In a few short weeks, Pluristem Therapeutics (NASDAQ:PSTI) will announce landmark data using its PLX cell therapy on gluteal muscle injury that results from hip replacement surgery. The event, hosted by the company and joined by its top investigator, will take place on January 21, 2014, at the Tel Aviv Stock Exchange where shares of Pluristem also trade. At that time, results from a Phase I/II study started last year will be released.
Pluristem began first-in-human studies of PLX cells in this type of muscle damage in the summer of 2012 at the Paul Ehrlich-Institut, an arm of Germany's venerable Federal Ministry of Health that acts in capacity as our FDA. Clinical trials followed a traditional path - randomized, double blind and placebo controlled - to test safety and efficacy, with two doses of PLX cells given intramuscularly to approximately 18 patients about to undergo total hip replacement surgery. Endpoints at six months were the ability of gluteal muscles to forcefully contract, and structural integrity of gluteal tissue.
Total hip replacement, common in aging populations around the world, involves surgical trauma to one of the three gluteus muscles, depending on the procedure. Investigation into the extent of post-surgical effects is fairly recent, and has focused on reduced range of motion or instability of the hip implant. Defects of leg and hip tendons and muscle atrophy have been frequently observed.
With osteoporosis as the primary culprit, there are roughly 300,000 artificial hips implanted every year in the US alone, expected to double over the next decade. As people live longer and younger patients get surgery, many will undergo an additional operation within 10 years to replace worn out parts. MediPoint reports that the size of the global hip replacement market across 10 countries including the US, the UK, those in southern and northern Europe, Japan, Brazil, India and China was estimated at $6.2 billion in 2012, expected to grow to $7.1 billion in 2019 for the reasons cited above. Our country is predicted to be the biggest consumer of the procedure, with potential for developing countries, by virtue of their growing middle class, to catch up quickly.
Transparency Market Research recently published a report stating that orthobiologics, non-traditional materials used by surgeons to facilitate healing in bone and muscle tissue, is a growth industry with a value standing at $3.7 billion today and projected to rise to $5.5 billion in the next five years at a compounded annual rate of 5.9%. This puts Pluristem's PLX cells, protecting and rejuvenating gluteal tissue before the ravages of hip surgery take hold, in the right place at a very beneficial time.
Demographics and the desire for people to stay active longer has resulted in robust sales for makers of hip implants. Stryker Corp. (NYSE:SYK) showed 2012 revenue of $1.2 billion in hip prosthetics alone, which has consistently accounted for over 30% of total sales since 2010. Another top orthopedic medical device manufacturer, Zimmer Holdings (NYSE:ZMH), brought in $1.3 billion in hip replacement device sales in 2012, with a compound annual growth rate in the higher single digits over the last several years.
However popular, hip replacements have problems. Even with new implants, parts slip out of place, rub against one another or simply fail, causing devastating pain or, at the very least, a high degree of discomfort. The industry is rife with litigation amidst product recalls. Zimmer suspended sales of its wide-selling Durom hip joint replacement cup in 2008, prompting a wave of lawsuits. DePuy Orthopaedics, a Johnson & Johnson (NYSE:JNJ) company, is contending with the recall of over 93,000 of its ASR Hip Replacement product. A new report from the British Medical Journal shows almost 80% of hip implants have scant evidence of safety or effectiveness.
Replacement surgery is necessary in these cases and more procedures mean more opportunities for PLX cell therapy to treat potentially damaged tissue. Moreover, orthopedic surgeons vigilant of malpractice are likely to embrace new techniques that circumvent problems, including gluteal muscle injury.
Pluristem's platform technology is moving into a huge, new indication - muscle regeneration in hip replacement surgery, and this upcoming data will be the first time PLX cells are used in muscle injury. Success could mean an entrance into sports medicine, a special branch of therapy with focus on the diagnosis, treatment and prevention of injuries resulting from athletic, exercise or recreational activities and purported to be a $21 billion industry growing faster than US GNP. The company is already exploring this in rotator cuff disorders, under a Phase I trial to check safety and efficacy with intramuscular injections of their therapy in 30 patients.
The concept of stem cells and tissue regeneration go hand in hand, thanks to research devoted to heart failure started in the UK during the 1980s. Good news from Pluristem would deliver to investors what they expect from this novel therapy, greatly enhancing the company's value. Risks are clear, however. Data may not be statistically strong and the company would have to re-evaluate dosages or perhaps the entire clinical trial design.
Pluristem is rapidly pursuing a high growth market with hip replacement muscle injury, one where orthopedic doctors who deliver reliable revenue streams to hospitals have a strong voice when implementing new technologies. The opportunity to enter sports medicine is a natural progression, if all goes well clinically. The company has demographics in its favor and with healthcare economics in flux, a new and less invasive treatment with PLX cells to offset gluteal damage in one of the country's most common surgical procedures should be extremely attractive for both insurers and patients.