Since its inception in 1960, Lescarden has devoted its resources to fund research and development of proprietary biologic materials with a focus on wound healing, clinical skin care, osteoarthritis and cancer applications. In the ensuing years, significant studies substantiated the ability cartilage powder to function as a biological response modifier by stimulating the body's immune system. This response has significant, demonstrated benefits for chronic wound management, and has been investigated as a potential treatment for certain types of cancer. Further studies indicated that Catrix has potent anti-inflammatory properties that could also be effective against diseases such as arthritis, scleroderma and psoriasis.
With a solid clinical platform, the Company in recent years has focused its strategy toward pursuing marketing and licensing opportunities for fully developed products that have received patents and are ready for commercialization.
The Company's product line is led by Catrix Wound Dressing, a powder derived from bovine cartilage that has been shown to be effective in the management of chronic lesions and burns, and especially helpful when applied to non-healing wounds such as decubitus ulcers, venous stasis ulcers, and diabetic ulcers. The product has been approved for sale by the FDA and the Spanish Health Ministry for distribution throughout the European Union with additional registration activities proceeding in Asia.
Lescarden also derives revenue from a line of Catrix-based skin care products targeting the Plastic Surgery, Dermatology and Medical Spa markets. Sales of two nutritional supplements, Bio-Cartilage and Poly-NAG, a patented glucosamine polymer, also contribute to the Company's overall sales.
Catrix Wound Care
Background
In the early 1950's, the Company's founders discovered that cartilage powder significantly hastened the healing of surgical wounds in animals. Early clinical studies by the Company, supported by extensive product testing and refinement, led to the creation of a proprietary process for purifying bovine cartilage to produce a sterile white powder that could be used to optimize healing. The resulting product was given the brand name Catrix.
The Company believes there is persuasive evidence that Catrix functions in the body as a biological response modifier, regulating the components of the immune system. Some observed effects of Catrix on the body include:
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Acceleration of wound healing;
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Inhibition of excessive vascularization of certain tissues;
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Inhibition of proliferation of malignant cells;
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Moderation of excessive collagen synthesis by fibroblast cells
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Chronic Wound Market
It is estimated that the global market for wound care products is approximately $10 billion. This is likely to increase due to several factors:
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Demographic trends confirm that the world’s population is living longer, a significant plus factor for the Company’s Wound Dressing since it is the elderly who are especially at risk for the various ulcers and non-healing lesions for which the product provides therapy.
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There is also a steady worldwide increase in the incidences of diabetes which affects a wide range of age groups who are at increase risk of developing non-healing wounds.
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There is at present no effective treatment for non-healing wounds. This represents a growing problem for hospitals, out- patient centers and long-term care facilities. The best treatment protocols generally focus on proper wound cleaning and preparation (removal of dead tissue around the wound) and maintaining an environment that is conducive to proper healing.
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Human Clinical Trial Conducted With Catrix
Decubitus Ulcers
In 2004 a clinical study was performed in Spain by the senior nursing professionals associated with the Spanish Ulcer and Chronic Wound Advisory Panel
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The purpose of the study was to demonstrate that Catrix® Wound Dressing could achieve a significant healing effect on pressure ulcers (bed sores) and other chronic wounds that had failed to respond after months of standard wound healing treatment. The 101 lesions included in the study had resisted healing for an average treatment time of 155 days. 51 of the lesions were Stage III, or serious, while 32 lesions were deemed to be Stage IV, very serious (total loss of the skin thickness with extensive destructions, necrosis of tissue in muscle, bone or support structure.)
The conclusions of the study were emphatically positive for Catrix® Wound Dressing: after 49 days of treatment with the Dressing, 38.4% of all lesions had healed completely. Another 34.7% showed significant improvement. Of the 32 most serious Stage IV lesions, 7 had healed completely, while another 11 had improved to Stage II condition (partial loss of the skin thickness in the epidermis, dermis, or both.)
In their Summary, the administrators of the Study stated:
“…treatment with Catrix is effective in the treatment of pressure ulcers that did not heal after the application of one of several standard treatments…”
“…these results prove that the treatment with Catrix significantly reduces the treatment length, and therefore leads to a reduction in the sanitary cost in this kind of patient.”
“…it is difficult to state the reasons why Catrix was so effective in this study. Although this study does not compare Catrix with other scarring products, we must take into account that all the included pressure ulcers were previously treated with other products, vastly used and considered necessary for the treatment of pressure ulcers at the centres where the patients came from. The cures with these other products were proven to be inefficient, and sometimes to even cause wound deterioration. In all the cases, the only change from the previous treatment was the application of Catrix. We can therefore conclude that the obtained results were due to Catrix.”
In comparing the estimated cost of treating the wounds that healed, including the nursing time and materials, the investigators determined that Catrix® reduced the average cost by 40%.
