Pain is a huge problem for patients who have orthopedic surgery. Those who have knee, hip, or shoulder operations tend to evaluate the success of the surgery based on how much pain they had.
Virtually everyone suffers post operative pain, and 75 percent of them are inadequately medicated, says Arthur Alfaro, CEO of Orthocon at the Technology Center of New Jersey on Route 1 South in North Brunswick. He notes that patients who are medicated suffer side effects from the pain killers that are sometimes as bad as the pain itself.
Alfaro believes his two-year-old company, with its small laboratory at the Technology Center of New Jersey, can revolutionize the treatment of post operative pain. He and his co-founder, Richard Kronenthal, successfully licensed products of an earlier company, and they have invested $1.5 million of their royalty profits into Orthocon. With two full-time employees (the founders) and four part-time employees (Rutgers graduate students), they project sales of $7 million in the first full year of marketing and $80 million after three years.
Using the figure of an orthobiologics market that is worth $3 billion, Alfaro seeks $10 million in financing. During the week of October 24 a venture capital firm gave the company a "term sheet" (a promise) for half that amount. Though the venture capitalists may entice Orthocon to move out of New Jersey, Alfaro is confident of his overall success.
"We are not coming out with another evolutionary product. Ours is revolutionary. It can have a significant impact on quality of care and morbidity of the surgical patient," says Alfaro. "Our platform technology has applications in virtually all orthopedic and spinal surgery procedures and also in other surgical specialties. We have the opportunity to address problems that have not been adequately addressed."
Alfaro says that, in his role as a marketing person, he has witnessed nearly 750 surgical procedures, and all that time in operating rooms alerted him to some urgent problems. "Hospitals will spend $30,000 to put in a state-of-the-art spinal implant, but when it comes to stopping bleeding in a bone or controlling infection they use technology that is 125 years old."
"We said, let’s come up with a set of biomaterials that address these common problems," says Alfaro. "Every time we show this product to a doctor, they love how it handles and how they can place it exactly where they need it. I haven’t found a doctor who said he wouldn’t use it; the only discussion is how frequently they would use it."
"We focus on orthopedics because in these areas are the highest incidence of post-operative pain. Also our product is uniquely applicable to orthopedic and spine surgery because we it can adhere to the bone," he says.
Orthocon has taken out patents for its Syntinate platform technology; its natural and synthetic orthobiologic compounds can absorb and release drugs in precise quantities. For instance, Orthocon combines a common painkiller, such as lidocaine, with a carrier material to make a cream or a putty like paste, similar to playdough. Surgeons apply it directly to the bone that has had the surgery.
Currently surgeons can put the lidocaine directly on the site but it lasts only for a short period of time after the operation, whereas Orthocon’s product can last three days or eight days, or even up to six months.
Orthocon also has patents for using a biomaterial for hemostasis (stopping bleeding).
It helps Orthocon’s cause that orthopedic surgery varies little from patient to patient. "Orthopedics is a very defined market, with the same bone and tissue being exposed, so that we can get consistency in how the product is applied," he says. "Down the road we will go into other specialties."
If you think that pain is a minor issue, think again. If it hurts to breathe, for instance, respiration is impaired.
"Unlike with chronic pain, post operative pain has a specific curve, starting off high and lowering later," says Alfaro. "If you can get the patient through the high pain period, the patient will be able to tolerate pain much better down the road. Once sensitized, the patient is more vulnerable to pain thereafter. And if you have pain, you will have a problem with mobility. If it hurts to walk, you won’t walk."
Surgeons are already trying to control pain with what is currently available – opioids or fusion pumps. Opioids (artificial opiates) are addictive and can cause their own kind of pain that results from constipation. And pumps with catheters outside the body can get infected easily.
Another selling point is cost. A three-day pain device would have a price point of $450, while an eight-day device would cost $1,200. Using either one could help get the patient out of the hospital several days earlier, Alfaro believes, which of course would affect cost.
