By Lisa Seachrist

Washington Editor

GAITHERSBURG, Md.— The same day an FDA panel gave Advanced Tissue Sciences Inc. conditional backing for its bioengineered wound treatment, Dermagraft, the advisory group handed Organogenesis Inc. outright support for its skin replacement product, ApliGraf.

Organogenesis' stock gained 13.5 percent following Thursday's 5-4 vote to recommend FDA approval of ApliGraf (grafskin) for venous leg ulcers without any requirement for additional trials. The four General and Plastic Surgery Devices Panel members opposed to the unconditional recommendation favored some labeling changes in return for their support.

"We were very pleased with the results of our trial and went into the meeting looking forward to presenting our findings," said Carol Hausner, director for investor and public relations at Organogenesis, of Canton, Mass. "We were excited by the panel's support. We fully expect ApliGraf to bring the company to profitability after it hits the market."

ApliGraf, Organogenesis' lead product, is a living human skin equivalent which contains both epidermis and dermis layers of skin. The product is engineered from discarded foreskins of human infants. Rather than utilizing a scaffold for the cells to grow around, ApliGraf is made by culturing the cells in a three-dimensional culture system that yields the two layers of skin. ApliGraf is viable on agarose for up to 5 days.

The company tested the product as a treatment for venous leg ulcers — a chronic wound typically around the ankle caused by poor blood circulation. Approximately 1 million patients in the U.S. suffer from venous leg ulcers, which can persist for longer than a year.

The company presented data to the committee comparing the application of ApliGraf to standard compression therapy for venous leg ulcers in a study of 297 patients. Organogenesis found that in patients who had had their ulcers for longer than one year, 42.2 percent of the ApliGraf group had their wounds completely healed compared with 18.8 percent of those receiving standard therapy. For leg ulcers of less than one year in duration, ApliGraf was just as effective as compression therapy.

"This product has clearly shown a benefit for patients who've had their ulcers for more than one year," said Joseph Boykin, a wound specialist of the Columbia Retreat Hospital Wound Healing Center, in Richmond, Va. "I am satisfied that it is safe for the patients as well."

ApliGraf Side Effects Included Infections

Serious adverse events occurred equally within both groups studied; however, those receiving ApliGraf were more likely to suffer from any type of infection than those who had compression therapy. Some members of the committee wanted to compel the company to follow up on the infection issues as a condition of approval.

"In a heavily contaminated wound, placing a graft over it is a serious risk for infection," said Thomas Mustoe, professor of surgery at the Northwestern School of Medicine, in Chicago. "We should be following that."

Nevertheless, the panel voted to recommend the device for approval without condition. The FDA usually follows the recommendations of its advisory panels but is not compelled to do so.

Should the product come to market, James Trozze, senior vice president of research at Moors & Cabot, in Boston, agrees that Organogenesis could see profitability soon.

"The company's position that ApliGraf sales could make it profitable is entirely realistic," Trozze said. "This could be a very big market."

The company has trials to expand ApliGraf's indication into diabetic foot ulcers, burns and bed sores. Trozze noted that it is entirely possible that ApliGraf and Advanced Tissue Sciences' Dermagraft — which received a more circumspect recommendation from the panel earlier Thursday — could be competitors in the emerging field of tissue-engineered skin.

However, not all analysts see such a rosy picture for these products, citing that the therapies are expensive relative to current treatment options and not all that much more effective.

Organogenesis' stock (AMEX:ORG) rose $2.63 to close at $22.06 Friday. The increase is not welcomed by some investors, who see the stock as overvalued. A number of them, representing 7.4 million shares, or one-third of the company's outstanding stock as of Jan. 15, took a short position on Organogenesis, expecting its shares to drop.

Advanced Tissue Sciences' stock (NASDAQ:ATIS) also gained Friday following the conditional recommendation of Dermagraft, ending the day at $13.75, up $0.438. (See BioWorld Today, Jan. 30, 1998, p. 1.)

Organogenesis' marketing partner for ApliGraf is Novartis AG, of Basel, Switzerland. Advanced Tissue Sciences recently licensed Dermagraft marketing rights to Smith & Nephew plc, of London. *

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