Cartilage Repair - Replacing Joint Arthroplasty?

The horse drawn carriage was replaced by the automobile. The slide rule was replaced by the calculator. Could knee replacement/reconstruction ever be replaced by cartilage repair? The idea may not be so farfetched and if the answer is ‘yes’ not everyone will be celebrating. In this game of technology improvement there are always going to be winners and losers.

So who wouldn’t welcome such an innovation? It’s what we’ve been hoping for all along, right? There aren’t many mathematicians who would prefer the use of a slide rule to that handy little calculator. We would further assume that the development of the calculator is not good news for the Pickett Slide Rule company.

What is interesting about the comparison of these technologies is the manner in which each of them affected business. Producers of carriages and slide rules didn’t immediately see the threat of the automobile or the calculator because of the limitations of these new technologies. In their early stages neither had been perfected and the cost was more than any average consumer could feasibly pay. But as time passed the problems were eventually corrected and the incumbent industries found themselves being rocked back on their heels. Some of the larger carriage manufacturers attempted to produce cars, but they lacked the engineering capabilities to successfully make the transition.

Are there carriage manufacturers within the orthopedic industry? The answer to that question is, we think, ‘yes’! However, pinpointing who they are is not as straightforward as our examples from the past.

The Present

Currently, physicians have a number of options to treat the knee when cartilage damage is present. These treatments range from pain relief to total knee replacement. In the osteoarthritic (OA) knee, once a patient’s OA has progressed to the point where therapy and mild pain relievers are no longer effective, the options begin to become more invasive. One treatment developed in answer to this problem is the synovial injection, which have provided an intermediary step for the patient and in essence, time, before taking treatment to the next level. These products include:

• Hyalgan®  (sanofi-aventis)
• Synvisc® (Genzyme Corporation)
• Supartz®  (Smith & Nephew)
• Orthovisc® (Anika Therapeutics, Inc., distributed by DePuy Mitek, Inc.)
• Euflexxa™ (Ferring Pharmaceuticals Inc.)

The challenge of these treatments is twofold. First, the sole purpose of these injections has been to treat pain and pain only. By design these treatments have no effect on the root of the problem—deteriorated cartilage. Yet some patients have still opted for these forms of treatment because, at the very least, they may provide more time before patients have to pursue more radical options. The second issue is that, while the treatment may provide more time, there is a good chance that it will not.  

Questions of efficacy have surrounded these products since they first came to market in 1997. Recent PearlDiver research shows that 46.3% of patients receiving an injection will require further treatment to their knee within a three and a half year period.

Efficacy issues aside, in many cases of damaged cartilage pain relief alone is not enough. Repair options in such cases include arthroscopic chondroplasty, microfracture, osteochondral transfer systems, and autologous chondrocyte implantation. Each of these procedures has its benefits but also problems.

• Arthroscopic chondroplasty only cleans up the damaged cartilage to prevent further damage and inflammation.
• Osteochondral transfer systems can potentially do as much damage as repair.
• Microfracture brings blood to the damaged area, but the new cartilage that will form is fibrous, not the hyaluronic cartilage necessary to sustain years of continuous wear.

At one point Carticel®, a form of autologous chondrocyte implantation marketed by the Genzyme Corporation, was the first true cartilage repair treatment approved by the FDA. However the quality of the cartilage (fibrous) has limited its applications. Among Carticel’s critics is Kevin R. Stone, M.D., of the Stone Clinic, who has characterized the product as “a non-commercially viable procedure from day one.”  

Implanting Carticel requires an open surgical procedure, something that is not in wide favor among sports medicine surgeons. Dr. Stone has characterized it as follows: “the technique of sewing periosteum on to cartilage is difficult and not reproducible.” For many orthopedic surgeons it was never clear that putting the progenitor cells and growth factors they can provide in place without access to blood  was the logical method to grow cartilage. 

Ultimately there developed two principal drawbacks to Carticel which have kept its use limited to very specific patient populations. Carticel could not be used for osteoarthritis indications and it remains a very expensive treatment option. Between the doctor’s fee and the cost of Genzyme’s services, a patient can expect to be charged on average $26,950. By comparison, microfracture, the second most expensive procedure, averages $4,316, followed by mosaicplasty at $3,935, and chondroplasty, $2,638. Despite these shortcomings, Carticel remains the only FDA-approved cartilage repair technology in the U.S. and shows slow revenue growth each year.

