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The United Kingdom’s National Institute for Health and Clinical Excellence (NICE) yesterday issued interventional procedure guidance for breast reconstruction following cancer treatment (select link). It concludes lipomodelling (autologous fat grafting) is a safe and effective option to restore volume and contour defects after breast conserving surgery (lumpectomy). It notes that devices are currently being introduced, which aim to concentrate adipose stem cells and enrich adipose tissue in lipomodelling and encourages the generation of additional outcome data for such procedures.

What it Means to Cytori: The guidance is a positive and important development for Cytori’s pursuit of payment (reimbursement) in the UK for its Celution-based breast reconstruction procedure. The next step in the process is to apply to the Medical Technology Advisory Committee to NICE. This committee provides formal product specific certification of clinical and economic benefit. This process typically takes nine to 12 months. A positive outcome will facilitate use of the Celution® System and related consumables for breast reconstruction across the UK in both private and National Healthcare System hospitals.

Given the UK and NICE’s influence as a leading reference, this effort should help further our progress in the other countries throughout Europe where we are also currently seeking payment or reimbursement. An estimated 12,000 breast reconstruction surgeries are performed each year in the UK alone and 125,000 throughout Europe.

Background: NICE is a government organization that provides guidance on treatments and procedures to the National Health System (NHS), sets quality standards and manages a national database to improve health in the U.K. NICE guidelines are most frequently issued on procedures that are relatively new and NICE is increasingly looked to across Europe as a leading voice in healthcare and economic analysis.

Based on the available evidence and the views of Specialist Advisers, NICE’s Interventional Procedures Advisory Committee reported the procedure is effective, noting that there is no published evidence of increased recurrence, and there are not expected to be any significant issues with imaging interference given current lipomodelling techniques and expert interpretation.  NICE guidance strongly influences which procedures and treatments are offered by the U.K.’s National Health System.

This guidance is encouraging since few options are currently available to lumpectomy patients and use of lipomodelling (including cell-enriched) has thus far been limited because of uncertainties among doctors about the procedures’ risks and its potential to interfere with imaging of the breast for cancer surveillance.

Professional breast care organizations in the UK had formally acknowledged this development with the issuance of their own lipomodelling guidelines including a more extensive section on cell-enriched fat transfer.

A considerable amount of new data and commentary on cardiac cell therapy have come out last week and early this week from the TCT interventional cardiology conference and the AHA meeting. Later this week, we will distribute a summary that puts these recent developments into context to help you evaluate the field, the companies involved, the differing approaches and the various cell sources.

In the meantime, we want to  share an editorial (http://bit.ly/rKYGhG) and publication (http://bit.ly/swFREw) that appeared today in JAMA on the timing of cell delivery for heart attacks. The study found that delivery of cells should be performed within at least two weeks. However, author of the editorial, Dr. Josh Hare, takes the opportunity to explain how trials like this help optimize delivery, the evaluation of endpoints, and guide future studies and ultimately clinical practice.

Dear Investors,

The TCT Interventional Cardiac Device meeting, which is being held in San Francisco this year, is hosting a full-day track on Mon. Nov. 7th on cardiac cell therapy titled, Strategies for Cardiovascular Repair: Stem Cells and Beyond. The program may be found here, under Scientific Symposia.

This track has historically provided a succinct review of the state of the industry. It should again this year provide an opportunity to understand the competing approaches, a summary of clinical trials in critical limb ischemia, the acute heart attack setting, and the chronic setting, as well as a discussion on the latest advancements in delivery.

As it relates to Cytori, the following two talks will cover Cytori’s clinical trials:

• 11:40 AM PST - Adipose Cells for STEMI: APOLLO and ADVANCE Randomized Trials, Henricus J. Duckers, M.D.
• 1:45 PM PST - Final Results at 18 Months of the PRECISE Trial for Refractory Angina, Francisco Fernandez-Aviles, M.D.

