years in biologics and regenerative therapies. He says Osteotech is part of their strategy for growth, because it will better position Medtronic in the musculoskeletal biologics market. Owusu-Akyaw believes that Medtronic’s global reach makes it the perfect partner to take Osteotech’s mission forward. The acquisition is pending shareholder and regulatory clearances. 
The new customer base for Magnifuse resulted in a 21% revenue increase, along with reaching a 60% reorder rate for the product. The new customer base for Plexur increased product revenue by 73% sequentially. 
Focus Going Forward 
  • Increase the value that franchising brands, including Grafton DBM, MagniFuse bone graft, and Plexur M graft, offers to doctors and patients. 
  • Continue to focus on creating opportunities to capitalize on innovative technology and procedure-specific biologics.
Highlights
  • August 2010: Medtronic signs agreement to acquire Osteotech for nearly $123 million.
  • March 2010: Revenue from MagniFuse surpasses $1 million. 
  • December 2009: Plexur M graft approved for use in 50 U.S. hospitals.
  • November 2009: Secures 10-year tissue-supply agreement with Community Tissue Services. 
  • June 2009: Completes enrollment for DuraTech bioregeneration matrix clinical trial.
  • January 2009: Expands senior management team.
Leadership
Sam Owusu-Akyaw, president and CEO
Robert M. Wynalek, president, domestic
Mark H. Burroughs, executive vice president, CFO
Robert W. Honneffer, executive vice president, global operations
Michael P. McCarthy, senior vice president, sales
Mohamed Attawia, MD, vice president, applied development
Greg Cannedy, vice president, quality assurance, regulatory affairs, and good tissue practices

Published in Orthotec, Fall 2010, Volume 1, No. 2


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