Angstrom Medica: Securing FDA Approval and Commercializing a Nanomedical Device

Andrew S. Baluch
Nanotechnology Law & Business Journal
Volume 2, Issue 2, Article 8
May 2005

Nanotechnology could have a substantial impact on different medical products ranging from drug delivery to molecular diagnostics to bone replacement materials. However, few companies have successfully obtained Food and Drug Administration (“FDA”) approval to commercialize nanoscale materials and devices. In this article, Andrew Baluch explains how Angstrom Medica has become the first company to obtain FDA approval for a nanotechnology medical “device” and how it plans to capitalize on this achievement. The company’s history and business strategy can be used as a model for other companies seeking to market nanotechnology in the medical arena.

Introduction
Orthopedic and spinal surgery deal with the repair and replacement of damaged skeletal structures using a variety of fixation appliances and bone replacement materials. For instance, screws, plates, rods, cages, nails and pins are routinely used to repair portions of the spine or to immobilize broken bones throughout the body. Human bone is made of hydroxyapatite, a hydrated form of calcium phosphate. Although chemists can manufacture the substance quite easily, this conventional hydroxyapatite is rarely suitable to patching up broken bones. The problem is that this traditional process results in a material that is too weak to be used in the body. Therefore, conventional medical implants are usually made from other high-strength materials: medical-grade titanium, stainless steel, or complex polymers.

Dr. Edward Ahn and his colleagues at Angstrom Medica hope to change that by using a process that controls the formation of crystals of hydroxyapatite at the atomic scale. The result is a version of the calcium phosphate substance that has the strength of stainless steel. The material, dubbed NanOss^™, is composed of “nanocrystals” whose sizes are measured in billionths of a meter (there are 10 Angstroms in a nanometer). What gives NanOss™ its strength is that cracks have a more difficult time forming between the nanocrystals than they do between the larger, haphazard grains of traditional hydroxyapatite.

Angstrom Medica’s unique biomaterials provide a platform for changing technology throughout orthopedics by offering surgeons and their patients devices that have great strength upon implantation, yet are gradually replaced by living human bone.


Figure 1: Angstrom Medica’s Implantable Biomaterials

I. Angstrom Medica, Inc.
Angstrom Medica Inc. (“Angstrom”) is a privately held biomaterials and medical device company engaged in the development and commercialization of its proprietary nanocrystalline synthetic bone material—NanOss^™. Angstrom is developing NanOss^TM formulations for creating: (1) structural, weight bearing medical devices; (2) injectable, endothermic, weight bearing bone cements; and (3) programmable bioactive coatings that can act standing alone or as a carrier for pharmokinetic agents and orthobiologic materials. NanOss^TM is an innovative structural biomaterial that is highly osteoconductive and remodels over time into human bone with applications in the sports medicine, trauma, spine and general orthopaedics markets.

1. History
Angstrom was founded in June, 2001 by Dr. Edward Ahn and two fellow classmates from the Massachusetts Institute of Technology (“MIT”) in Cambridge, Massachusetts. Angstrom’s fundamental technology was based upon the thesis research conducted by Dr. Ahn, entitled, “Nanostructured Apatites as Orthopedic Biomaterials,” conducted at the Nanomaterials Research Laboratory in the Department of Chemical Engineering at MIT. In 2001, Dr. Ahn went on to win the Grand Prize from MIT’s 2001 $50k Business Plan Competition that provided the initial momentum and seed money to found the company.

The organizers of the $50k Competition provided industry and business mentors to each of the competing teams, and it was at this time that Angstrom was introduced to the principals of Seedling Enterprises, L.L.C. (“Seedling”)—John Cvinar, Andy Levine and Josh Tolkoff. Seedling provided critical input during the formation of the original business concept.

Based upon the strength and history of this relationship, Seedling provided the initial Series A investment to Angstrom in May 2002. While closing this investment, Angstrom obtained an exclusive license for the ‘591 patent on the nanostructured apatite technology from MIT. Additionally, given the lack of business experience on the part of Angstrom’s founders, Mr. Cvinar agreed to assume the responsibilities of CEO and Series A Director.

Mr. Cvinar’s primary goal was to increase the value and decrease risk in Angstrom by “proving out” the technology so as to warrant the next stage of investment. Based on limited capitalization, Mr. Cvinar and Dr. Ahn decided to invest in further development of the technology by undertaking more extensive in vitro testing and pilot animal studies.

