Medical Device Daily Associate

Genzyme's (Cambridge, Massachusetts) Genzyme Biosurgery unit reported acquiring Verigen (Leverkusen, Germany), a company with a patented cell therapy product for cartilage repair currently sold in Europe and Australia, giving it a ready-made, next-generation product to most likely replace its successful Carticel offering in the future.

Genzyme purchased Verigen for $10 million in initial payments, plus potential added payments of up to $40 million over the next six years based upon the achievement of development and commercial milestones. These include approval of a biologic license application in the U.S., FDA marketing approval and sales royalties.

To date Genzyme has acquired about 96% of Verigen's shares and said it anticipates acquiring the remaining shares in the first half of the year.

Verigen's primary product is matrix-induced autologous chondrocyte implantation (MACI), thereby expanding Genzyme's orthopedic offerings and providing a second-generation product for the U.S. market. Carticel (autologous cultured chondrocytes), Genzyme's first-generation product, has been used in more than 10,000 patients since it was introduced in 1995.

“We've marketed Carticel since 1995 and it has been a successful product for us,“ said Genzyme spokesperson Dan Quinn. “I think we've long been looking for ways to improve it in a second-generation version, and we think that [MACI] is the best thing out there that we've seen and will accelerate our development of a second-generation product in the U.S. market,“ he told Medical Device Daily.

In Verigen's MACI procedure, technicians in the laboratory seed the patient's cells onto a collagen membrane, which is fitted by a surgeon into the cartilage defect and can be secured without suturing.

MACI eliminates the need for surgeons to suture a piece of the periosteum (the skin covering the bone) over the implanted cells, as they do during the Carticel procedure. As a result, MACI can be performed during a faster, less-invasive procedure than Carticel surgery, offering advantages for surgeons and patients.

MACI has been delivered to more than 3,200 patients in Europe and Australia since it was first offered in 1998.

The MACI approach offers a more convenient method of delivery than the traditional autologous chondrocyte implantation method used with Carticel. Both procedures begin when an orthopedic surgeon harvests a biopsy of healthy cartilage from a patient's knee and sends it to a cell-processing facility, where technicians grow millions of new cells. These new cells are then delivered to the surgeon, who implants them into the defect, where they produce new cartilage to effect a repair.

According to Quinn, the main thing that makes MACI attractive to Genzyme is that it can potentially be used arthroscopically instead of in an open knee procedure as is necessitated by Carticel, “if we're able to develop it that way for the U.S. market.“

The transaction also will provide Genzyme with cell culture facilities in Europe and Australia to support sales in those regions. Genzyme has gained substantial expertise in the manufacture of cell therapy products through production of Carticel at its cell culture facility in Cambridge, it said.

“We look forward to building on Verigen's established presence with orthopedic surgeons in Europe and Australia — where we already market Synvisc for pain from osteoarthritis of the knee — and to launching U.S. clinical trials for MACI by early 2006,“ said Ann Merrifield, president of Genzyme Biosurgery in a statement.

While unable to disclose an exact figure at this point, Quinn said the company planned to retain a “significant number“ of Verigen employees, particularly in the sales and commercial sectors of the company in both Europe and Australia, as sales will continue in both those markets after the transaction.

Genzyme has more than a decade of experience in developing and manufacturing autologous cell therapy products that have been used to treat thousands of patients. Epicel (cultured epidermal autografts), a cell therapy for treating patients with severe burns, also is manufactured by Genzyme.

Together, Carticel and Epicel represent the first such products ever brought to market in the U.S., providing Genzyme with what the company said is “superior scientific and commercial expertise in this field.“ Carticel was approved by the FDA in 1997.

Genzyme also is conducting cell therapy research in novel treatments for heart disease, and is exploring the use of adult stem cells in treating a variety of diseases.

Its largest cell therapy development effort is the ongoing Phase II MAGIC (Myoblast Autologous Graft in Ischemic Cardiomyopathy) trial, designed to determine whether cell therapy can be used to reverse damage done to cardiac muscle following a heart attack, or to safely halt a patient's further progression of heart failure.

The trial is currently being conducted in Europe, with plans to enroll up to 300 patients.

Last month, the company reacquired from Wyeth (Madison, New Jersey) the sales and marketing rights in the U.S. and five European countries (Germany, Poland, Greece, Portugal and the Czech Republic) for Synvisc, a leading viscosupplementation product for the treatment of pain due to osteoarthritis (Medical Device Daily, Jan. 7, 2005).

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