By Lisa Seachrist

Washington Editor

WASHINGTON - An FDA advisory panel on Monday backed Organogenesis Inc.'s plan to market its skin replacement product, Apligraf, as a treatment for diabetic foot ulcers.

The General and Plastic Surgery Devices Advisory Committee to the FDA unanimously endorsed the product. The FDA usually follows the advice of its advisory panels, but is under no obligation to do so.

"We were very pleased with the unanimous decision, but the data were very strong," said Philip Laughlin, president and CEO of Organogenesis, adding that some labeling issues still need to be addressed. "There are no trials required. We will be interacting with the FDA to hammer out the labeling necessary to get approval."

"It was a straightforward approval vote with some conditions," said Michael Ehrenreich, president and director of research for Techvest LLC, of New York. "Those conditions were not terribly surprising or onerous."

Among the conditions are that the label must say that the therapy is for use on patients with ulcers that have failed standard therapy and that it must be clear the product, in trials, had not been compared to human skin grafts. "It was a good meeting and those labeling issues are not major," Ehrenreich said.

Apligraf was approved in February 1998 for treating venous leg ulcers caused by circulatory problems. Venous leg ulcers afflict nearly 1 million Americans each year. The ulcers are notoriously hard to heal - some can persist for more than a year. (See BioWorld Today, Feb. 2, 1998, p. 1.)

An indication in diabetic foot ulcers opens the market for Apligraf to another 600,000 to 800,000 Americans. However, diabetic foot ulcers often are considered more serious because one in five leads to amputation. Diabetics are hospitalized more frequently for foot complications than anything else.

"Our sales are still small, but we think it will get a major boost from two areas," Laughlin said. "First, when we get FDA approval for this indication, which is a much more serious condition. It's a big deal. That will help the venous leg ulcer indication. Second, as soon as we get standardized reimbursement for the product. Right now it's spotty. Those are the key drivers. We're making nice progress on one and we're working on the other."

Apligraf is the first living product to show efficacy in diabetic foot ulcers. It is an all-natural product engineered from discarded foreskins of human infants. It is living human skin equivalent containing both the epidermis and dermis layers of skin. Rather than using a scaffold for the cells to grow around, Apligraf is made by culturing the cells in a 3-dimensional culture system that yields the two layers of skin. Unlike human skin, Apligraf does not contain blood vessels, hair follicles or sweat glands.

In a clinical trial of 208 patients, the company showed 56 percent of patients treated with Apligraf had their foot ulcers heal by the end of 12 weeks compared with 36 percent of patients receiving standard care. In addition, the use of Apligraf reduced the time to healing to 65 days from 90 days with the standard care. (See BioWorld Today, Dec. 23, 1999, p. 1.)

In January 1996, Novartis Pharma AG, of Basel, Switzerland, licensed worldwide marketing rights for Apligraf in all indications for $37.5 million in equity investments, milestone payments and research support, plus manufacturing payments and royalties.

Organogenesis' stock (AMEX:ORG) closed unchanged Friday at $11.375. The company's stock did not trade Monday while the product was before the committee.

Editor's Note: Mary Welch contributed to this report.