April 20OsteoNovus Inc., a biomedical startup that this week received federal regulatory approval for a new synthetic bone-graft material, is closing in on a deal that would jump- start sales and likely push the company to profitability before the end of the year.
For a firm that has not yet even hired sales staff, that's a good start.
"As a team, we have been able to make this into a really fantastic product," said Dr. Anand Agarwal, the company's president and chief executive officer. "[We're] getting a lot of companies excited about it and now we are excited we have the FDA clearance and we can shine in Toledo."
OsteoNovus grew out of research begun a decade ago by University of Toledo professor Sarit Bhaduri, who was examining new materials that could be used for bone-graft surgeries. Eventually he was joined in the project by Dr. Agarwal, a research professor at the university, and Vijay Goel, the university's McMaster-Gardner Endowed Chair of Orthopedic Bioengineering.
BLADE BRIEFING: Tyrel Linkhorn on OsteoNovus
The three formed OsteoNovus in 2013, locating the business in the university's LaunchPad Incubation program. The business is separate from the university, though it licenses the technology from UT and works with UT students. OsteoNovus has received some funding through the Ohio Third Frontier project and Third Frontier partner organizations, but it also has private investors.
Bone grafting is a relatively common procedure that aims to heal bones and joints damaged by injury, illness, or defect. By adding material that effectively serves as a bridge for bone cells, surgeons can encourage new bone growth.
Generally, doctors have two options for grafting. They can use natural bone culled from the patient herself or a cadaver or they can use one of the synthetic materials on the market.
While natural bone works well, collecting it from a patient subjects them to a second surgical location, raising costs and adding an additional recovery site. Dr. Agarwal, himself an orthopaedic surgeon, said doctors are increasingly favoring synthetic grafts for those reasons. Even so, he said, that hasn't been a perfect option.
"Up till now, there has not been a very effective synthetic bone graft," he said. "There is still innovation going on. We are a step further in making a better synthetic bone graft than what there is in the market."
The big selling point for OsteoNovus is that its material will dissolve away, leaving only bone. Other synthetic materials, officials said, remain in the body indefinitely which is not the intention. Bone grafts are meant to encourage natural bone growth, not be medical implants.
"No company has a complete portfolio until they have a product like this," Mr. Goel said. "Every company is looking for a product similar to what we are making."
Because negotiations are not yet finalized, Dr. Agarwal couldn't identify the firm with which his company is dealing. However, he said it was a publicly traded health care company that has revenues in excess of $100 million. The company, Dr. Agarwal said, wants OsteoNovus to provide product it can sell under private label.
The deal wouldn't be exclusive, meaning OsteoNovus could sell to other companies or direct to hospitals.
Brian Schlossberg, director of research and development for OsteoNovus, said added benefits of the company's product is that it's easier to work with than existing synthetics and that it can be manufactured much more quickly.
OsteoNovus is doing all of its manufacturing in Toledo, and officials say they should be able to supply demand from their current site in the incubator at 1510 N. Westwood Ave. for at least the next few years. But the facility looks more like a laboratory than a factory.
"We've built a manufacturing space which is basically like an operating room," Mr. Schlossberg said. "It controls the amount of particles in the area. We can control the amount of bacteria that are in the room and what types of bacteria are in the room."
The company has nine employees, though officials anticipate that will grow.
Dr. Agarwal is also president and CEO of Spinal Balance Inc., which was granted FDA approval for a spinal-fusion device in 2015. The system allows surgeons to implant screws without ever touching them, making for a more sterile environment.
Contact Tyrel Linkhorn at firstname.lastname@example.org or 419-724-6134.
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