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COPLA Scaffold – rebuilding healthy joint surfaces
Often the underlying cause of joint pain is cartilage damage - an unsolved medical issue affecting numerous people and animals. With the COPLA Scaffold™, healing joint surface damage to regain healthy movement is now possible.
Cartilage – the tissue of pain-free movement
At the end of long bones lies a thin layer of tissue that does not look like much – like a frosting on a doughnut. However, that tissue, called cartilage, is the reason why we are able to move without excruciating pain. When this layer gets damaged, e.g., due to a sport accident, it has almost no capacity to heal. Unfortunately, this is when things start to go wrong. Cartilage damage is the starting point for joint degenerative diseases, such as osteoarthritis.
Cartilage-related problems are the most frequently encountered problems orthopedic surgeons face in their practice. Despite the prevalence of the problem, there are no treatments available for restoring and maintaining the original functionality of the tissue. Whatever the cause, cartilage destruction consistently results in pain and lameness, adversely affecting the lifestyle and activity levels of the afflicted. The scientific team at Askel Healthcare has developed a medical device, called the COPLA Scaffold™, providing for the first time in the world the almost unhealable tissue with the capacity to heal.
The quest for solving the enigma of cartilage damage
In 2009, a multidisciplinary team of orthopedic surgeons, material scientists, and cell biologists got together and decided to find a solution to the pressing problem of cartilage damage. During these years, we were awarded with more than €3.4 million of research funds, which clearly demonstrates the importance of this unmet medical need. After years of hard work across scientific boundaries, we discovered a solution that will benefit a large number of patients. Consequently, Askel Healthcare was founded in March 2017.
To heal the unhealable
The COPLA Scaffold™ is a medical device for cartilage repair in weight bearing joints, such as knee. It is a composite of polylactide and collagen, best described as a temporary scaffolding structure, to help build new tissue. The device is surgically implanted into the cartilage lesion, providing the correct microenvironment for the cartilage to heal while the scaffold itself gradually degrades. The structure of the scaffold is adaptive to both static and cyclic loading – it is durable but flexible. The COPLA Scaffold™ does not permanently deform under physiological loading. It functions similarly to native cartilage; that is, the COPLA Scaffold™ releases water during loading and reabsorbs it while unloaded. The COPLA Scaffold™ is highly porous and allows fluid to flow throughout the structure, thus enabling cell growth even deep inside the scaffold. The use of the COPLA Scaffold™ does not require additional growth-stimulatory drugs or other treatment augmentations – the device itself provides a supportive structure where the body’s reparative cells adhere and start the formation of new tissue. A detailed description of the features and benefits of the COPLA Scaffold™ can be found in the appendices.
Not only humans but also companion animals, such as dogs and horses, suffer from cartilage tissue -related health problems. We at Askel Healthcare believe that our beloved four-legged friends deserve the same quality medical treatment as humans. That is why we are making the COPLA Scaffold™ available for veterinary surgeons operating in the field of orthopedics. During the last three years, we have focused on animal healthcare and developed our product with the help of veterinarians to meet all the necessary requirements to be the best cartilage repair product for veterinary care. This development work with our future customers, combined with the rigorous scientific tests done during the R&D process, have given us the security to go forward and bring this innovation to animal patients. Since the route to market authorization for medical devices for human use is long, dogs and horses have the privilege to benefit first from the COPLA Scaffold™.
Focusing on the veterinary market prior to entering human market will enable us to:
- Bring a high-quality product to veterinary market to solve a large unmet medical need
- Explore the possibility to expedite human market access by utilizing the clinical results from veterinary use
Vision and mission of Askel Healthcare
Healing, not just treating
Askel Healthcare does not stop at treating symptoms; we go a step further and provide truly regenerative solutions for the long-term benefit of patients. We believe that the COPLA Scaffold™ is the most effective treatment for destructed cartilage and for the prevention of osteoarthritis. Our mission is to initially provide this exceptional treatment to veterinary surgeons globally. In the long-term, our mission is to make the COPLA Scaffold™ available to human patients.
Vår affärs- och marknadssituation
The bond between companion animals and people create unique market opportunities
Companion animals are an important part of many peoples’ lives.
- In Finland, where 35 percent of households owned at least one companion animal in 2016, there are approximately 800,000 dogs and 74,000 horses.
- In the United States, a total of 89.7 million dogs live in households as pets in 2017, while the estimated number of horses is 7.6 million.
These animals provide companionship and a sense of responsibility, demand care and attention, and respond with affection. Pet population growth can be attributed to a decline in rural attitudes to animals, and an increasing need to compensate for the fragmentation of traditional social support networks, both of which are associated with the process of urbanization. A number of studies have shown that owning a companion animal is associated with positive health benefits, such as lower blood pressure, reduced anxiety, greater psychological stability, and improved well-being. It is therefore no surprise that the bond between companion animals and people continues to strengthen and so does the market for animal healthcare.
