By Debbie Strickland

A 30-year-old idea for treating osteoarthritis of the knee will soon be available in the U.S. The FDA has granted Biomatrix Inc. the company's first U.S. marketing clearance, for the intra-articular treatment Synvisc, which already is marketed in the European Economic Area, Canada and China.

"We've got something to crow about today," said spokeswoman Ann Marie Fields, alluding to a key ingredient, which is taken from rooster combs.

Shares in the Ridgefield, N.J., company (NASDAQ:BIOX) jumped $3 to close at $25.75 Wednesday.

"This approval marks a very important milestone for Biomatrix," agreed Endre Balazs, founder, CEO and chief scientific officer.

It marks a lucrative milestone as well.

Under terms of a marketing agreement with Wyeth-Ayerst Laboratories, a division of American Home Products Corp., Biomatrix will receive a $12 million milestone payment related to the FDA approval.

In addition to the U.S., Wyeth-Ayerst has marketing rights for Germany, Austria, Spain, Portugal, Greece and other countries in Central Europe and the Middle East. All told, the marketing deal is worth up to a total of $23 million in milestones and up-front payments. In addition, Biomatrix will manufacture and copromote Synvisc, designed to restore or supplement the low levels of hyaluronan in the synovial fluid of those who suffer from osteoarthritis of the knee.

Synvisc is sold in Canada by Rhone-Poulenc Rorer, of Collegeville, Pa., and in Sweden by Roche Holding Ltd., of Basel, Switzerland.

Hyaluronan is extracted from rooster combs, purified and formed into either hylan A, a fluid, or hylan B, a gel. Synvisc is a formulation that contains both.

Hylan B is used in Hylaform, a treatment for wrinkles and facial scars approved in 19 European countries and under review at the FDA. It offers an advantage over collagen injections, which provoke allergic reactions in some patients.

When OTC Products Fail

In the U.S., some 16 million people are afflicted with osteoarthritis of the knee. Synvisc is indicated when over-the-counter pain relievers and/or exercise and physical therapy have failed to relieve the sometimes debilitating knee pain associated with the condition.

Synvisc, an elastoviscous fluid, is injected into the arthritic knee joint as a fluid prosthesis to supplement the diseased synovial fluid, with the goal of relieving pain and thereby improving mobility. Patients receive three injections during a two-week period.

Balazs' work on connective tissue and synovial fluid— and his interest in hyaluronan—stretches back to the late 1930s and the early 1940s, when he was studying medicine at the University of Budapest.

In the mid-1960s, by that time a professor and researcher at Harvard University, Balazs conceived of the therapeutic modality called viscosupplementation —the use of intra-articular injections of elastoviscous hyaluronan preparations for patients with osteoarthritis.

The technology he developed at the university's labs and at a small company he founded in the late 1960s eventually was licensed to Pharmacia (now a part of Pharmacia & Upjohn). Pharmacia developed Healon, for use in ophthalmic surgery.

Balazs first tested natural hyaluronan as an osteoarthritis treatment in race horses during his Harvard era. Race horses made good subjects because of the beatings their joints take on the track. Results were encouraging.

"The horse can, after one or two injections, go back to training and even race without any pain," said Balazs. "Of course, the advantage with horses was that they didn't have any placebo effect, and they just really honestly told us [whether] they hurt or didn't hurt."

Natural Hyaluronan Revisited

Despite the promise, natural hyaluronan didn't succeed as a human osteoarthritis therapy. With the founding of Biomatrix in the early 1980s, Balazs returned to the problem and used natural hyaluronan to create new, related substances that offered "more opportunities and a broader spectrum of uses, in several medical fields."

"Synvisc is a significant improvement over earlier hyaluronan preparations," said Balazs, "because it has similar physical [viscous and elastic] properties to those of healthy human synovial fluid, which protects and lubricates the joints."

In addition to Synvisc, Biomatrix developed, manufactures and sells through distributors four other viscoelastic therapeutic products: Hylaform, a viscoelastic gel for the correction of facial wrinkles and depressed scars; GelviscVet, for the treatment of arthritis in animals; and two Hylashield products for the protection of the surface of the eye from noxious environmental conditions.

In the second quarter, the company reported net income of $1.22 million on revenues of $4.98 million, with a 73 percent increase in product sales over the same period in 1996. Biomatrix ended the quarter with $17.67 million in cash. *