The son of a truck driver in northern New Jersey, Alfaro majored in computer science at the University of Maryland, Class of 1975, and has an MBA from Fairleigh Dickinson University. He worked for 11 years at a Johnson & Johnson firm, Ethicon, in Somerville, and has been a vice president at Boston Scientific Corporation, where he managed the microvasive endoscopy division. He was vice president of Sulzer Carbomedics in Austin, president of the thoracolumbar division of Medtronic Sofamor Danek in Memphis, and most recently was president and COO of Osteotech. He is married and has five children.
Kronenthal, the son of a millinery manufacturer, went to Brooklyn College, Class of 1951, and has his doctoral degree in organic chemistry from the Polytechnic Institute of New York. After a stint at Colgate-Palmolive, he spent 32 years at Ethicon, a Johnson & Johnson Company, where he headed the R&D division and won the prestigious Johnson Medal for Research and Development. Among the successful products that he developed were Coated Vicryl and PDS Sutures. He has 20 patents, has been chairman or president for five companies, and is chief scientific officer and executive vice president of this one.
Alfaro and Kronenthal founded Orthotherapeutics in 2003. They founded Orthocon in 2005 and incorporated it on August 31; before then it did business under the aegis of Orthotherapeutics. Alfaro has his office at his farm home (167 Stone Hill Road, Colts Neck 07722) but Kronenthal opened a laboratory at the Technology Center of New Jersey last February.
Orthocon does not want to continue to license its drug delivery technology. It did that a couple of times, under the other business name, and used those profits for salaries. "We are not looking to sell the technology but to identify markets where it has applications, one of which is pain. Once we get the company up and running and are cash flow positive, we will turn to another application."
Having spent nearly $200,000 in legal and patent fees, Alfaro hopes that FDA approval will be swift. With $5 million promised, he hopes to get another $5 million by the end of this year, so he can start clinical trials. Two years later the first products could come on the market. They will be distributed through manufacturers representatives who are already selling to surgeons. "The first $20 million in sales we can get to quickly, based on relationships they have with surgeons, but the next $60 million will require more effort."
Alfaro is sure of his eventual success, but that depends, in part, on prompt funding, and he is ready to move out of state to get it. He is restive. "My philosophy is: Make it easy. I make it easy for the surgeon, easy for the sales rep, easy for a hospital to stock the product. New Jersey does not make it easy. Anything I have tried to do with the EDA has not been easy."
"Our moving date was delayed by several months because of construction problems. That is a serious issue when you are a start up company. We were delayed in providing a product to the FDA for certification."
"Then the leasing contract was 75 pages long. It cost $3,600 to have a lawyer wade through it and make changes that were urgently needed. My attorney, Monica Ceres of Giordano Halleran Ciesla, in Red Bank said some of the clauses were atypical."
Alfaro has had no luck, so far, with getting any funding from the EDA, though he expects his firm to grow and provide jobs, and though the EDA is his landlord. He thinks this is particularly puzzling, since he had great success with his previous company. "In 2003 we started Orthotherapeutics LLC and have licensed the first four products and are getting milestone payments, with the first product due to be released in January. We did it without help from New Jersey, even though we went hat in hand to ask for funding."
"I have been looking to move to Pennsylvania, New York, or even to California," he says. "The problem with New Jersey is, there is always one program that has just been canceled or one that is coming down the road."
Orthocon, 675 Route 1 South, Technology Center of New Jersey, 732-683-9304; fax, 732-683-9476. North Brunswick 088902. Arthur A. Alfaro, CEO. Home page: www.orthocon.com
What’s New, At the Tech Center
Commercialization Center for Innovative Technologies, 675 Route 1 South, Technology Center of New Jersey, North Brunswick 08902. Don Shatinsky, manager. 732-729-0022; fax, 732-745-7270. Home page: www.njtechcentre.com
The EDA’s Commercialization Center for Innovative Technologies, now celebrating its fifth anniversary at the Technology Center of New Jersey, has expanded to 75,000 square feet with the fit-out of an additional 28,850 square feet of space adjacent to the original 20,000 square feet that opened in 2002. The EDA has also leased about 26,000 square feet of new space within the same building to Rutgers University that will be subleased to emerging life sciences and biotech businesses affiliated with the university.
