ORTH.CN: IND for Ortho-R

By John Vandermosten, CFA

CNSX:ORTH.CN | OTC:ORTIF

READ THE LATEST ORTH.CN RESEARCH REPORT

Submission of Investigational New Drug Application for Ortho-R

On April 6, 2021, Ortho Regenerative Technologies ORTH ORTIF announced that it had submitted an Investigational New Drug (IND) application to the FDA for the initiation of a Phase I/II clinical trial for its lead candidate, Ortho-R. Ortho is an early stage biomedical technology company that is approaching clinical trials. Ortho's key technology is RESTORE, a proprietary lyophilized chitosan based admixture that is stable at room temperature and leverages the patient's autologous platelet-rich plasma to facilitate the healing and regeneration of injured tissue. Application fits seamlessly into rotator cuff surgical protocol, and takes only minutes. The company's lead candidate, Ortho-R, which applies the company's proprietary RESTORE technology to rotator cuff tears, has been tried in large-animal models, and the company just submitted an IND application to the FDA to progress Ortho-R into the clinic.

IND Application

The IND was submitted on April 5, and assuming no questions from the FDA, the application may be cleared by May 5. The IND application is submitted and a receipt, through an IND acknowledgement letter, is provided along with the date that the FDA received it. From the receipt date, the FDA has 30 days to notify sponsor of a Clinical Hold before trials may automatically begin. Upon IND clearance, drug shipments may begin.

With the IND, a company that is evaluating a not-yet-approved drug can distribute the drug across state lines, to clinical sites where the trials are being conducted. Ortho has completed the application step to start its Phase I/II trial that will assess safety and efficacy in a controlled population.

Ortho-R was designated a device, drug and biologic combination product by the FDA and its approval will be overseen by the Center for Biologics Evaluation and Research. Ortho's application will go in front of several FDA bodies because of this multiple designation. Assuming no questions from the FDA, we anticipate the trial starting in May and the first patient treated by June assuming that all questions from the agency can be satisfied in a timely manner.

Phase I/II trial

Following clearance of the IND, Ortho will begin its in-human trial. The company is currently in dialogue with 12-16 centers that may be considered for participation. Next steps are to negotiate with the sites, obtain ethical review board consent and then begin identifying patients. Under advisement from the FDA, the first three patients will be treated in the same center with 48 hour separation to ensure there are no safety issues. The trial will be a prospective, randomized, controlled and blinded study to evaluate safety and efficacy of Ortho-R. Ortho-R will be administered with standard-of-care surgery, and will be compared against surgery alone. The study will target enrollment of 78 patients at 6-10 clinical sites in the US. Enrollment is expected to commence in 2Q:21.

Rotator Cuff Tears

Causes, Incidence and Prevalence

Rotator cuff injury is one of the most common tendon injuries seen and treated in adults and, in contrast to an acute injury such as one sustained in sports, age is the primary driving factor. Rotator cuff tear is typically a degenerative and progressive process. Acute, complete tears can occur as well and usually in younger patients, but it is the micro-trauma that causes tendon degeneration with insufficient healing that leads to degenerative tears later in life. As the tendon degenerates, less and less force is required to provoke a tear that becomes more and more likely. Potential causes include everyday accidents such as falling and lifting, sports such as pitching and swimming and occupations such as painting. Abnormalities in the rotator cuff ranged from 9.7% in those aged 20 and younger compared to 62% in patients 80 years old and older (1). Unilateral pain increases the risk of a rotator cuff tear in the opposite shoulder. Beyond age 66, the likelihood of bilateral tears rises to 50%. Smoking is a known risk factor as is family history. Poor posture has also been shown to be a predictor of rotator cuff ailment. 65.8% of patients with kyphotic-lordotic postures, 54.3% with flat-back postures and 48.9% with sway-back postures had tears while only 2.9% of patients with ideal alignment had tears. Additional risk factors include trauma, hypercholesterolemia and occupations or activities with significant overhead activity.

