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TOPIC: Limited OA approval in Japan

Limited OA approval in Japan 27 Jun 2016 05:21 #7319

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SAN DIEGO & TOKYO--(BUSINESS WIRE)--





Cytori Therapeutics, Inc. (CYTX) today announced that the use of Cytori Cell Therapy™ was approved for clinical use on June 24th, 2016 to treat knee osteoarthritis at the Tokyo Osteoarthritis Clinic under the Japanese ‘Act on the Safety of Regenerative Medicine’ that was enacted on November 25, 2014.

Tokyo Osteoarthritis Clinic will begin to treat knee osteoarthritis patients with Cytori Cell Therapy immediately. This approval is limited to facilities under the clinic’s umbrella but does not restrict the number of patients that can be treated. Such approvals are not reimbursed by the social healthcare system and patients will be responsible for the costs of treatment.

“Osteoarthritis is very common in Japan and the new legislation gives us an approved pathway to make novel regenerative therapies available to patients today,” said Dr. Masayuki Yamakawa, CEO of the Tokyo Osteoarthritis Clinic.

In Japan, Cytori’s Celution system was granted a Class I notification originally in 2012. The recent legislation passed by the Japanese Diet originally in 2013 and later enacted and enforced, provides a mechanism allowing leading healthcare facilities in Japan to use certain regenerative medicine technologies deemed innovative and safe by the Japanese government for particular indications if approved by a certified and accredited regenerative medicine committee.

“The innovative regenerative medicine law recently approved in Japan creates expanded opportunities for therapeutic innovation for Cytori,” said John Harris, Cytori’s Vice President & General Manager, Cell Therapy. “This registration and those anticipated in the future should be important elements in helping us expand access for our Cytori Cell Therapy to a large population of patients in Japan suffering with osteoarthritis. For the Tokyo Osteoarthritis Clinic, this is a significant milestone and I believe they are well positioned for leadership in arthritis therapy in Japan

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Limited OA approval in Japan 27 Jun 2016 05:22 #7321

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Good news but I wonder why its limited to this one branded clinic

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Limited OA approval in Japan 27 Jun 2016 06:01 #7323

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myownhedgefund wrote: Good news but I wonder why its limited to this one branded clinic


There are no clinical data anywhere, so conditional approval would be out-of-the-question, I presume. But the safety from the US was already proven at the 24 week point, plus probably a few Japanese patients in "unknown private investigator studies" and that would be sufficient for this, is my guess.

This will not be the only app which will find his way into the clinics on private pleasure- but main thing being, we know now that this Class 1 approval from 2012 "needs something more" for treating specific apps. Surely this will apply in China too.

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Limited OA approval in Japan 27 Jun 2016 06:46 #7324

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After asking a few questions from San Diego, I think it will be time to break out OA into its own category in Japan. Previously, I had lumped aesthetics, OA, IBD and ACL into a general category with a 50% year over year growth rate. Maybe that growth rate will cover this opportunity, maybe not.

No doubt the 24 week data from ACT-OA was used to get this approval. That was the sole purpose of partially unblinding the data at the halfway mark. Makes me feel better about the data to come and where it might lead us.

Also, if memory serves, reimbursement can be granted at a later date based on the patient outcomes from this clinic. No clue about the perimeters surrounding that decision. Would be nice to see a front page story on this approval in the Tokyo newspaper!

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Limited OA approval in Japan 27 Jun 2016 06:53 #7325

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Perhaps it is limited to that single clinic because they own a Celution System and have applied for the approval. I don't see why others could not follow the same pathway unless this is how the law was written - to designate a single facility to build a database for greater consideration at a future date.

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Limited OA approval in Japan 27 Jun 2016 07:24 #7326

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DOV wrote:
No doubt the 24 week data from ACT-OA was used to get this approval. That was the sole purpose of partially unblinding the data at the halfway mark. Makes me feel better about the data to come and where it might lead us.


Makes those 48 weeks data than also as a sales driver of course. Just assuming that they are similar to what we have seen with SVF than surely there will be quite a few patients knocking on the door(s) of that Tokyo OA Clinic (and its subsidiary clinics..).

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Limited OA approval in Japan 27 Jun 2016 08:10 #7327

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Bigger reason not to be too excited is that it is strictly private pay. I don't think it says anything about the 48 week OA data. That would be like the tail wagging the dog.

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Limited OA approval in Japan 27 Jun 2016 10:15 #7328

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Agree WST
Self pay will limit the pool and patient cost will likely be at a premium given the limited access

If I were to apply the mention of 48 week data...if they got this far on the 24 week...can the 48 week push it even further ? By this I mean perhaps a very small number of Japanese will have to be treated to get full coverage. Who knows, but basically we have a Okyanos style OA treatment option in Japan now. A positive, but will only move the needle so far.

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Limited OA approval in Japan 27 Jun 2016 11:55 #7329

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Sincerely hope that self pay in Japan works out better then it did for self pay in Europe for breast reconstruction.

