Wednesday December 17, 12:18 pm Eastern Time
Company Press Release
Technology in Wound-Healing and Artificial Skin More Advanced Than
Other Biotech Areas, Analyst Says
LOS ANGELES--(BW HealthWire)--Dec. 17, 1997--The niche industry comprised of companies in wound-healing and artificial skin ''is maturing faster than many of the better-known areas'' of biotechnology, according to a newly released research report.
Alexander K. Arrow, vice president of Wedbush Morgan Securities in Los Angeles, made this observation in a report recounting the most recent developments in wound healing and artificial skin and comparing some of the most prominent companies specializing in wound healing.
So rapid has the development in wound healing and artificial skin been that this field is now more advanced than genomics, gene therapy, combinatorial chemistry or peptide drug development, Arrow said.
Arrow's report highlights a total of 28 companies in this new industry segment.
The Wedbush Morgan analyst said the trend from fee-for-service reimbursement to capitated payment already has changed the way health care providers treat patients with skin ulcers. Under a capitated payment system, providers receive a fixed amount for treating a specified number of patients.
''The fee-for-service system encouraged providers to let ulcers occur and then treat them, since the provider simply received a payment for each ulcer treated,'' Arrow said.
''As the transition from fee-for-service to capitated reimbursement accelerates, many providers are or will soon start to take ulcer-prevention steps,'' Arrow further noted, asserting that this approach actually costs providers less than it does to heal ulcers.
Companies making wound care products are responding to this trend, Arrow said. He pointed out that at least one company, MedLogic Global Corp., is selling a protective skin barrier product to prevent ulcers from developing.
For a health care provider using this product on every bedridden ulcer patent, the cost would be less than 1 percent of the expense incurred in treating ulcers after they occur, Arrow said.
Arrow divides the market for artificial skin and wound healing products into three segments: burns and major trauma, minor lacerations and surgical incision closures, and chronic skin ulcers.
The number of patients who need treatment for burns is small and is unlikely to expand, Arrow said, concluding that he doesn't ''believe the burn market alone contains enough potential revenue for a start-up company to grow and prosper.''
The second segment of the artificial skin and wound-healing field consists of sutures used for internal and external wound closure, including planned surgeries and emergency room visits. Annual worldwide expenditures for sutures total about $1.6 billion, and this market will be impacted by biotechnology when the first two wound-closing glues become available next year, according to Arrow.
In contrast, about $7 billion is spent each year on therapy for patients with chronic skin ulcers, Arrow said.
''A skin ulcer is not as life-threatening as a large body surface area burn, but it results in a significant expense to the health care provider,'' Arrow said in his report.
''This is because current skin ulcer treatment involves frequent wound dressing changes and nursing attention over a prolonged period.''
Third-party payers ''are eager for a product that could cut a nine-month course of treatment down to a couple of weeks''
Arrow said.
The public companies described or mentioned in Arrow's report are:
Advanced Tissue Sciences (ATIS), American Home Products Corp. (NYSE:AHP - news; AHP), Baxter Healthcare (BAX),
Biodynamics International Inc. (OTC BB:BDYND - news; BDYN), BioSpecifics Corp. (BSTC), Carrington Laboratories
Inc. (Nasdaq:CARN - news; CARN), Chiron Corp. (Nasdaq:CHIR - news; CHIR), Closure Medical Corp. (Nasdaq:CLSR
- news; CLSR), Curative Health Services (CURE).
Also, Derma Sciences Inc. (Nasdaq:DSCI - news; DSCI), Fusion Medical Technologies Inc. (Nasdaq:FSON - news;
FSON), Genetic Laboratories Wound Care Inc. (OTC BB:GELW - news; GELW), Genzyme Tissue Repair (GENZL),
Human Genome Sciences (HGSI), Integra Life Sciences (IART), Johnson & Johnson (JNJ), Life Medical Sciences Inc.
(Nasdaq:CHAI - news; CHAI), LifeCell Corp. (LIFC), Magainin Pharmaceuticals (MAGN).
Also, Medtronic (MDT), Novartis (NVTSY), Organogenesis (ORG), Ortec International (ORTC), Orphan Medical
(ORPH), Procyte Corp. (PRCY), Protein Polymer Technologies (PPTI), SmithKline Beecham (SBH), 3M Corp. (MMM).
EDITORS: A copy of Dr. Arrow's report may be obtained by calling 213/688-4521.
Contact:
The Roper Co., Santa Monica, Calif.
Richard Roper, 310/393-0622
More Quotes
and News:
American Home Products Corp (NYSE:AHP - news)
Biodynamics International Inc (OTC BB:BDYND - news)
Carrington Laboratories Inc (Nasdaq:CARN - news)
Chiron Corp (Nasdaq:CHIR - news)
Closure Medical Corp (Nasdaq:CLSR - news)
Derma Sciences Inc (Nasdaq:DSCI - news)
Fusion Medical Technologies Inc (Nasdaq:FSON - news)
Genetic Laboratories Wound Care Inc (OTC BB:GELW - news)
Life Medical Sciences Inc (Nasdaq:CHAI - news) |
