BRIDGE TECHNOLOGY GROUP LLC INITIATES RESEARCH
COVERAGE ON ORTEC INTERNATIONAL, INC. WITH A BUY RECOMMENDATION
Visit www.BridgeNYC.com for Full Text of Report
New York, NY, March 26, 1999 -- Bridge Technology Group LLC announced today that it has initiated coverage of Ortec International, Inc. (Nasdaq: ORTC) with a BUY recommendation. Ortec International is developing a unique wound healing product called Composite Cultured Skin. The full text of the report is available at www.BridgeNYC.com.
Excerpts from the report follow:
Ortec International, Inc. (“ORTC”) is a development-stage tissue-engineering company developing and commercializing a proprietary skin regeneration product it calls Composite Cultured Skin (“CCS”). CCS is a permeable, bi-layered matrix that stimulates a unique growth environment for both dermal and epidermal skin cells. CCS is currently in clinical trials for treatment of donor site wounds and venous skin ulcers, and has completed a clinical trial under an Investigator's IDE using CCS for the treatment of chronic dermal skin ulcers in Epidermolysis Bullosa (EB) patients. We believe CCS may have wide commercial applications for the treatment of burns and diabetic skin ulcers, as well as for reconstructive and cosmetic surgery. The Company intends to file a Humanitarian Device Exemption (HDE) and launch CCS for the Epidermolysis Bullosa this year. We are initiating coverage on ORTC with a BUY rating, and recommend purchase by investors tolerant of the risks associated with micro-cap and small-cap equity investments.
Composite Cultured Skin: CCS is an engineered human skin-like dressing that is produced to mimic the human skin. CCS is composed of a bi-layered bovine collagen sponge seeded with human skin cells. Human epidermal cells (keratinocytes) and dermal cells (fibroblasts) are harvested from the foreskin of neonates, and cultured into a large number of individual, identical cells. Prior to seeding the collagen sponge, these cells are tested and screened according to FDA guidelines to ensure that they are free from bacterial contaminants, viruses and other pathogens. Then, the dermal fibroblast cells are applied to a porous composite matrix (to form a dermal layer matrix), and the epidermal keratinocytes are grown on a separate, non-porous outer layer of collagen. The two layers are then incubated to allow the cells to multiply, and the fibroblasts to permeate the porous collagen matrix. The resulting bi-layered product, which can be supplied in a variety of shapes and sizes, replicates the structure of human skin, with an outer epidermal layer and an inner dermal layer that is integrated into the collagen matrix.
Results from Pilot Donor Site Wound Study: ORTC recently announced that the results of a pilot donor site trial of CCS will be presented this week at the American Burn Association (ABA) conference in Orlando, Florida. The results will be presented by Dr. Joseph Still, M.D., Director of the Burn Center at the Columbia Augusta Medical Center. Donor site wounds are created when healthy skin is taken from an undamaged part of a burn victim's body and transplanted onto the existing wound site, thereby creating a “donor site” wound. As reflected in this week's releases, it is anticipated that the formal presentation of results will show that the CCS product significantly accelerated wound closure in donor sites, when compared to the current standard of care.
Regulatory/Clinical Strategy: CCS has concluded a 12-patient trial for EB, and is currently in trials for donor site wounds and venous stasis ulcers. The Company intends to initiate trials for diabetic foot ulcers indications in 3Q99. With respect to the EB indication, management intends to file for a Humanitarian Device Exemption (HDE) with the FDA in the latter half of 1999, and expects to gain FDA approval and launch CCS for this indication by year-end. Although the EB market is quite small, ORTC plans to leverage this first indication into other larger indications. Results of CCS' use in EB patients should produce additional clinical data for future FDA filings. With respect to the donor site indication, ORTC has filed an application with the FDA to initiate a 12-center pivotal donor site study, which is to enroll approximately 75 patients followed for a six-month period. The study's primary end point is to compare time to wound closure of its CCS versus standard of care. Secondary endpoints include measurement of pain, scarring, rate of infection, time to recropping and any adverse events. ORTC believes enrollment could be completed by the end of the third quarter of 1999. Following a six-month follow-up, ORTC plans to file a pre-market approval application (PMA) with the FDA.
Relative Valuation: We believe that ORTC trades at an excessively large discount to other public companies with competing wound healing products in various stages of commercialization. For example, Organogenesis (AMEX: ORG), which currently markets a competing FDA-approved product called Apligraf, has a market capitalization of rough $360 million, compared with ORTC's market cap of approximately $60 million. We also believe it's an appropriate time for investors to revisit the entire tissue-engineering sector, as sales in this market are beginning to ramp, more and more clinical data is showing the efficacy and cost-effectiveness of these products, and reimbursement issues are being addressed.
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The information in this press release has been obtained from sources that Bridge Technology Group LLC believes to be reliable, but the Company does not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation by Bridge Technology Group LLC for the purchase or sale of any securities. Bridge Technology Group LLC has performed investment banking, consulting or other services for or may solicit investment banking, consulting or other business from, any company mentioned in this release. Bridge Technology Group LLC or persons associated with Bridge Technology Group LLC may at anytime be long or short any of the securities referred to herein and may make purchases or sales thereof while the Company's reports are in circulation or posted on the Bridge Technology Group LLC web site at www.BridgeNYC.com. This material, or any portion thereof, may not be reproduced without prior permission from Bridge Technology Group LLC. Bridge Technology Group LLC is not responsible for the contents of this document that is intended for electronic transmission and could be thus subjected to tampering or alteration. Copyright 1999 by Bridge Technology Group LLC. All rights reserved. |