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Limited OA approval in Japan 27 Jun 2016 12:12 #7330

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Different animals.
Better to compare apples to apples
Okyanos OA a better comparison and the limited travel issue for Japanese within their own country should add a positive aspect. Still the patient pool will have its limits. Reimbursement will always be the key for large scale use.

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Limited OA approval in Japan 27 Jun 2016 17:24 #7333

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Agreed: no comparison between the breast reconstruction and OA indication. Plastic surgeons did not have a positive cost benefit outcome that justified their adoption of the procedure. It was not a reflection on the safety and efficacy of the treatment. Health authorities were not prepared to pay such a high cost that reflected Cytori's financial expectations and surgeon's opportunity cost. Without reimbursement there was no rational basis for investing in the capital equipment to sit idle and be used only on an ad hoc basis.

I believe that with the new Japanese legislation there is a requirement for the provision of ongoing data for proof of safety and efficacy. This will provide the basis for reimbursement going forward. It is highly likely that there were trials undertaken for this indication in Japan of which we know nothing (typical). The US OA data no doubt assisted in the decision for approval.

Lets not forget that Japan has a quickly aging population that is quite affluent. Also they are used to paying for a considerable % of the cost for various treatments in their healthcare system. This probably makes it psycologically easier to pay. I also wonder if the relative cost of medical treatment is not generally lower than the USA (not sure), which would make the absolute cost less onerous..

People today are much more aware of the risks involved for older patients with general anesthesia. That is a major incentive in trying something less invasive first. If knee replacement surgery can be avoided this will have a major financial benefit for patients and health care systems going forward. Also lets not lose sight of the fact that as the use of ADRC/SVF becomes accepted there will be ongoing development of additional less invasive treatments that may defer joint replacement indefinitely.

For younger sufferers of OA I believe the use of ADRC/SVF is a no brainer. The prosthetic/replacement does not have an indefinite lifetime. Why go through the cost, inconvenience and risk twice ????? This holds true for Japanese and all people worlwide.

If it works in Scleroderma and OA then rheumatoid arthritis is next. From there we reach the logical conclusion which Fas has articulated in the past .......... ie. get a systemic injection of SVF as a preventative health measure that will cure/treat you for what you know, and also for what you DON'T know about preemptively. :winky:

Still dreaming of :vegas: . The question is, do the powers that be want me for company? :bash: .

I feel like the guy who buys a lottery ticket every week with the same numbers and hopes that he will eventually be proven right for his persistence. This is probably better odds than a lottery ticket ....... how many shares does $10 buy? ..... hmmm.......
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Limited OA approval in Japan 27 Jun 2016 21:00 #7334

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If anyone spends more than $5 on a "lotto ticket", then they are gambling.

Rongside, I love how you dream... Younger, more hopeful :vegas:

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Limited OA approval in Japan 28 Jun 2016 07:47 #7338

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I spoke with Marc Hedrick yesterday about the Limited Approval For OA in Japan. Most of the discussion was at a high level starting with the ‘Act on the Safety of Regenerative Medicine.’ Here are a few bullet points that I hope will answer some of the most obvious questions.

• There are two pathways to follow toward approval. The first is a broad approval where a Regenerative Medicine company would undergo clinical trials to get their drug approved. This is a multi-year process and familiar to all. Once approved, the drug or therapy is approved for use by all standard entities and is reimbursed. Scleroderma will follow this pathway where Cytori will be selling a drug to the doctor manufactured by a mobile factory called Celution. The second approach is the device approach. The Regenerative Medicine Law established three safety levels. The lowest level applies to cosmetic surgeries and procedures using the Celution system to isolate ADRCs and combine them with adipose for breast augmentation and reconstruction and face injections, etc. The Celution system has been approved for this application for quite some time and is responsible for most of the sales in Japan. The next level is a medium risk category and treating OA falls into this. To gain approval, an entity such as the Tokyo Osteoarthritis Clinic must apply to the MHLW for approval. This process began about a year ago and Cytori has been assisting the clinic with pertinent documentation about the procedure and other safety data. The 24-week sneak peek data from ACT-OA was a small part of the overall data used in this application process. On June 24th, the MHLW granted approval to the Tokyo Osteoarthritis Clinic to treat patients. The approval is specific to this clinic as they have proven they are fully qualified in this specific procedure. There is another clinic that is in the same application process with the MHLW. The “TOAC” has treated about 30 patients with very good success and word of mouth has created a backlog.

• The TOAC is permitted to experiment with dosing, but Marc stated that since the 20 million cells worked as well as the 40 million group, the lower dose would be used initially. The TOAC may advertise as much as they wish and are not restricted in any way to price the 100% self pay procedure.

• Back to the high level view, TOAC is a newly formed branch of the country’s largest cosmetic surgery clinic. That business has become quite crowded and margins have been eroding for years. Branching out to treat OA is an excellent value proposition. Margins are high and the synergies make sense. They are already well versed in the liposuction procedure and rheumatologists or general practitioners can perform the actual cell injections into the knee.

