Not Just a Band-Aid Anymore

Not Just a Band-Aid Anymore

Maria Shepherd • Data Decision Group

What market combines advanced biologics, high levels of competition, amazing new innovations, improved patient outcomes, high levels of reimbursement and requires careful strategic thinking and planning? The market for advanced wound care products, which approached $15 billion in global sales in 2010, combines all of these factors, and more.¹

Why This Is Important

Advances in the wound care market can affect patient health and quality of life in almost every medical device segment. Commonly segmented by wound type, wound closure products are divided into surgical wound closure (sutures, staples, etc.), burns and skin ulcers. This report will focus on the skin ulcer wound care market, which can be a complication for any patient who has had major surgery and requires a long hospital stay or bed rest, and patients with skin ulcers, a common complication of diabetes, obesity, heart disease and other chronic disease states.

Innovation in AdvancedWound Care

Ulcers are a challenge for any physician to treat, and will be more prevalent as the population ages. In addition, the prevalence of obesity and diabetes continues to rise at alarming rates. Venous, arterial and diabetic ulcers are co-morbidities of these two disease states. Chronic wounds do not heal by the same processes as normal wounds, and take much longer times to heal, sometimes by an order of magnitude. In the worst case, amputation is required. It is estimated that 82,000 amputations are performed each year on U.S. patients with diabetes; approximately 50 percent of that patient population are 65 years of age or older. Diabetic foot ulcers occur in approximately 15 percent of patients withdiabetes, and of these, 24 percent of ulcers will end in amputation. Amputations in patients with diabetes are associated with a high morbidity and a five-year survival rate of 31 percent.²

Bioengineed Skin Substitutes

The competition in this market is fierce, and the space is getting more crowded as companies race to grab a piece of this growing sector. The treatment of diabetic foot ulcers is complex. Of the multiple market obstacles, leading the list is reimbursement. Randomized clinical trials are required for reimbursement in this space. To be successful, studies require clever design to support multiple applications and can take several years.

Estimated Market Shares

According to Medtech Insight, in the United States, more than 900,000 patients with diabetic foot ulcers have been diagnosed to be in the slow-healing segment, which is estimated to have a market

opportunity of approximately $3 billion.

Two of the largest players are Ireland-based Shire plc and Organogenesis Inc. in Canton, Mass. Shire’s Dermagraft product is U.S. Food and Drug Administration approved to treat diabetic foot ulcers. In August, Shire announced plans to abandon its pursuit of the Dermagraft skin substitute after a clinical trial failed to pan out. The decision came months after spending $750 million acquiring the product in its buyout of Advanced BioHealing Inc.

Kinetic Concepts Inc. (KCI) acquired LifeCell in 2008 and provides human and bovine dermal tissue that is converted to acellular matrices for tissue revascularization (KCI itself recently was the target of a $6.3 billion buyout by London, England-based private equity group Apax Partners). Prior to its acquisition by KCI, LifeCell formed a marketing agreement with Wright Medical Group Inc. for the Graftjacket Regenerative Tissue Matrix. This year, KCI announced that it would be liscensing the Graftjacket material from Wright Medical and marketing it as Graftjacket Wound, an adjunctive treatment to its current line of wound closure products.

Smith & Nephew plc has a broad offering in wound care, including advanced wound care dressings, two sustained-release silver dressings (Acticoat and Allevyn, used to help prevent and reduce the risk of infection in a variety of wounds), and collagen products.

This is an exciting market, with innovative new products taking the market, multiple players and immense complexity and cost for future players that wish to participate in this rapidly growing space.

References:

1. Marketresearch.com, Wound Care Markets 2011, June 2011

2. http://surgery.med.nyu.edu/wound/what-we-treat/diabetic-foot-ulcers

3. Medtech Insight, Biologics, The Growth Engineer in Advanced Wound Care, June/July 2011 Vol. 13, No. 6.

Author’s note: Readers are invited to submit market data and trend questions to Maria Shepherd. Periodically, selected questions will be presented in this column, withanswers from Maria. Send your questions to [email protected].

Maria Shepherd, founder of Data Decision Group, has 20 years of leadership experience in medical device and life-sciences marketing in small startups and top-tier companies. The firm quantitatively and qualitatively sizes opportunities, evaluates new technologies, and assesses prospective acquisitions. Shepherd can be reached at (617) 548-9892 oronline at [email protected] and www.ddecisiongroup.com.