Need in the veterinary community
The number of veterinary orthopedic procedures is on the rise due to the prevalence of animal obesity and degenerative joint diseases, as well as the high level of care that pet owners expect from their veterinary surgeon. One in five dogs will get osteoarthritis at some point, in other words, roughly 18 million dogs in the United States are affected by osteoarthritis. Over $1 billion is spent by dog owners annually to treat canine knee injuries alone. Furthermore, 60 percent of lameness problems in horses are related to osteoarthritis. Recent advances in veterinary orthopedics are starting to bridge the gap between human and veterinary medicine. As in the human medical field, veterinary healthcare includes referral clinics and hospitals where specialized veterinary surgeons attend to the more complex cases.
Surgeons are on the lookout for minimally invasive cartilage repair methods, i.e. techniques that produce minimal tissue trauma, such as arthroscopic surgery performed through a small incision with camera monitoring. Instead of extensive resection of tissue and use of non-resorbable prosthetics, the current trend is towards methods that respect natural physiology and support the self-regeneration potential of the body. Preventive intervention and consideration of the long-term benefits of treatment are on the rise. Thus, a treatment with long-term benefits that only require one minimally invasive surgery is considered optimal. The numerous approvals of products for companion animals in the last decade reflect the fact that this market segment is very attractive.
Askel Healthcare’s core technology is a medical device designed for cartilage repair. The use of the device provides a unique long-term treatment solution, unlike current methods with only symptom-relieving or temporary outcomes. Our first product is the COPLA Scaffold™ targeted to veterinary surgeons performing orthopedic surgery. The COPLA Scaffold™ is the first and only biodegradable device for cartilage repair in the veterinary market.
From Finnish Universities to international veterinary referral hospitals
Askel Healthcare´s business is based on the linkage between veterinary and human orthopedic research. Even though born as a human medical research project, the COPLA Scaffold™ fulfills all the expectations veterinary surgeons have for a solution to cartilage lesions. During the R&D phase, several top-tier private veterinary practices and teaching hospitals in Europe and the United States supported us and provided valuable feedback and collaboration. The COPLA Scaffold™ is an innovative medical device developed in a trustful relationship with the professionals of the field.
In a nutshell, our roadmap is:
- Manufacture the COPLA Scaffold™ in Finland
- Run an international clinical medical device trial in dogs (Finland) and horses (United States)
- Start initial direct sales through an early adopters network in Finland, the United Kingdom, Ireland, and the United States with feedback on the clinical results to the headquarter
- Launch in the primary market (United States) through distributor(s)
- Launch in Europe through distributor(s)
- Leverage our current product in additional species and diseases
- Acquire market authorization for the COPLA Scaffold™ for human use
- Leverage our material science, tissue-engineering, and cell biology experience for the R&D of future products
The revenue stream will evolve through new indications and markets for the COPLA Scaffold™. Primary markets are Finland, the United Kingdom, Ireland, and the United States. The offer will be extended to other European counties prior to global launch. Primary indications include shoulder OCD (osteochondritis dissecans) in dogs and stifle OCD in horses followed by an extension to all joint OCDs in both species, and focal cartilage lesions due to e.g. patella luxation and elbow dysplasia.
The global veterinary market growth is driven by clear incentives:
- The unprecedented growth of pet populations and the extension of companion animal lifespan.
- This growth in pet ownership, in turn, contributes to the rise in public concern for animal welfare and animal rights.
- High companion animal healthcare expenditure, e.g., the veterinary expenditure per household per year (mean,) was $378 for a dog and $373 for a horse in the United States in 2012.
- Growing insurance coverage; North America’s pet health insurance sector posted record growth in 2015, with insurance fees hitting $774 million for insurance policies written during the accounting period, i.e., representing a 17.2 percent increase over 2014.
- The total number of pets insured in the United States reached 1.6 million at year-end 2015, demonstrating a growth rate of 12.0 percent from 2014 to 2015.
In addition, the growth in the number of veterinary specialists and the increase in soft tissue injuries and trauma surgeries among pets are responsible for driving the overall growth of this market.
The key figures of the companion animal market are:
- The market for companion animal health products has grown by around 2.5% per annum in nominal terms since 1992 and has been the main driver of growth in the global animal healthcare market.
- The market for companion animal health is projected to reach $17.2 billion by 2021, at a CAGR (Compounded Annual Growth Rate) of 6.2% from 2016 to 2021.
- The global veterinary surgical material market is estimated to reach $1.03 billion by 2021 from $748.4 million in 2016, growing at a CAGR of 6.6% during the forecast period.