• The business economics are unique to Japan. The national health insurance pays 70% of covered procedures. The patient pays the balance of 30%. This procedure does not qualify for reimbursement, but could earn that status after years of data collection. For illustrative purposes only, I will use the following example. Let’s assume the cost to the patient of the cell therapy is $10,000. The cost of the Cytori consumable is $4,000 and the clinic makes $6,000 (60%). The complete procedure takes 2 ½ hours and involves two doctors and a nurse. A total knee replacement costs $30,000 with the patient paying $9,000 of the bill. Again, these are unverified numbers used for illustrative purposes. The eligible patient population is quite large in Japan and the personal value proposition is compelling using these numbers. There will be competition and plenty of capacity and therefore, theory would suggest the pricing model would gravitate toward a volume play. It could also attract medical tourism and provide competition for Okyanos. In my opinion, the most likely patients would be in stage two and stage three OA where the therapy could reverse damage and regenerate cartilage thereby preventing reaching stage four and a total knee replacement. This is where the economics work in Japan.

• If this Device based approval pathway proves to be lucrative, one would expect clinics to open to serve other therapies such as urinary incontinence and erectile dysfunction. I am sure there are other examples as well.

• Cytori has stated many times they have a path toward reaching break-even in 2018. This approval was one of the things that needed to happen. I will not be making any changes to my revenue forecasts at this time, but clearly (even to the Rothco’s of the world) this event improves the likelihood that my revenue forecast will prove out.
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Limited OA approval in Japan 28 Jun 2016 07:58 #7339

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Healthcare
CYTX: Continued Movement to Build the Revenue Line - Pantginis, Ph.D.
Cytori Therapeutics, Buy, $11.00 PT, $26.3 Mkt. Cap.(mil)
The Celution system has received limited approval in Japan at the Tokyo Osteoarthritis Clinic and all of its associated centers for the treatment of knee osteoarthritis. We believe this represents an important milestone for the company and second potential near term revenue driver on top the Managed Access Program being put in place in the E.U. for scleroderma hand dysfunction. Reiterate Buy / $11 target

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Limited OA approval in Japan 28 Jun 2016 11:50 #7340

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DOV wrote: . To gain approval, an entity such as the Tokyo Osteoarthritis Clinic must apply to the MHLW for approval. This process began about a year ago and Cytori has been assisting the clinic with pertinent documentation about the procedure and other safety data. The 24-week sneak peek data from ACT-OA was a small part of the overall data used in this application process. On June 24th, the MHLW granted approval to the Tokyo Osteoarthritis Clinic to treat patients. The approval is specific to this clinic as they have proven they are fully qualified in this specific procedure. There is another clinic that is in the same application process with the MHLW. The “TOAC” has treated about 30 patients with very good success and word of mouth has created a backlog.


Great piece of information. Thank you. I wish Cytori would be much more upfront with these procedural things than they are. A lot of the things you explained here, should be common knowledge- at least with me- it was not. Especially if the 24 weeks US data were only a small part, what kind of data have they provided- just preclinical stuff? Cannot imagine so. Based on this event, which most likely will have a material impact going forward (I totally agree there), one can assume there is more in the pipeline. I think its time Hedrick pulls his pants down on Japan. The "Investor Note" from early this year, was good, but not very specific- would be good if he became specific. As an example we know about PAD coming- I still think that is something bigger, shareholders should know about.

Anyway- 30 OA patients already treated is pretty impressive and I never knew BACKLOG was a word I would ever read in connection with Cytori in the next 3-4 years or so. :grin: :grin:

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Limited OA approval in Japan 28 Jun 2016 13:40 #7342

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I have to take backlog with a grain of salt as 100% management and BOD participation is still fresh in my mind and as DOV mentioned $2.55 got you in the club.

Still, Fas has a point that it is a new term to be associated with Cytori !

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Limited OA approval in Japan 29 Jun 2016 10:03 #7345

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rongside wrote:

Lets not forget that Japan has a quickly aging population that is quite affluent. Also they are used to paying for a considerable % of the cost for various treatments in their healthcare system. This probably makes it psycologically easier to pay

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I truly believe that there are enough patients with enough wealth to create great profits "if". The "if" is if the therapeutic procedure works and creates a better quality of life. That is the elephant in the room. That is the "show me the money" moment that everyone seems to believe is the reality but that has not been proven in the market place. Until that happens we are all sitting here with our fingers in our anus.

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Limited OA approval in Japan 30 Jun 2016 07:25 #7354

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The word "backlog" should be taken with a grain of salt since the physical ability to treat patients far exceeds the number of schedules procedures. A good investigative reporter would be looking for advertisements in the public domain for the procedure. Anybody good at that?

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Limited OA approval in Japan 30 Jun 2016 09:05 #7355

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Not to worry fatboy, Dov say's that stem cell treatments are very effective in treating fingers up the anus. lol
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Limited OA approval in Japan 30 Jun 2016 17:10 #7356

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One advantage to this model, and it applies to Okanos as well, is that it really doesn't need to work to make money. All these clinics need is a strong enough placebo effect to keep attracting patients by word of mouth. Sometimes knees get better on their own and a little psychological boost certainly helps.

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