Partial tears are a risk for further tears and are highly correlated with age, tear size and location. The larger the tear, the more susceptible it is to even greater separation and as tears enlarge, symptoms become worse. Symptoms include dull or deep ache in the shoulder, disturbed sleep, difficulty combing hair or reaching behind the back and arm weakness (2). Anterior tears are more likely to progress.

The estimation of the prevalence of rotator cuff injury varies. A prospective study on 411 asymptomatic patients' shoulders found a 23% prevalence of tears with those in their 70s and 80s showing tears in 31% and 51% of evaluated patients, respectively (3). An Austrian study (4) examining 212 asymptomatic individuals age 65 and older demonstrated 6% prevalence of full-thickness tears and a Norwegian study of 420 asymptomatic individuals age 50-79 found only 7.6% full thickness tears (5). The estimates differ based on the severity of the tear. According to the US Census, there were approximately 73.4 million people in the US age 60 and older in 2019. Applying an estimated 30% prevalence, approximately at least 22 million people could suffer from tears, and 4.4 million with full thickness tears in the US, not counting younger populations. Approximately two million people per year visit their doctor in the US due to a rotator cuff problem (6). In 2006, there were an estimated 272,148 rotator cuff repairs, an increase of 141% since 1996 (7). A simple linear extrapolation places the 2020 estimate at approximately 550,000. We examine additional sources such as Pearl Diver HealthCare Research that estimates 400,000 RCT surgeries per year and iData Research that finds 460,000 RCT surgeries per year.

Standard of Care

Treatment depends on age of patient, their functional demands of the rotator cuff and the disease's progression (acute vs chronic). Patients under 40 with complete tears are recommended surgery followed by rehabilitation. Arthroscopic or open surgery can be performed and aims to install anchors into the humerus, and suture the torn supraspinatus tendon to the anchor, placing the tendon in physical proximity to its original insertion site. Arthroscopic surgery, also known as ‘keyhole surgery,' minimizes surgical damage to the tissue. Small incisions are made and through these openings, special rod-like cameras and tools enable the surgeon a view and work on the injury. The sutures are applied to the tear and if necessary, holes are drilled, and suture anchors are installed in the humerus. The sutures are looped through the anchors and through the tendon. After the procedure, the shoulder is placed in a sling. Patients typically return home on the same day of the surgery. Unfortunately, surgical repairs fail to heal in 20-95% of patients. Success depends on age, tear size, smoking, time of repair, tendon quality, muscle quality, healing response, surgical treatments (8), retraction severity of the torn tendon and atrophy of the muscle. The greater the size of the tear, the greater the failure rate. This low rate of success highlights the need for continued research and development of new therapies to address this indication.

Ortho-R

Chitosan

The basis of RESTORE is freeze-dried (lyophilized) chitosan. Chitosan is a biopolymer found in nature and is known to be beneficial for wound healing, having effects on blood clotting and recruitment of repair cells in wounds. Chitosan causes blood to rapidly clot, but also serves a role in stabilizing the blood clot mechanically, acting as a scaffold to maintain clot volume and increase clot adhesion to tissue. Researched applications are diverse and include chitosan employed as a biomaterial, in nanoparticles for gene and drug delivery and as an antimicrobial. It is the primary component in RESTORE, along with a lyoprotectant and a clot activator. Commercial chitosan is typically manufactured through the deacetylation of the parent polymer, chitin (9).

Ortho RTI's sole candidate, Ortho-R, is derived from Ortho RTI's RESTORE technology. While the company has highlighted other designations of Ortho-R that are intended for use in different sites, they are composed of the same proprietary biopolymer derived from chitosan. Ortho RTI's candidate can be applied to various common tear-injuries in the body such as those in the rotator cuff, meniscus, cartilage and joints affected by osteoarthritis. The product is a powder containing lyophilized chitosan, a lyoprotectant and clot activator. This powder is then mixed with a wet biologic, which is the patient's own PRP, causing it to coagulate. The combina¬tion is shaken and the mixture applied by the surgeon on and around the repaired site. Within minutes, the implant takes on a thickened consistency and the surgeon can complete the operation.