In conjunction with the close of a Series B financing in August 2004, Mr. Cvinar stepped down as CEO to make way for Paul Mraz—a medical device executive with over fifteen years of experience in the medical device industry. Mr. Cvinar continued to represent the Series A investors on the Board. Proceeds from the Series B financing will be used to (1) complete product development; (2) scale-up manufacturing; and (3) initiate clinical trials for FDA approvals and CE marking.

2. Financing
The $30,000 Grand Prize from MIT’s 2001 $50k Business Plan Competition provided the initial momentum and seed money to found the company in the summer of 2001. Seedling Enterprises, L.L.C., provided the initial Series A investment of what became a total of $750,000 to Angstrom in May 2002. In August 2004, Angstrom successfully closed an oversubscribed private Series B round of financing raising a total of $3.7 million. All monies raised to date have come from private investors and individuals and do not include any strategic corporate investors or venture capital. Angstrom has also been granted several government grants from the National Institutes of Health (“NIH”) and the National Science Foundation (“NSF”).

II. The Technology
Angstrom has developed a new process for forming synthetic bone-based orthopedic implants utilizing nanotechnology. Employing a patented precipitation process for forming nanostructured calcium phosphates, Angstrom Medica can control crystal size and morphology of calcium phosphates (i.e., hydroxyapatite or tricalcium phosphate) to more closely match those found in human bone (Figure 2). The calcium phosphate nanocrystals possess enhanced “bioactivity” by mimicking the size and morphology of native bone crystals.

The details of the process used to create NanOss^TM are currently a trade secret. The result, however, is a precipitate of calcium phosphate nanocrystals with a predetermined size, shape and composition. These nanocrystals are retrieved from the solvent and then consolidated into fully dense, nanocrystalline, transparent monoliths that are used to form complex shapes commonly used in orthopedic surgery (e.g., screws, pins and interbody fusion devices for spinal surgery). By retaining nanocrystallinity and morphology, these forged devices are capable of delivering mechanical strength without compromising the reactive surfaces that stimulate bone cell attachment and proliferation (see Figure 3).

While previous researchers have been able to demonstrate that calcium phosphate nanocrystals can be densified into small, fully dense, nanocrystalline transparent parts, they have limited clinical utility because of size limitations. Fortunately, Angstrom has overcome this pitfall of scaling up. Their process retains the material’s biomimetic nanocrystallinity and morphology in sufficient quantities so as to make it a serious clinical alternative to traditional metallic and polymeric implants. An example of a large, fully dense, transparent monolith is shown in Figure 4. The transparency of this monolith indicates the material is defect free.

The benefits of Angstrom’s NanOss^TM calcium phosphate nanotechnology include: (1) the manufacturability of implant geometries suitable for orthopedic applications; (2) the production of a nanocrystalline calcium phosphate biomaterial with load-bearing properties; and (3) the resultant materials’ enhanced bioactivity. This final benefit arises because the nanocrystals are small enough to allow the body’s living cells to grow between and latch onto the nanocrystals. These cells are then able to engulf the crystals, break them down and remodel them into real bone. Over time, therefore, implants made of NanOss^TM should be incorporated seamlessly into the once-damaged tissue and become indistinguishable from normal, living bone.

Figure 2: Angstrom Medica reliably and consistently produces 40 to 60 nm calcium phosphate nanocrystals -- the size and shape found in human bone.

Figure 3: SEM Micrograph of Angstrom Medica's nanostructured calcium phosphate biomaterial after forging. The size and shape of the synthetic bone nanocrystals before and after forging are similar, allowing implants to be strong and bioactive.

Figure 4: Large, fully dense, transparent calcium phosphate monolith.

III. Strategic Business Plan
Angstrom’s ultimate objective is to develop, manufacture, marketand sell worldwide a series of structural, nanocrystalline calcium phosphate implant systems for the spine, sports medicine, trauma and general orthopaedic markets. While NanOss^TM technology has a whole host of applications within medicine, Angstrom chose to focus on those areas that demonstrated: (1) a large unmet need in the marketplace for such a technology; (2) an acceptance of the base material chemistry; (3) a utilization of other resorbable biomaterial technologies; (4) available 510(k) FDA regulatory pathways; and (5) a very favorable financial environment. The strategic direction for Angstrom strives to maximize significant corporate milestones with limited financial resources.

1. Business Strategy
Immediately upon becoming CEO, Mr. Mraz focused on the fundamentals. An enhanced, five member Board of Directors was put in place; and key personnel were identified, bringing Angstrom’s staff up to ten. Additionally, a Scientific Advisory Board (“SAB”) was created by bringing together fifteen of the world’s leading surgeons with expertise in the areas of spinal surgery, trauma and sports medicine. The role of the SAB is to provide the company with direction related to product development, clinical trials, surgeon education and training. Additionally, these surgeons are considered the “thought leaders” in their respective industries and have the ears of many of the large corporate players who may someday be interested in Angstrom’s technology.