The segment of cartilage repair in veterinary medicine is new and estimates and forecasts must be deducted from other data. In United States, the size of the veterinary orthopedic market is one tenth of the human counterpart. Based on this assumption, the global veterinary cartilage repair market was $41.5 million in 2016. The following key factors of this segment are true for both human and veterinary fields:
- The cartilage repair segment is anticipated to witness the fastest growth of all orthopedic segments during the forecast period.
- The increasing prevalence of joint disorders, a rise in accident-related injuries and a growing geriatric population are anticipated to support the growth of the cartilage repair segment.
- North America is the fastest-growing region and accounts for the largest market share.
Sales and distribution
The COPLA Scaffold™ is appealing to the three main categories of actors in the field:
- Pet owners who want affordable, efficient, long-term treatments.
- Veterinarians who want reliable and innovative products that allow them to make a difference in their field and satisfy their customers.
- Distributors who want products that satisfy unmet needs in the field, preferably with a “cool factor” that makes their offer stand out.
Our initial sales will start in Q4/2017 when we will introduce the COPLA Scaffold™ directly to our existing early adopter network in Finland, the United Kingdom, Ireland, and the United States. We will offer a discount price for the first purchase in exchange for a written case report. Later, distributors will be used to supply the US market and expand the sales in Europe. This gradual approach will give us:
- Control to communicate directly to each customer and adapt our message individually at the beginning of sales operations.
- The power to make a performance-based selection of a distribution system with the aim of achieving global distribution.
- The flexibility to align sales with our production capabilities.
The company is positioned as a first mover on the market and it has the advantage to determine the price level of the product without competition. To get an understanding of the willingness and capacity to pay, we carried out a major survey with front-line veterinarians. Based on the feedback, and after discussions with major distributors in Europe and United States, we made a price offer that reflects the balance between sustainable revenue for the company and making our solution accessible to patient owners as early as possible without a financial burden. For veterinary surgeons, choosing to operate with the COPLA Scaffold™ means providing a premium service with a reasonable increase in the final price of the surgery.
Regulation, production and IPR
The veterinary medical devices segment does not carry regulatory requirements as its human counterpart does. In this field, there is no need for FDA approval nor CE marking to commercialize a new product. However, due to our desire to produce high quality products, our long-term plan of bringing the COPLA Scaffold™ to human use, and in the anticipation of future regulatory requirements in the field, we will adapt to the requirements for the production of medical devices for human use as much as possible.
The production of the COPLA Scaffold™ will take place in Tampere, Finland. We will ramp up the production during the time period from Q4/2017 to Q2/2018 and will continue to increase the production volume gradually. With the initial set up, we are able to provide products for our direct sales in selected countries (Finland, the United Kingdom, Ireland, and the United States). We will achieve full production capacity by the end of the year 2018. The production can be upscaled with only moderate investment in new equipment and recruitment of production staff.
The COPLA Scaffold™ is not patented due to strategic reasons not to reveal the specific characteristics of the production processes. All the production steps are based on years of scientific research, optimization, and hands-on expertise of the team, and therefore it is considered extremely difficult and time consuming to produce a device of similar quality with the special functional properties presented in the COPLA Scaffold™.
Cartilage ailments are currently treated through several strategies:
- symptomatic management with pain killers
- surgical treatment without repair augmentation, e.g., cartilage flap removal
- total joint prosthesis
- stem cell therapy
Most of the global animal health market is shared among 10 top players. Secondary pharmaceutical treatments dominate the market and the majority of the competition for Askel Healthcare comes through indirect routes, for example painkillers for relieving the symptoms. During recent years, the veterinary field has seen a noteworthy increase in stem cell therapies for cartilage ailments. These therapies rely on the injection of therapeutic cells into the joint cavity with the hope of cell survival and positive intervention in the course of the disease. However, appropriate support structures for cell administration and tissue growth can advance the effectiveness of cell therapy. The COPLA Scaffold™ can take this role and R&D efforts have already been made to investigate this intriguing possibility.
Our staff consists of five professionals with expertise in the fields of material science, tissue engineering, cell biology, veterinary, and orthopedic medicine. The founding team has worked together for years to bring the COPLA Scaffold™ from a research idea to a commercial product for improved patient care. We share the value of the importance of bringing academic medical innovations to the market for the benefit of the patients – the reason why we took the leap from research to entrepreneurship.
As a very young company, we are still building our staff. Our focus is especially on strengthening our board and staff with top-tier individuals with an excellent record of accomplishment in business development, sales, and marketing. Luckily, we are not alone even at present. We have an exceptional business and clinical advisory and partner network, with whom we have worked together already during the development of the COPLA Scaffold™ (for details, see the appendices).