For those investors who will be at the conference, we look forward to seeing you there.

Best,
Tom

Following APOLLO Hospital Group's announcement last week that they have become a non-exclusive customer for Cytori's Celution® System, Elixir Hospital has announced the launch of a Regenerative Medicine Center in Mumbai centered around Cytori’s Celution® System. Elixir Hospital is a multi-specialty center for minimally invasive surgery.

The center will initially focus on reconstructive surgery and other cell-enriched cosmetic procedures. In the future, they intend to expand their offering to include applications such as orthopedics and wound repair as those indications become approved.

We believe the foundational relationship with Apollo Hospital Group positions Cytori well for scalable growth. As part of our strategy for entering India, it was important to secure a core customer of Apollo's reputation and size (one of Asia’s largest private healthcare groups) so that we would be able to pursue, attract and support a broader customer base. The sale to Elixir is indicative of how this approach is beginning to play out and of future opportunities in the country.

 

Dear Investors,

A news source from Australia has erroneously reported that Cytori entered into a financing agreement. This is in fact not the case as Cytori would have issued its own formal disclosure on such a material development.

Best,

Tom

As part of our ongoing business updates, we want to let you know we just recently received a second comprehensive StemSource® Cell Bank order this year. This order was from a private hospital customer in Japan, whereas the previously announced order was from a leading cosmetic surgery group in Hong Kong. We expect that banking installations are expected to contribute meaningfully to our overall product revenues, with the added future potential for recurring consumable sales.

We offer the banks primarily for three reasons: first is near-term commercialization of our platform technology, second is that they fulfill demand amongst hospitals and clinics for access to cell processing and storage that can lead to expanding into additional business opportunities, and third is that it reinforces our brand as a market leader in regenerative medicine.

We expect the bank installations to occur during the summer and will provide more details on our next quarterly conference call.

One of our hospital customers in the UK today presented results on a 23 patient independent clinical series using the RESTORE procedure. The cases included not only breast reconstruction following lumpectomy and radiation therapy (in similar fashion to our own RESTORE 2 breast reconstruction study), but repair of congenital deformity and as a secondary procedure following TRAM flap or LD flap. The multiple applications that were performed offer an example for how a Celution® System may be integrated into a breast reconstruction practice within a hospital, in this case with an NHS hospital in the UK. The complete release may be accessed at the following link - http://bit.ly/mJCeD8.

Stem and regenerative cell enriched fat grafts are being used to help address some of the problems associated with traditional fat grafting, particularly in the setting of large volume fat transfer or in cases where the area to be grafted is suboptimal (previous surgery, radiation, etc.).

In a new article entitled “Staged Stem Cell-enriched Tissue (SET) Injections for Soft Tissue Augmentation in Hostile Recipient Areas: A Preliminary Report” published in Aesthetic Plastic Surgery, Dr. Tunc Tiryaki, lead author and one of Cytori’s European customers, describes a new technique that incorporates adipose-derived regenerative cells. The technique, which involves a staged approach during a single procedure, was used to treat 29 patients, some of whom were followed for up to 3 years. Simultaneously, an initial portion of fat undergoes Celution® processing while additional fat is getting removed via liposuction, cleaned, and grafted into the desired area using traditional techniques. Once the Celution® device has prepared the cell suspension, the cells are re-injected into the area that has just been grafted.

The technique used by Dr. Tiryaki allows for a decrease in operating room time, which means lower costs to the physician and patient. Whether using the more conventional workflow (as described by Cytori) or this new technique, it speaks to how European physicians can and will adapt their own approach to cell-enriched grafting using the tools and systems provided by Cytori to best suit their own practice.

Further, this publication is a valuable addition to the growing body of scientific literature which supports the use of the Celution® System for soft tissue augmentation, both for aesthetic and reconstructive indications.

Click here to view the abstract or to purchase the complete article.

Regards,

Mollie Carter, M.D.