Nine additional studies have been undertaken in Italy, Germany, Spain, Hungary and Poland to further establish the credibility of Catrix to heal chronic ulcerations.
Radiation Dermatitis
In May 2004 a study was undertaken to compare the efficacy of Catrix with that of hydrocolloid dressings, the standard therapy used on cancer patients treated with radiation therapy. Skin injuries caused by repeated exposure to radiation are a frequent side effect in oncology treatments. If wounds persist they not only bring discomfort and risk of infection to the patient, but can even force suspension of the radiation treatments.
Results of the study demonstrated that Catrix is more effective than hydrocolloid dressings in the treatment of wounds caused by radiodermatitis (average healing time with Catrix: 4.9 days, vs. an average of 9.0 days with hydrocolloid dressings). Both the nursing staff and patient groups gave Catrix a higher evaluation in the study.
Diabetic and Venous Ulcers
This observational study, was published in November 2004, examined the effectiveness and safety of Catrix in the treatment of diabetic and venous ulcers compared to standard treatments. 54.8% of the wounds healed in the 20 week timeframe with the average healing time being 9.3 weeks. The conclusion was that Catrix was well tolerated and effective in treating these types of lower extremity wounds.
Burns
In February 2007 a pilot study was presented in Korea demonstrating the benefits of utilizing Catrix Wound Dressing with pediatric patients suffering from 2
nd
and 3
rd
degree burns. The purpose was to evaluate whether Catrix could provide caregivers with a viable alternative to skin grafting, the standard treatment for these severe burns.
The results will be published soon. They indicate that Catrix Wound Dressing can indeed provide a healing option comparable to graft surgery without the complications and expense associated with grafting. This approach will receive further study, but it appears to offer a new, non-invasive method for treating severe burns that is safer and more cost-effective.
Many plastic surgeons that provide primary care for burn patients are already familiar with the Catrix skin care line, which they utilize to aid in healing cosmetic surgical procedures. Since these surgeons are already part of Lescarden’s customer base, they would appear to be excellent prospects to purchase the Catrix Wound Dressing to treat burn patients. Lescarden intends to capitalize on this opportunity.
Catrix Skin Care
Catrix powder is formulated into a line of skin care products designed to meet the needs of plastic surgeons, cosmetic dermatologists and their patients. The demonstrated ability of Catrix to expedite healing, reduce inflammation and enhance patient comfort following aesthetic procedures fills a unique niche in the rapidly growing market for cosmetic and anti-aging procedures.
These Catrix-based products are especially valued for their ability to provide anti-inflammatory benefits without the use of steroids which can adversely affect the skin when used for extended periods of time. According to The American Society of Aesthetic Plastic Surgery the market for cosmetic procedures in the US totaled $12.4 billion in 2005.
In April 2002, Lescarden announced that another study, published in The Journal of The American Academy of Dermatologic Surgery, had concluded that Lescarden’s Catrix 10 Ointment facilitates faster healing than conventional treatments following cosmetic surgery procedures. The study was conducted by a team headed by Maritza Perez, M.D., director of cosmetic dermatology as St. Lukes-Roosevelt Hospital Center in New York.
The Perez study focused on patients who, after completing laser resurfacing treatments on their faces, were randomly assigned to receive Catrix 10 Ointment on one side of their faces and a widely utilized over-the-counter ointment on the other side for eight consecutive days. At the completion of the test period researchers evaluated their data and were able to confirm that facial areas treated with Catrix 10 Ointment healed much faster.
“Since the Catrix 10 Ointment facilitates quicker healing, in theory patients treated with it were at less risk for the complications that open wounds imply,” said Dr. Perez. “Although the mechanism by which bovine cartilage accelerates wound healing is not completely understood, we think it may enhance and accelerate the skin’s own healing process.”
The Company has also developed a 5% Catrix Rejuvenation Cream and a 5% Catrix Lip Balm. The Cream is intended for daily use as a rejuvenating moisturizer while it is also effective in relieving symptoms associated with psoriasis, dermatitis and other skin anomalies. Domestically, sales of these products have occurred principally through dispensing physicians, skin care professionals, independent representatives, specialty retailers and via the internet.
Poly-NAG
Derived from specially processed crustacean shells, Poly-NAG is a polymeric form of glucosamine (Poly-N-Acetyl-D-Glucosamine) that is marketed by Lescarden in the anti-arthritic market as a treatment for osteoarthritis. The product has demonstrable advantages over the numerous products that compete in the glucosamine marketplace because it remains active in the body longer than competitive products.
In clinical trials at the University of North Texas Health Science Center, orally administered Poly-NAG was shown to be absorbed by the body and metabolized into glucosamine, which was measurably present in subjects’ blood serum. In addition, the tests confirmed that serum levels of glucosamine remained higher for a longer time in subjects receiving Poly-NAG, compared to subjects receiving plain NAG. Based on these results, the Company was awarded a US Patent for Poly-NAG in September, 2000. A European patent was awarded in April, 2005.
