By Debbie Strickland

After 12 years in business, Organogenesis Inc. has won FDA marketing clearance for a product, the Graftpatch porcine-source non-living connective tissue patch for use in general surgical procedures—such as hernia and bladder repair—to reinforce soft tissue.

The company's shares (AMEX:ORG) closed Friday at $19.125, up $1.188. Organogenesis, of Canton, Mass., ended the first quarter March 31 with $9.9 million in cash.

The FDA clearance comes on the heels of this spring's Canadian approval of the company's lead product, Apligraf Human Skin Equivalent for venous ulcers. That product became the first living manufactured organ (skin) to be approved by a major regulatory agency following review of its efficacy and safety data. An FDA application for Apligraf in the same indication is pending.

Venous ulcers afflict approximately 900,000 to 1.5 million patients in the U.S. and 4 million worldwide.

In January 1996, Novartis AG, of Basel, Switzerland, licensed worldwide marketing rights to Apligraf (then called Graftskin) for $37.5 million in equity investments, milestone payments and research support, plus manufacturing payments and royalties.

The pursuit of 510(k) clearance for Graftpatch was more low-key than the Apligraf development effort has been. Organogenesis did not specifically mention Graftpatch in its 1996 annual 10-K report filed with the Securities and Exchange Commission. The company also has yet to release publicly clinical trial results for the product.

"There are no clinical data published at this time," said Carol Hausner, director of investor and public relations. "Based on our data, the product is biocompatible, permanent and remodeled [within the body]."

Approximately 1 million soft tissue surgical procedures, including hernia and bladder repair, are performed each year in the U.S., according to the company. Graftpatch can be used in both minimally invasive procedures, such as endoscopic surgery, and in traditional surgeries.

Organogenesis plans to manufacture Graftpatch, but is seeking a marketing partner. The company does not plan to market the product before securing a partnering agreement.

Graftpatch is the first in a line of non-living products, including a vascular graft, under development using Organogenesis' connective tissue technology.

Progress on the regulatory front is good news for a company that in 1995 and 1996 was nagged by gloomy press, including predictions that its stock would sink to single digits

"I make sometimes the analogy to the Wright brothers," said Hausner. "When you're doing something that's truly different, you are . . . left open to people saying, 'Oh, this will never work.'

"It is, of course, ironic [once] the plane has left the ground."

Apligraf is a living skin equivalent consisting of two layers. The upper layer contains human keratinocytes (the most common cell type in human epidermis), which form a well-differentiated epidermal layer. The lower dermal layer contains human skin's most common structural protein—collagen—with its most common cell type—fibroblasts.

"We are very proud to be the company that developed the first manufactured living organ to ever be approved by a major regulatory agency," said Hausner, "and we will always have that as a claim to fame." *