Just for the record, I'm not going to imply that BioRestorative Therapies, Inc. (OTCBB:BRTX) is poised to put companies like Medtronic (NYSE:MDT) or Stryker Corporation (NYSE:SYK). On the other hand, BioRestorative Therapies won't need to destroy Stryker Corporation or Medtronic to be rewarding for its shareholders. BRTX is only a $10 million company, and even the tiniest sliver of the spinal-related business that SYK or MDT are doing now could still be a windfall for shareholders of the up-and-coming organization.
At the heart of the matter, as was noted, is spinal care. Stryker and Medtronic are both well entrenched in the back business, which - by the way - is an industry worth about $10 billion per year. SYK owns about $1.4 billion worth of that market, selling its Aviator and Reflex spinal plates, and its more extensive OASYS bone-linking system. MDT is an even bigger player, selling about $3.2 billion worth of spinal fusion hardware like the INFUSE Bone Graft system.
All that skeletal technology is impressive to be sure, but ask any orthopedic or spinal surgeon... there is no simple or easy spinal surgery. All of them are invasive, can be painful, and require at least some post-surgery physical therapy. But, what if many of those surgeries could be sidestepped by a back-pain solution that was little more than an injection? Enter BioRestorative Therapies, Inc.
BRTX is the developer of a trio of stem cell therapies, but its flagship work is in the area of stem cell treatments for bulging and herniated discs. In some (read 'too many') cases where spinal fusions have been performed to reduce or eliminate back pain, had a viable spinal repair option been available, it may have sufficed. BioRestorative Therapies' brtxDISC program is potentially that viable option. Using a patient's own stem cells, a dose of healthy spinal disc cells is injected into a failing disc, which effectively repairs and rejuvenates the disc. It sure beats the heck out of screwing a hunk of metal onto a vertebrae, and physical therapy is rarely necessary.
Oh, it's a heck of a lot cheaper too... a reality BRTX expects to be able to easily capitalize on. The total cost for a stem cell disc treatment is about $18,000. Presumably the performing caregiver would charge for administering the treatment, but the grand total of a brtxDISC therapy is still going to be well shy of spinal fusions and discectomies, which can start at $35,000 and run all the way up to as much as $100,000 (and that doesn't factor in physical therapy). Insurance companies are going to love it to.
As for the opportunity at hand, BioRestorative Therapies estimates about one million candidates for the treatment option will surface every year. That's a multi-billion opportunity.
As for when it might become a reality, there's a chance the company may be able to skip Phase 1 trials and go straight to Phase 2, based on its preclinical/clinical work to date; 38 patients have already used this treatment approach, and the vast majority of them have seen their back pain significantly reduced. Only three of them went on to have other spinal surgeries after the BRTX treatment. Skipping Phase 2 trials could shave off a couple of years in the FDA's drug approval process. Even if the company does need to do a full-blown Phase 2 trial, though, veteran biotech investors know how this works - the market rewards milestones, not just reaching the end zone. Indeed, right now is the proverbial ground floor opportunity with this young company that could eventually shake things up a little for bigger players like Medtronic and Stryker.
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