Perhaps more importantly, Mr. Mraz’s focus turned to the budget—or lack of one. It was clear that Angstrom’s NanOss^TM material had tremendous potential in many different areas but that any early stage company cannot be successful by trying to be “all things to all people.” Mr. Mraz’s past successes had been the result of creating measurable value and removing risk from the equation. With the help of Angstrom’s newly formed SAB, the company combed through over fifty active projects within the organization and looked for those technology platforms that were feasible, given the limited financial and human resources. The result was a technology platform with three constituent parts: (1) structural medical devices; (2) a weight bearing bone cement; and (3) a bioactive coating.

“FOCUS. FOCUS. FOCUS.” From the get go, Mr. Mraz made clear that Angstrom would develop products and not just concepts. He created the vision for a technology platform that had both short and long term product development projects and that incorporated higher and lower risk profiles within it. The strategy he laid out was simple: maximize value by achieving key milestones and taking as much risk off the table as possible. The key to Angstrom’s strategy is to move along the product development cycle as far as possible, all while maintaining focus on the key objectives.

2. Regulatory Strategy
A regulatory strategy is an integral part of formulating a strategic business plan for any company in FDA regulated markets. The Center for Devices and Radiological Health (“CDRH”) at the FDA is responsible for regulating medical devices. Devices are classified into three different categories: Class I, Class II or Class III. Class II devices need to show “substantial equivalence” to an existing commercialized device and are subject to special controls requiring a 510(k) application. The FDA typically reviews 510(k) applications in 90 days and requires an extensive history of biomechanical testing and animal test data. In contrast, Class III devices present the greatest risk and typically involve the introduction of a new material, procedure or device without a substantial equivalent in the marketplace. They are subject to review for safety and effectiveness typically involving a controlled human clinical study with significant long-term follow-up. Costs for a typical clinical study of a Class III medical device can range between $15–20 million and usually take 4-5 years to complete.

A lengthy and costly Class III investigational device exemption (“IDE”) Clinical Study can often bea significant barrier to entry for a small company. Fortunately for Angstrom, the NanOss^TM biomaterial consists simply of calcium phosphate. Calcium phosphate has been in use in the medical device world for decades, with dozens of companies currently marketing FDA approved calcium phosphate products for use in non-weight-bearing applications. The only difference is that the calcium phosphate of NanOss^TM is ordered in nanoscale grains, which makes it stronger than any other calcium phosphate previously developed. But in the eyes of FDA, it is just calcium phosphate and, therefore, falls under the category of a Class II device. Thus, Angstom’s first submission was a 510(k) for NanOss^TM as a Bone Void Filler. This 510(k) application was filed with the FDA in January, 2005 and Angstrom received clearance in February, 2005. According to FDA, NanOss^TM represents the first nanotechnology medical “device” ever to receive FDA clearance.

Angstrom’s FDA regulatory strategy is a piecewise process. It involves a series of four 510(k) FDA applications (Class II devices), beginning with the base material—NanOss^TMas a “Bone Void Filler,” and, then, systematically progressing in device complexity (i.e., Suture Anchor, ACL/PCL Interference Screw, Spinal Fusion Device). The first step is establishing a history in the FDA for the nanocrystalline calcium phosphate technology platform. Having established NanOss^TM as a Bone Void Filler, Angstrom can now build upon each mechanical, biomechanical, in vitro, and in vivo (animal) experiment that will be necessary to satisfy FDA requirements for each device.

3. Commercialization Strategy
Angstrom designed its business plan to give flexibility to commercializing its products. By choosing to develop its own proprietary suture anchors, ACL/PCL interference screws, and cervical/lumbar fusion devices for spinal surgery, Angstrom has the option to distribute these products through a variety of means: a direct sales force, an independent distributor network or by taking on a strategic partner. Furthermore, its decision to focus on the areas of spine, sports medicine and trauma allows it to choose different, independent strategies for each of these market segments. This strategy also allows for OEM or non-exclusive licensing arrangements to further supplement opportunities in the marketplace.

IV. Conclusions
Nanotechnology could have a substantial impact on medicine in general, and bone replacement materials in particular. Angstrom Medica provides the first example of a company that has successfully obtained FDA approval for a nanotechnology medical “device,” which is now on its way to market. Focus, strategic thinking and an experienced management team will provide Angstrom Medica first-to-market advantage with an innovative technology.



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