Collagen Solutions Plc (LON:COS) is a biomaterials company developing and manufacturing medical grade collagen components for use in medical devices, research, and regenerative medicine. A number of investment initiatives have been introduced recently to accelerate the rate of growth, including global commercial infrastructure and development of a pipeline of finished medical devices, the first of which will be ChondroMimetic for repair of small cartilage lesions. In June 2017, COS embarked upon an 8-year (average) follow-up study of patients originally implanted with the device in 2009-10. The last patient has now been reassessed.
Strategy: Management has embarked on an investment strategy through a series of initiatives to increase the growth opportunities. This strategy is moving COS from a reliable quality collagen supplier to one that also has proprietary products that will move it into profitability, and cash generative, at a faster pace.
ChondroMimetic: Best described as a clever bi-layered and easy to use sponge that allows the regeneration of cartilage and bone. The product has good provenance having received CE Mark in 2008 and implanted into ca.200 patients. However, for reasons prior to COS’s ownership the CE Mark lapsed.
Patient re-evaluation: As part of the process of re-applying for CE Mark, COS has undertaken an extension study to reassess 15/17 patients from the original trial in 2009-10. This will provide unprecedented 8-year follow-up data about the quality of the cartilage repair and support CE Mark and marketing material.
Next steps: The last patient has now been rescanned. All the data has to be compiled, audited and analysed for completion of a Clinical Study Report. This will form part of the package for submission to the regulators for CE Mark around the end of 2017. It will also assist in commercial partner negotiations.
Investment summary: ChondroMimetic fulfils Collagen Solutions plc’s stated strategy to move further up the value chain. The 8-year data will significantly differentiate it from competing therapies, and with the last patient now assessed the enrolment phase has been de-risked. In order to maximise returns, COS will need to sign a strong commercial partner in readiness for launch around the middle of 2018, and capable of undertaking the trials needed to launch the product in the US.
