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George Dunbar, President and CEO of ISTO, Interviewed by RMi

Dec 23, 2014

The President and CEO of ISTO Technologies, George Dunbar, was recently interviewed by Henry McCusker of RegMed Investors (RMi). The following is an excerpt of the interview, or you can view the whole article here.

Q:  George, give me the “elevator pitch” for ISTO.

ISTO is a pure-play orthobiologic company creating off-the-shelf, cost-effective, long term restorative treatment solutions for cartilage and bone diseases.  We currently offer a commercially-available spine focused orthobiologic platform for osteoconductive bone graft extension and substitution, bone marrow aspiration, and onsteoinductive trabecular bone grafting.  As the only company with scalable technologies capable of growing living cartilage tissue outside the body for cartilage and bone regeneration, ISTO also has product therapies in late-stage clinical development for treating discogenic back pain and articular cartilage restoration.

Q:  What is the orthobiologics market and the current standard of care?

A:  A good question that has a long answer – but let me first say that this is an exploding niche.

Let’s start with the market.  Degenerative joint disease and back pain are the two most common causes of disability in adults for which there is no optimal remedy.  These conditions are caused by injury or age related degeneration of cartilage.  Once injured, adult cartilage does not have the capacity to heal or regenerate.  Traditionally, medical management for these conditions focused on conservative, palliative care and progresses to surgical correction if pain and disability did not resolve.  It is estimated there are over 1.2 M arthroscopic procedures in the U.S. annually, of which 62% present with damaged articular cartilage. Similarly, there are 4 M patients in the U.S. who suffer from dIscogenic back pain, of which approximately 10-15%, or about 500 K, are unresponsive to conservative therapies.  Currently, there is no effective long-term treatment in sight for either condition.

Interest in cartilage regeneration remains high since there is a general belief that an injury to the articular cartilage is the first step in the joint degenerative process.

Add to this the explosive changes taking place in the macro healthcare environment that directly affect what procedures are performed by clinicians and what products are selected for use.  Doctors are moving away from a fee-for-service model to data driven decision making  to determines both what to use to most effectively treat the patient within clearly defined reimbursement criteria.  What’s more, as more physicians move out of private practices and become employees of hospitals and accountable care organizations (ACOs), they are losing their grip over buying decisions. They now find themselves as a single stakeholder (albeit a critical one) among institutional value analysis committees, buying groups, and hospital administrations where clinical data and cost-effective pathway planning determine what products are selected for use.

Now, let’s focus on therapies.  Cartilage regeneration is considered the “Holy Grail” of the orthopedic industry. Several companies, including ISTO, are exploring the use of stem cells to regenerate damaged cartilage for more effective, less invasive treatment for degenerative joint disease and/or joint damage resulting from sports injury.

But there is a distinct difference between ISTO’s product line and those offered from other companies – and it’s our competitive advantage.  Specifically, ISTO has developed unique, proprietary methods to expand and preserve cartilage cells (chondrocytes) derived from allogeneic juvenile cartilage tissue.  These cells are proven to offer superior healing and regenerative capabilities compared to other technologies from our competitors that use less proliferative, comparatively senile adult autologous cells.

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