Cytori reported top-line 12-month outcomes on all 71 patients from the RESTORE 2 study (full data to be published later this year). The outcomes demonstrated cell-enriched reconstruction using Celution® resulted in a sustained, high level of patient (75% ) and physician (85%) satisfaction. This further supports cell-enriched reconstruction as a viable, natural, and minimally invasive option to repair lumpectomy defects.

With the full RESTORE 2 data and the July 2010 breast reconstruction approval for Celution, our direct sales is dedicating more time calling on hospitals to offer the device for breast reconstruction. In comparison, through much of 2010 our sales force dedicated much of their time calling on private pay plastic surgery clinics.

Reconstruction with Celution will be offered under the name, The RESTORE Procedure. This is to help distinguish and increase awareness of this new option for patients. In and around hospitals that own and operate a system, we will continue to undertake education campaigns designed to inform patients about this new option. We are also working with patient advocacy groups to educate them no the new option.

The RESTORE Procedure is already funded today at the local hospital level in an increasing number of European countries. This new data will further the company's effort in securing specific national level payment in a number of key geographies, with an initial focus on France, Germany, Italy, Spain, Switzerland, and the U.K. In tandem we are working with hospitals to discuss the potential cost savings in performing a cell-enriched procedure (as compared to a FLAP procedure, which is typically more invasive and requires greater hospitalization time).

To reach surgeons, we have launched an initiative called the "Cytori Exchange," which is a forum for physicians to participate in live surgical seminars or workshops and a way to share ideas with each other on how the Celution device may be used for reconstruction, aesthetics, and other regenerative medicine procedures.

Coinciding with these initiatives is the establishment of a new European headquarters in Zug, Switzerland, which we also announced today in Europe. This office oversees our direct sales force, distribution network, technical support and a supporting group that covers consumer and advocacy relations. Zug's central location, the fact it is a hub for life science companies, and favorable business environment make it an ideal locale around which to grow our European and Middle East business initiatives.

The office will be dedicated initially toward marketing the Celution System for cosmetic and reconstructive surgery, certain wound applications, cell banking, and research as well as acting as a business development center. The office will expand these efforts pending the outcome of our planned submission in Europe for no-option, chronic ischemia indications on the Celution System.

The US Patent and Trademark Office issued a new patent (US Patent No. 7,887,795) today to Cytori Therapeutics covering the process of combining adipose-derived stem and regenerative cells (ADRCs) and an additive with an autologous fat graft.

Two related trends in plastic and reconstructive surgery are the resurgence of autologous fat grafting and the emergence of cell-enriched fat grafting, where a patient's own stem and regenerative cells are mixed with their own fat to be used as a natural filler. Currently, cell-enriched fat grafting is being performed around the world for breast reconstruction (such as in Cytori's RESTORE 2 study), breast augmentation and other plastic and reconstructive surgery procedures such as facial rejuvenation and wrinkle filling.

Given these trends in plastic and reconstructive surgery, this is a timely and relevant patent because it pertains to all grafts that contain an additive and have been enriched with ADRCs, processed either by an enzyme or through mechanical force and concentrated by means of density, filtration or centrifugation. Additives may include materials that enhance the delivery, efficacy, tolerability, or function of the fat grafts.

The '795 patent is significant to Cytori in that it creates another barrier-to-entry to our US cosmetic and reconstructive surgery business, which is comprised of several products that allow surgeons to perform either autologous fat grafting or cell-enriched fat grafting. The patent is also representative of our multi-pronged IP strategy aimed at protecting both a process, such as the one covered in this new patent, and a technology, such as the '484 patent covering automated and closed, sterile systems for processing adipose tissue.

Cytori now has 11 US issued patents, 16 foreign issued patents, and more than 100 additional pending applications worldwide. Our existing patents cover the Company's core device technology which automates the process of extracting a mixed population of adipose-derived stem and regenerative cells by way of a closed, bedside system, as well as methods and uses of these cells for a variety of clinical applications.