The Future

Building on the Carticel foundation two companies, TiGenix and Histogenics, are storming ahead. Their respective products, ChondroCelect® and NeoCart®, follow the same overall procedure as Carticel. A biopsy is taken, the sample sent to the lab where it is cultured to expand the number of cells, and the resulting new tissue is implanted back in the patient. The key difference is technology in pursuit of a more effective treatment. ChondroCelect utilizes a proprietary genetic marker technology to improve the quality of the cartilage formed, while NeoCart utilizes a three-dimensional collagen scaffolding. Thus far TiGenix’s clinical trials have been able to demonstrate a significant improvement over the current standard—microfracture—throughout a three-year period.

Another cartilage repair technology being developed by ISTO Technologies in partnership with Zimmer Inc., is in phase I/II clinical trials. The product, DeNovo, utilizes juvenile cartilage cells in the form of a scaffold-free implant that is glued into place. Aside from the potential of the juvenile cells to improve the quality of cartilage regeneration, the key element of this design is the number of steps required to perform the cartilage repair. Unlike the products previously mentioned, DeNovo will be a one-step procedure. No more biopsies. No more waiting four to six weeks on the lab. 

Another approach, which relies on adult stem cells injected directly into the joint, is being developed by two firms: the Australian company Mesoblast for the repair of articular cartilage, and by Osiris Therapeutics for meniscal cartilage repair. Rather than performing an open procedure to insert an implant, an arthroscopic approach is taken, injecting the stem cells into the synovial cavity, which thus far has shown promise to enhance cartilage regeneration.

Who Wins, Who Loses

When envisioning a future with cartilage repair, there is not just one form of vulnerable treatment, but many. This is because of one simple reason; the current methods are not producing the results patients want. While these procedures do help, there are still long-term problems left unsolved. Stepping back to our original analogy, did carriages provide transportation? Of course they did, but with many limitations. The same is true for the slide rule. It would get the job done, but it was time consuming and cumbersome in comparison to the calculator. In light of the progress made by such firms as TiGenix, Histogenix, ISTO, Osiris, and Mesoblast, could the orthopedic industry finds itself in the same position as manufacturers of carriages and slide rules not so many years ago?

A bigger question may be, supposing the methods of cartilage repair currently undergoing trials are proven to be substantially more effective than Carticel, what does it mean? Table 1 below shows the market for current cartilage damage not including osteoarthritis. PearlDiver Patient Records Database estimates that during 2007 nearly 3.9 million distinct patients were diagnosed with one or more forms of cartilage damage. Of those patients, over 1.6 million went on to have one or multiple procedures to treat the damage. The resulting procedures for these patients had their limitations. In comparison to our calculator analogy, that is 1.6 million patients who would have happily thrown away their slide rule for a new calculator.

Table 1: U.S. Patients with Cartilage Damage Under the Age of 65

From the clinical trial data released to date, it is reasonable to expect these new products will help the growth of cartilage more effectively than their predecessors, and in doing so change the treatment paradigm for osteoarthritis stemming from any of the indications in Table 1. Evidence of this has been demonstrated in the phase III clinical trials of TiGenix’s ChondroCelect® , published in the February 2008 issue of the American Journal of Sports medicine, demonstrating cartilage re-growth superior to microfracture procedures, and also in Mesoblast’s trials which have reported sustained cartilage re-growth of knee cartilage in post-menopausal osteoarthritic patients for at least six months in duration. Data from Osiris Therapeutics’ phase I/II trail also found that patients receiving synovial injections were 3.5 times more likely to experience continued degeneration as a result of osteoarthritis in comparison to patients receiving their latest cartilage repair product, Chondrogen™. 

Certainly a vulnerable product category to successful cartilage repair would be synovial fluid injections, which we map out in Table 2.

Table 2: U.S. Patients Receiving Synovial Injections

Over 6.5 million U.S. patients were, we estimate, diagnosed with osteoarthritis in the knee in 2007, as shown in Table 3.

Table 3: U.S. Patients Diagnosed with Osteoarthritis of the Knee

Should a new and potentially more successful form of cartilage repair be approved for commercial sale by the FDA, the implication for patients is astounding. We estimate that in 2007 nearly 600,000 total knee replacement procedures were performed in the U.S. According to procedure numbers published by the American Academy of Orthopaedic Surgeons’ Facts on Knee Replacements , since the year 2000, the number total knee replacements in the U.S. has increased at a minimum 9% year-over-year. Only in 2001 and 2003 did the percentage growth rates dip below double digits. Should the number of total knee replacements continue to grow even at a historically lower annual rate of 5.5%, by 2010 the number of total knee replacement procedures will nearly reach 700,000 in the U.S. 

Broadly applicable and effective cartilage repair technology could well have a disruptive effect on this industry that produced domestic knee surgery implant revenues of $3.259 billion in 2007.