Dr. Virpi Muhonen
Chief Executive Officer, co-founder, member of the board
Ph.D. in orthopedic cell biology, scientific focus in novel cell technologies for cartilage regeneration, with over a decade of experience in planning and executing international research projects. She is one of the founding members of the entrepreneurial society of the University of Helsinki, Helsinki Think Company.https://www.linkedin.com/in/virpimuhonen/
Dr. Anne-Marie Haaparanta
Chief Technology Officer, co-founder, chairman of the board
D.Sc. (Tech.) in biomedical engineering, scientific focus particularly on bone and cartilage tissue engineering, especially developing composite structures as scaffolds for tissue engineering applications. Developer of the original structure of the COPLA Scaffold™.https://www.linkedin.com/in/anne-marie-haaparanta/
M.Sc. in materials science and engineering. Special expertise in melt processing of plastics needed for COPLA Scaffold™ manufacturing.https://www.linkedin.com/in/laura-johansson/
M.Sc. in materials engineering. Strong competence in technical textiles and their manufacturing processes.https://www.linkedin.com/in/kaisa-laine/
Sales and marketing manager
Veterinarian with experience in sales and marketing of human and veterinarian pharmaceuticals.https://www.linkedin.com/in/constancetrouve/
Onoterade tillväxtföretag är investeringar med hög risk. Risker som finns i onoterade företag är t.ex. risken att förlora hela din investering, brist på likviditet på aktien, oregelbudna eller sällsynta utdelningar (vinstutdelning) och utspädning av din insats. Läs denna denna riskvarning noggrant innan du gör en investering.
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The operations of a company carry various risks. Moreover, as a young, innovative company, the operations carry numerous risks. Below the three most significant risk areas are described with plans to mitigate them.
The main disadvantage of using the COPLA Scaffold™ compared to the standard of care is the moderate increase in the duration of the surgery. However, when considering the expected benefits, such as a shorter rehabilitation time and long-term prevention of osteoarthritis, it is preferable to operate once for a bit longer than to obtain a poor-quality repair through a shorter operation.
All foreign materials implanted inside the body create a physiological response. If the material is biodegradable, that is, it degrades inside the body, special concers regarding the degradation products in the tissue can rise. The COPLA Scaffold™ components are naturally degraded by cells and hydrolyzed into non-toxic components.
Less-than-anticipated effectiveness and adverse reactions are always possible with any medical treatment. To mitigate this, we will carry out a comprehensive veterinary clinical medical device study while being directly monitored by an independent third party. An appropriate Ethical Board has validated the study protocol. If we receive any adverse reactions or poor performance of the COPLA Scaffold™ during the trial, we will take all actions to find out what went wrong and act on these findings. The already completed extensive pre-clinical testing leaves very little doubt of the potential of the COPLA Scaffold™ to solve the issues of cartilage repair.
The lack of a patent for the COPLA Scaffold™ can be seen as a risk. However, freedom-to-operate studies have demonstrated that we are not infringing any current patents. After a critical review of the European Patent Attorney’s search report, we made the strategic decision not to proceed to the national phase. Patenting the COPLA Scaffold™ would have required extensive narrowing of our claims, thus revealing crucial trade secrets. As mentioned previously, all the production steps are based on years of scientific research, optimization, and the hands-on expertise of the team, and therefore it is considered extremely difficult and time consuming to produce a device of similar quality with the special functional properties presented in the COPLA Scaffold™.
We are the first mover in the market, but if a large company with a lot of marketing and sales power decides to bring a similar device to the market, the market could be flooded with their product before we have time to establish our brand. To mitigate this, we have focused on strong alliances with referral centers, teaching hospitals, and leading private practices to make sure the COPLA Scaffold™ will be the standard of care for cartilage lesions in the future. In addition, the potential of using the COPLA Scaffold™ to treat other medical conditions is great, and we have already organized case studies with different indications on the request of veterinary surgeons.
To maintain our competitive edge, we will keep participating in professional events and maintain an active competition watch through all our channels. The communication between customers, sales, business strategy and manufacturing is essential to understand and answer the competition issue efficiently. The strong R&D background of the Askel Healthcare team will be utilized to broaden the product portfolio to answer further customer needs. Along with the above, Askel Healthcare was founded by individuals who care about animals, therefore creating a company culture where humanity towards all creatures is highly valued. This value is shared with our customers, hence making Askel Healthcare easy to access and to stand out from the competition.
We acknowledge that the current share issue is not enough to reach profitability due to relative large investment needs for scaling up the manufacturing. However, the current share issue will make sure that the next crucial milestones, such as starting revenue generation and executing the two clinical trials, are reached. To mitigate the financial risk, we are constructing the manufacturing facility gradually to ensure no large investments in machinery are done without a corresponding need in sales. With the proceeds from this share issue, together with loans from, for example, Tekes and Finnvera (Finnvera is a specialized financing company owned by the State of Finland and it is the official Export Credit Agency of Finland), coupled with sales revenues, we aim to reach breakeven without further equity investment; however, this may not be possible.