The process of mixing and applying Ortho-R takes only minutes, does not interrupt surgery and has been shown to be ef¬fective in tissue repair in vivo. Surgery uses mechanical means of repairing the tissue, using sutures, anchors and/ or staples. In the case of a rotator cuff tear, when the two halves of the tear are brought together by mechani¬cal means, the body must complete the healing process by bridging the gap. RESTORE leverages biology to improve the healing process by combining a biocompatible polymer matrix with a regenerative factor to enhance healing. The Ortho-R material is thick by design, as the implant needs to remain localized to the injured tissue while it continues to supply growth factors critical to healing. Ortho RTI has developed and optimized the components of RESTORE to meet the specific therapeutic and material properties and has a shelf life of over two years. RESTORE has been optimized for solubility in the patient's PRP and has desirable mucoadhesive and residence properties. It is a combination product that has been classified by the FDA as a drug/biologic that is delivered through an accessory device.

Summary

Ortho has submitted its IND application to the FDA for Phase I/II trial of Ortho-R. This is a milestone in the company's history as its lead candidate fast approaches the clinic. Ortho will wait approximately 30 days as the FDA considers the application. After any questions are answered, and the IND is cleared, the trial may begin. The trial is a prospective, randomized, controlled and blinded study that will evaluate the safety and efficacy of Ortho-R, and is targeting 78 patients enrolled at several clinical sites across the US. Refer to our latest report for price target and further details on Ortho's financial and operational status.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer HERE.

________________________

1. Codding, J.L., Keener, J.D. Natural History of Degenerative Rotator Cuff Tears. Curr Rev Musculoskelet Med. 2018 Mar; 11(1): 77–85.

2. https://www.mayoclinic.org/diseases-conditions/rotator-cuff-injury/symptoms-causes/syc-20350225

3. Tempelhof S, Rupp S, Seil R. Age-related prevalence of rotator cuff tears in asymptomatic shoulders. J Shoulder Elbow Surg. 1999 Jul-Aug;8(4):296-9.

4. Fehringer EV, Sun J, VanOeveren LS, Keller BK, Matsen FA. Full-thickness rotator cuff tear prevalence and correlation with function and co-morbidities in patients sixty-five years and older. J Shoulder Elbow Surg. 2008 Nov-Dec;17(6):881-5.

5. Schibany N, Zehetgruber H, Kainberger F, Wurnig C, Ba-Ssalamah A, Herneth AM, Lang T, Gruber D, Breitenseher MJ. Rotator cuff tears in asymptomatic individuals: a clinical and ultrasonographic screening study. Eur J Radiol. 2004 Sep;51(3):263-8.

6. https://orthoinfo.aaos.org/en/diseases--conditions/rotator-cuff-tears

7. Colvin, A. C., Egorova, N., Harrison, A. K., Moskowitz, A., & Flatow, E. L. (2012). National trends in rotator cuff repair. The Journal of bone and joint surgery. American volume, 94(3), 227–233. https://doi.org/10.2106/JBJS.J.00739

8. This is according to Deprés-tremblay et al. 2016, work supported by Canadian Institutes of Helath Research and Ortho RTI.

9. de Queiroz Antonino, R., Lia Fook, B., de Oliveira Lima, V. A., de Farias Rached, R. Í., Lima, E., da Silva Lima, R. J., Peniche Covas, C. A., & Lia Fook, M. V. (2017). Preparation and Characterization of Chitosan Obtained from Shells of Shrimp (Litopenaeus vannamei Boone). Marine drugs, 15(5), 141. https://doi.org/10.3390/md15050141