The following companies are new to the Technology Center of New Jersey, and they all have the same address as the Commercialization Center, above.
Advaxis, J. Todd Derbin. 732-565-1590; fax, 732-565-1591. Home page: www.advaxis.com
J. Todd Derbin opened a laboratory for Advaxis in addition to his office at 212 Carnegie Center (609-895-7150; fax, 609-497-9299).
His company aims to commercialize therapeutic cancer vaccines developed by Yvonne Paterson at the University of Pennsylvania. Its proprietary Listeria Monocytogenes-based system is said to be able to develop safer and more effective cancer vaccines. The lead vaccine candidate, Lovaxin C, targets cervical and head and neck cancers, and other vaccines will be for breast, ovarian and lung cancers. The same platform may also have applications in the fields of infectious disease and autoimmune disorders.
Biotech Support Group LLC, 732-246-3110; fax, 732-246-3118. Home page: www.biotechsupportgroup.com
The Biotech Support Group has genomic and proteomic sample preparation and enrichment products based on surface chemistry technology. Founded as a distributor in 1994, it has two employees here. It shares an 800 square-foot unit with its sister company, ProFACT Proteomics. Between the two companies there are five principals involved.
ProFACT Proteomics, David Golub, CEO. 732-246-1190; fax, 732-246-3118.
ProFACT has a profiling system for drug development issues of efficacy, toxicity, disease biomarkers, and progression metrics. ProFACT moved to the Tech Center in October, 2004, and it was incorporated at that time. "It’s nice being part of a group of life science companies, and it is hard to find good small laboratory space," says Matthew Kuric, president of ProFact (Rutgers, Class of 1980).
Ennova MedChem Group Inc., Grace Lin. 732-745-4805; fax, 732-745-4806. Home page: www.ennovamedchem.com
With an office and three laboratories at the Technology Center, Ennova MedChem Group does offers custom synthesis, special chemical R&D, contract research, and pharmaceutical intermediate manufacturing. Joint ventures with factories in China support larger scale manufacturing and synthesis.
MaxyBio Corporation, Jason Jin, PhD. Home page: www.maxybio.com
MaxyBioCorporation is a subsidiary of two companies based in Shanghai. It offers biopharma R&D services, and it can also arrange for lab and office space in Shanghai.
Sophion Bioscience Inc. USA, Chris Mathes, general manager. 732-745-0221. www.sophion.com
Based in Denmark, Sophion Bioscience moved into the Tech Center in September. It has products and solutions for automated patch clamping, including the QPatch 16-channel automated patch clamp system. These systems have been installed in the United States, Japan, and Europe.
Time and Cross Inc., 732-246-3002; fax, 732-246-3106. Home page: www.timeandcross.com
Time and Cross does R&D and manufacture of in-vitro diagnostic tests At this laboratory the diagnostics division has developed some ready-for-market products for pregnancy, ovulation, cardiac markers, drubs of abuse, and HIV kits. Under development are products for hepatitis B & C and alcohol testing.
In the natural ingredients division the company has more than 300 plants in its R&D database and about 20 market-ready patent-pending compounds. Selecting from the database, this division extracts compounds from plants, crops or flowers for cosmetic and therapeutic use.
Vincogen Corporation, Derhsing Lai, CEO. 732-247-8972; fax, 732-247-6742. Home page:www.vincogen.com
Vincogen has a proprietary bioassay, or biochip, for applications in the diagnostic and pharmaceutical industries. Its radio-frequency (RF) ID biochip is billed as a simple, inexpensive tool for what is sometimes called "personalized medicine."
Derhsing Lai, CEO and founder, majored in botany at National Taiwan University and has a PhD in microbiology and molecular genetics from Rutgers and UMDNJ. He has worked at the National Cancer Institute, University of Maryland at Baltimore, and Thomas Jefferson and Temple universities.