PolyNovo (ASX:PNV): improving outcomes
Global medical device company PolyNovo (ASX:PNV) is focused on delivering improved patient outcomes through the use of innovative polymer technology. Paul Brennan was appointed as CEO in 2015, and brings extensive knowledge and experience to the role.
“I’ve always had a curiosity in manufacturing and project development,” Mr Brennan says, “at ConvaTec, Ansell and Smith & Nephew, so I’ve always been curious as to how each part of the business works.”
When the opportunity arose to apply for the position at PolyNovo, Mr Brennan felt it represented a good mix of everything he’d been previously involved with, all concentrated into one
“It’s ever-changing, very dynamic. We’re fast growing and it’s very challenging. But a lot of those core strengths on marketing, corporate structures, quality management systems and manufacturing, are things that I’ve been able to draw on in this role.”
PolyNovo’s work is based around the unique polymer NovoSorb™, and focuses on the development and commercialisation of innovative medical devices in the treatment of burns, surgical wounds and Negative Pressure Wound Therapy.
“[The polymer] is biodegradable and very cell-friendly, meaning it’s non-toxic to new cells. So we help reconstruct damaged tissue in a variety of fields with a novel polymer that you then excrete through your urine or breath out through your lungs.”
The company’s first product to go to market utilising the NovoSorb™ polymer is a wound dressing product for full-thickness wounds and burns known as a Biodegradable Temporising Matrix (BTM).
“Whenever you lose the underlying structure of your skin, which is call the dermis, we can actually regenerate that dermal layer by putting in a unique polymer, and the cells of your dermis grab back into that layer and re-vascularise.”
The dermis is the layer of skin that contains all the blood vessels, fat, elastin and cellular structures, and can be lost through the excision of a melanoma, burns, trauma, reconstructive surgery or infection.
“[The polymer] remains inside you for up to twelve months, and dissolves away over that period, and you excrete it through your urine predominantly as lactic acid, and you’re left with a very supple and mobile skin, and a very good cosmetic and functional outcome.”
PolyNovo’s BTM is currently on sale in Australia, New Zealand, South Africa and the United States, with other markets poised to come on board very shortly, most notably Israel and Saudi Arabia.
“The technology was invented by the CSRIO [Commonwealth Scientific and Industrial Research Organisation],” Mr Brennan explains, “and spun out into a listed company to fund its development pathway in 2004.”
The path to this point has not been easy, and has taken in various corporate ownerships, but a company restructure and new board in 2014 steadied the ship, with a fresh injection of investment going into commercialising and developing the product.
“Since 2014 we’ve built a clean room manufacturing facility, enhanced our quality management system, built our regulatory team, our R&D science team as well, and we’ve done all of the animal studies that were required, and all the laboratory works.”
The result of this hard work is a product fit for human use, and one that has proved to be exceptionally good. The product has produced excellent aesthetic and functional outcomes for patients treated with it.
“In this space, the products that are used today are animal-derived. By having a purely synthetic product that is bio-reabsorbed by your body and replaced with your own tissue, you have no foreign proteins or foreign body risk.”
The pathways to application for the product are broad, although Mr Brennan admits that the stark reality of the business is that there is a clear limit to how much can be done at any one time.
“At the moment, it’s about the BTM, having that established commercially within the market, bringing on our hernia range of products and a range of breast products. We’re partnering with another company, Establishment Labs, to bring Breast products to market.”
On top of these main products, the company is in second tier development on a range of others, such as a drug-alerting palette, a product which releases a measured dose of a drug per day as the polymer dissolves.
“We’re also growing within implanted NovSorb BTM—with another company in Adelaide, Beta Cell Technologies—islet cells, which are from the pancreas, that produce insulin, and they can successfully be grown in pig studies within the BTM and produce insulin for type one diabetes management.”
In order to find market opportunities across so many different applications, PolyNovo identifies clinical needs in the market, clinicians who express concerns in treatment modalities, and apply the polymer to address a clinical outcome.
The company’s commercialisation process takes in the different regulatory conditions across the world. In the US the company is already FDA approved, registered and on commercial sale, but the Australian market works differently.
“For Australia, the current use is under the TGA Prescribers Exemption Scheme, and that’s a pre-registration scheme, so it allows individual surgeons to request the use of the product for an individual patient. It’s not a blanket acceptance.”
In addition, the company has recently filed its regulatory dossier with the TGA, and is expecting to achieve a listing on the Australian Register of Therapeutic Goods (ARTG) in the second quarter of 2018.
“[ARTG] is the TGA regulatory approval, and that would allow any hospital and any surgeon to purchase the product for its appropriate use, without having to go through an exemption application.”
As the company’s home market, Australia will always be important for PolyNovo, despite being a relatively small global market. The TGA approval will help the company achieve good margin and be profitable.
“Our commercial future looks very strong. The main focus of the commercial opportunity remains the US, followed by Europe, which we’ll enter at the end of 2018, then the other countries around the world, as we can address the regulatory entry points for each.”
The sale of the product in the US should provide sufficient funds for PolyNovo to launch its expansion into other world markets. The strategy of entry will be country-dependent, focusing on the particular areas where these products are to be used.
“In the American market and the Australian market, it’s large surgical wounds, the area of most opportunity, so our focus there is to identify plastic and general surgeons who have advanced skills within this space and target them for the entry into that segment.”
When surgeons are looking for new products, they look for three things: the efficacy of the product in terms of outcome, the cost impact of the product to the health system and the long term outcome for patients using the product.
“We’ve got a very good clinical understanding of the application of the product,” Mr Brennan says, “and the types of surgeons that would be adopting the use of this product in a hospital.”
The company has seen significant recent growth, resulting in a huge rise in staff numbers, an outcome that has stemmed from a multitude of factors, predominantly PolyNovo’s entry into the US market.
“We’ve had a very supportive board. Our chairman is very committed to investing in the company, to make sure that it can succeed. Having a very active, engaged and supportive board is essential for our future growth and development.”
People are a positive resource for any company, and its success relies on its staff and the output that they produce. As PolyNovo expands into other markets, staff numbers are growing because of a need for the product to be successful.
“Our staff are very focused on their particular areas, but in all of those what is central is: how does our product enter the market and improve the life of a person who actually has a terrible need because of their illness or condition to be treated?”
The acceleration in the company’s R&D in new product pipelines has also been vital, with work still going on behind the scenes to bring its hernia, breast and tier two products to market following the success of BTM.
The company’s R&D investment is not just focused on growing its product line, but also on new innovations. The BTM product itself was subject to changes which improved its overall
“It’s getting close to our customers, looking at what’s their experience, what’s their need? And then incorporating those back into the design of a product improvement and then bringing that through the regulatory and quality processes so that we can market it.”
All of this ensures that PolyNovo has a bright future. Mr Brennan is proud that the company makes its product at home in Australia, employing Australians and manufacturing in its Port Melbourne plant.
“This is a unique market space in the world, true innovation out of CSIRO, and very proudly employing Australians and showing that we can, as a country, deliver innovative technologies to the world. It’s a very progressive and exciting phase that we’re in.”