Entrepreneurship

STEL Technologies, LLC

Elevator / One Line Pitch: STEL’s biologic ligament graft enables the body to re-grow new ligament such that the knee functions normally after an ACL reconstruction. With our success in over 40 animals, we are seeking a partner to bring this technology to humans.

Business Summary: Compared to an autograft, the use of a cadaveric allograft for ACL reconstruction eliminates donor site morbidity, requires less surgical time, and presents less initial post-op pain and disability. Cadaveric allografts are viable options for older recreational athletes and in revision surgeries. However, the high incidence of allograft failure in young patients (<20yrs) and high-level athletes, increased risk of disease transmission, limited cadaveric supply, and slow rate of graft incorporation and healing have hindered widespread adoption of these grafts in favor of autologous tissues.

STEL’s completely cell-generated bone-ligament bone (BLB) graft can eliminate the donor site pain and disability associated with the use of autografts, while overcoming many of the allograft shortcomings related to disease transmission and graft failure risks.

To date, STEL has received nearly $1M in internal funding through the Coulter Foundation, ORT, MICHR, and MIIE and completed over 40 large animal ACL reconstructions demonstrating the efficacy of our BLB replacement graft to regenerate a functional ligament and enthesis at 6, 9, and 24-month time points. Current efforts are focused on in-vitro construct development and implementing GLP/GMP compliant tissue manufacturing processes. STEL has been awarded an STTR grant from the NSF to evaluate a closed bioreactor system for automated BLB manufacturing, and another STTR grant from the NIH to assess cell and tissue composition of human-derived BLB constructs.

Management:

CEO: Lisa Larkin, PhD., Associate Professor of Molecular & Integrative Physiology,

CTO: Michael Smietana, PhD;

CSO: Ellen M. Arruda, PhD., Professor of Mechanical Engineering, Biomedical Engineering, and Macromolecular Science and Engineering, UM.

Customer Problem: Unmet need with existing treatment options:

Autografts:

  • Donor site morbidity from graft harvesting
  • Long and complex surgical procedure
  • Post-op and early rehab knee pain
  • Inconsistent patient outcomes

Allografts:

  • Increased failure rate compared to autografts
  • Slow and incomplete graft incorporation
  • Increased risk of disease transmission
  • Limited supply, especially for PT grafts
  • Inconsistent patient outcomes

Product/Services: Primary business focus:

  • Manufacturing of completely cell-generated, allogeneic BLB replacement graft for ACL reconstruction. Cost of approximately $100 per graft with proprietary bioreactor system for automated construction fabrication.
  • One size fits all, off-the-shelf, frozen biologic tissue capable of fully regenerating the damaged ACL.

Intellectual Property:

  • System and Method for Forming Bone, Ligament and Bone-Ligament Constructs, USPTO patent number 8,764,828, July 1, 2014.
  • Bioreactor and Method of Forming Multi-Phasic Tissue Constructs, (provisional 62/193,030) July 15, 2015.

Target Market: ACL injuries are the most common sports related injury in US with an incidence of 1:3500. An estimated 500,000 knee ligament reconstruction surgeries are performed each year in the US creating a total market size of $3 billion (MRG Report-2013). Approximately 440,000 (88%) of those surgeries are primary ACL reconstructions (non-revision or multi-ligament injuries) and that number is projected to increase by 4-5% per year over the next 5 years.

Regulatory Needs: We anticipate our product will be regulated through the BLA FDA approval process. An FDA request for designation of a devitalized version of our product is currently in preparation and a pre-IND consultation with the FDA will be scheduled to determine the enabling GLP/GMP studies needed to facilitate a Phase-I clinical trial.

Customers: Orthopedic surgeons requiring allografts for lower-demand, older patients (>40yrs) with inferior autogenic tissue, patients who prefer to avoid autologous harvest, or complex cases such as multiple ligament injuries or ACL revision surgery with insufficient autologous tissue availability. Having demonstrated product superiority, we will grow our customer base to include orthopedic surgeons performing autograft reconstructions.

Sales/Marketing Strategy: Anticipate utilization of sales/marketing strategy of larger strategic partner.

Business Model: Graft sales to hospitals and insurance reimbursement

Competitors: Existing allograft suppliers: Allosource, LifeNet, MTF/ConMed, RTI. Alternative graft options: Serica Technologies, Soft Tissue Regeneration, Inc. (synthetic), Aperion Biologics (xenogenic).

Competitive Advantage: Versus Autograft

  • Eliminates donor site morbidity
  • Reduces post-op and early rehab pain
  • Shortens and simplifies procedure
  • Recreates normal function of uninjured ACL

Competitive Advantage: Versus Allograft

  • Decreases risk of disease transmission
  • Reduces incidence of re-tear or failure
  • Shortens patient’s return to sport
  • Recreates normal function of uninjured ACL

Project Plan / Status: Partner to Complete Development.

Project Plan2015201620172018
Pre-Clinical
Milestones
Pre-clinical
In-vitro studies
SOP
Development for Manufacturing, Bioreactor Refinement
Large-animal
GLP Safety/ Efficacy Study
———————–
Scale-up
Manufacturing
IND filing, Phase I Clinical trial

Revenue Plan: Product revenues are not projected

Funding Plan: Seeking to out-license technology to strategic partner, or funding and new co-partnership for IND enabling studies, IND filing, and Phase I and II clinical trials.

Exit Potential: Completion of preclinical trials before acquisition/merger with major biotechnology firm.