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Tissue Regenix takes pole position in regeneration game

Plenty of ageing ex-sportsmen would like nothing more than new bit of cartilage to ease an aching knee, but that could be just the start of a whole range of new body parts Tissue Regenix may be able to supply using its new cell washing technology. 

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Anyone with a knee or heart problem should be watching developments at Tissue Regenix (LON:TRX) very closely.

The York-based firm is at the cutting edge of developing ways to swap worn out or damaged body parts with replacements grown in a lab or, in Tissue’s case, taken from a human donor or animal.

Tissue Regenix’s speciality is a technology called decellularisation or dCell for short.

Very simply, this patented process takes tissue from another source, ie a human donor or an animal,  usually a pig, washes and treats it to remove any trace of the donor’s characteristics  or DNA, at which point it can be re-used in a human body.

One of the major advantages of the process is that, critically, it leaves the structure of the tissue- or the scaffold – intact.

The human body then repopulates the new skin or organ with the recipient’s own DNA, solving the issue of possible rejection.

According to Antony Odell, Tissue’s chief executive, some vascular replacements integrated so well in trials that it was difficult for the surgeons to find them again. 

It is a potentially ground-breaking technology, something that has not been lost on the City’s investment community, which gave the firm a ringing endorsement before Christmas when it raised £25 million through a placing.

It was a significant amount of money for the firm to pull in at such an early stage of its development. However, as Tissue Regenix’s products are classified as medical devices, they are subject to a faster, less costly and generally far less risk strewn regulatory pathway than pharmaceutical or biological products. 

“The first product came out of Leeds in 2008, was in human beings in 2009 and was approved by 2010,” Odell adds.

The company is already working on heart valves, skin grafts, vascular and cartilage implants, but longer term the process could be expanded to include more complex organs such as nerves and the liver.

With an ageing western population, analysts estimate this replacement parts market is set to expand in total eventually to upwards of US$20 billion. 

Broker Panmure Gordon also suggests the dCell process offers the real possibility of off-the–shelf body parts in the not too distant future.

Some of Tissue’s development work is undertaken in Brazil, where the company has built on close links forged by Leeds University, which initially discovered the dCell technology.

Some 140 patients in Brazil have already been fitted with replacement heart valves treated using the dCell process, while between 50-60 patients have received vascular patches.

This has given the company five year’s worth of data that according to Odell shows its dCell treated valves outperformed cryopreserved valves, the current industry standard for heart valves.

Pre-clinical work on new products in Brazil is also far cheaper and far quicker, he says.

The “best thing is that we have surgeons doing it not technicians,” says Odell, who adds that surgical techniques do not have to change with its process.

Professor Francisco da Costa one of the leading heart surgeons in Brazil, did much of the development work for the dCell-treated heart valve.

Because of the regenerative nature of dCell process, Professor da Costa  was able to put heart valves into all ages from very small children to elderly people of seventy.

“The beauty of this technology is that it becomes a living bit of you.” said Odell.

This gives a considerable advantage over rival tissue washing technologies where the heavy use of chemicals effectively means the tissue is “dead” and can’t grow.

That doesn’t happen with the dCell process.

“Once you’ve washed the cells and DNA out, all you have is matrix, which is like a sponge full of holes and interconnecting channels. This matrix is the thing we sell.

The great thing about this matrix is that it can be sold like a piece of plastic. It can be put on shelf at room temperature for a year and it survives and doesn’t degrade.

The exciting part is when it goes back into people. The process preserves the mechanical and biological context as well, so when it goes back into a person’s body their own cells recognise it and know what they have to do to repopulate the matrix.” 

What the original developers of the process did, he says, was to combine biology with engineering, something that increasing numbers of people within the medical industry see as the way forward for biolological substitutes.

The next product due to launch is a cartilage replacement for the knee, while the £25 million raised last year will fund developments in new areas such as blood vessels replacements, skin patches and ligaments.

The money also means that rather than looking at one product at a time, Tissue Regenix can develop products in tandem.

Future revenue streams are likely to include licensing the technology to third parties such as human tissue banks, which are very heavily regulated in Europe but can operate more freely in the US.

The company also has a number of research collaborations. It works with NHSBT, the agency responsible for transplant services across England and Wales with a chronic wounds trial under way in Manchester.

While the early evidence appears impressive, Tissue Regenix remains at an early stage of its development.

Brokers tentatively suggest sales could reach £60 million by 2020, though break-even is unlikely before 2017 at the earliest.

Before then, however, it is also possible Tissue will attract the attention of a larger pharma group, especially as these giants are warming to the commercial possibilities of organ and skin replacements.

Odell concedes the giants of the industry have got very interested in Tissue’s space as a quick route to recycle some of their cash piles and get revenues.

Shire and private equity group Apax have made significant acquisitions in the regenerative medicine market recently.

This month, for example, Shire agreed to acquire  Pervasis to follow last June’s US$750 million purchase of regenerative group Advanced BioHealing.

If someone did come calling, Odell adds it is more likely it would sell a part of the business such as cardio or vascular as he says very few of the large medical device companies address all of its business segments.

Tissue Regenix also seemingly has the management team on board to deal with any advances. 

Executive chairman John Samuel is a veteran of Molnlycke Health Care and Apax, while Odell’s previous roles include stints at Johnson & Johnson and Fresenius.

But Odell says that a deal is not the company’s preferred route nor it will go out to look for a partner. 

“If you partner early, you give away far too much. Now we have money we don’t need to do this.”

We want to build the value of the company itself, he says, adding that the UK lacks a substantial player in a new industry.

“Bio-engineering is the future and where medicine is going. So why can’t it be Tissue Regenix?”

Quick facts: Tissue Regenix Group PLC

Price: 1.104 GBX

AIM:TRX
Market: AIM
Market Cap: £12.94 m
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