Recently climbed aboard at $7 ... following update is about a month old, but tells the story.
Strurza's Medical Investment Letter
Creative BioMolecules
3/26/98
Creative BioMolecules (CBMI - OTC - $8.06) shares have tumbled 22% since last Friday, due to exaggerated investor concerns over the pivotal OP-1 trial results presented at the American Academy of Orthopaedic Surgeons Conference in New Orleans. We believe that the key take-home message is that the Op-1 bone graft device met its two primary clinical endpoints, healing as many patients as autologous bone graft, and just as rapidly. While the results from the radiologic (X-ray) studies were just passable, we believe that they are sufficient to ensure FDA approval.
CBMI's partner, Stryker Medical, presented the full set of data from the pivotal 122- patient trial of Op-1 as a treatment for non-union tibial fractures. The data showed that, nine months after surgery, 80% of the Op-1 treated patients were able to bear weight on the treated limb, and experienced either no pain or only mild pain, as compared to 80% of the patients receiving autograft.
Moreover, of the eleven autografted patients requiring reoperation, six were found to have active infections of the fracture site, whereas on one out of the ten Op-1 treated patients requiring reoperation was infected. This benefit is clinically significant, as infected bone is extremely difficult to treat.
Neither the autograft nor the Op-1 treatment group achieved the expected radiographic endpoint at nine months, as defined as calcification (when viewed by X-ray) of three out of four cortices (the outside edges of the fractured bone) in 80% of all patients. After nine months, only 56% of autograft patients and 37% of Op-1 patients met these criteria for "radiographic healing", although the numbers climbed to 80% and 70%, respectively, after 24 months; we believe this reflects the difficult nature of these patients' fractures.
Orthopedic surgeons we spoke to agreed that, 1) clinical healing is more important than "radiographic healing", 2) avoiding an autologous bone graft is a key advantage, and 3) a lower incidence of infection is clinically meaningful. Consequently, we expect Stryker to file a PMA for Op-1 within the next two months, which should lead to an FDA Advisory Panel in H2'98 and approval by Q1'99. We believe that investor interest in CBMI shares will replace skepticism as these events unfold. We reiterate our Strong BUY Recommendation; our one-year target remains $16.
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