Lescarden recently engaged in two clinical studies of Poly-NAG’s effect in animals. The purpose was to better define the marketability of Poly-NAG for veterinary applications, a market where North American sales of anti-arthritic remedies are over $400 million annually. The results of these laboratory animal studies were similar to those of the human tests, confirming that Poly NAG’s activity in the organism lasts longer than the effects with standard glucosamine. This important point of differentiation should provide a meaningful market advantage when Poly-NAG is introduced into the veterinary marketplace.
The Company is currently in discussions about Poly-NAG with several domestic and foreign distribution partners in both the human and animal health markets.
Europe
The Company is continuing its presence in the European market and promoting the value of the Wound Dressing as a valuable healing asset in the treatment of burns and chronic wounds through a licensing agreement with Smith & Nephew signed in June 2009. The arrangement with Smith & Nephew has increased sales of Catrix wound dressing in Spain. The Company is pursuing several other distribution partnerships with established companies in Europe that, if finalized, will broaden the market size and sales growth potential for the Company’s products in this region.
Korea
In December 2004, Lescarden entered into a 10 year exclusive license agreement with Daewoong Pharmaceuticals, headquartered in Seoul, South Korea. Daewoong is the largest producer and marketer of over-the counter and ethical pharmaceutical products in Korea, with annual sales over $400 million. Already established in the diabetic foot ulcer segment of the market, Daewoong is expanding its product line to cover all aspects of wound treatment. The Company is working with Daewoong to secure approval from the Korean FDA to distribute Catrix pursuant to the terms of the agreement. Subject to such approval, designation of Catrix as a class IV medical device from the KFDA would yield higher levels of reimbursement but it is unclear if and when such designation will be achieved.
Government Regulation
Since the 1996 FDA approval of the Company's 510(k) application for the use of Catrix in the management of a variety of skin ulcerations, wounds and burns, the Company has focused on the development of a distribution network for its family of proprietary, market-ready products. This strategy envisions a network of licensing and distribution agreements in addition to Lescarden's own direct marketing efforts. The plan includes a complete marketing program for Catrix powder, as well as for Catrix Skin Care Products, which are being offered to cosmetic dermatologists, plastic surgeons and skin care specialists. Looking to the future, the Company believes that the observed effects of Catrix (including acceleration of wound healing, tumor inhibition and reduction, inhibition of excessive vascularization and modulation of immune system functions) coupled with an absence of toxicity, present additional promising avenues of investigation.
The production and marketing of the Company's products and its research and development activities are subject to comprehensive regulation by various federal, state and local authorities in the United States and governmental authorities of other countries in which we conduct business. Among others, the FDA, HPB (Health Canada) and the SHM (Spanish Ministry of Health) exercise regulatory authority over the development, testing, formulation, manufacture, labeling, storage, record keeping, quality control, advertising and promotion of the Company's products.
A new drug or device may not be marketed in the United States until it has satisfied rigorous testing procedures established and approved by the FDA. The drug may then be marketed only for the specific indications, uses, formulation, dosage, forms, and strengths approved by the FDA. Similar requirements are imposed by foreign regulators upon the marketing of a new drug in their respective countries.
All of the Company's contract manufacturing facilities are subject to periodic inspections by the FDA and comparable agencies from other countries. If violations of applicable regulations are discovered during these inspections, the Company may be restrained from continued marketing of the manufactured products. Such facilities are also subject to regulation regarding, among other things, occupational safety, laboratory practices, the use and handling of radio-isotopes and hazardous chemicals, prevention of illness and injury, environmental protection and hazardous substance control.
The Company also is subject to foreign regulatory authorities with respect to clinical trials and pharmaceutical sales. Whether or not FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries must be obtained prior to commencement of marketing of the product in those countries. The approval process varies from country to country and the time required may be longer or shorter than that required for FDA approval.
Raw Materials and Manufacturing
Catrix is manufactured for the Company by contract manufacturers. These manufacturers must be FDA-approved pharmaceutical manufacturing facilities. Likewise, foreign government agencies, in countries where marketing approval is sought, must also approve all such manufacturers. The Company's food supplement cartilage material, BIO-CARTILAGE, and its Poly-NAG are manufactured in the United States and Iceland. An additional manufacturer is being developed in the Western Pacific Area.
Catrix
is prepared from animal cartilage tissue. The most accessible and easily processed source is bovine tracheas collected from normal healthy beef cattle subsequent to slaughter. Tracheas are cleaned, flash frozen and delivered to qualified pharmaceutical manufacturing facilities. The cattle from which the tracheas are harvested are certified free of BSE (Bovine Spongiform Encephalitis) and the only cattle herds used as source material are located in New Zealand.
All Catrix and production procedures have been submitted in extensive detail to the FDA, the HPB in Canada, and the Spanish Health Ministry in Spain, and accepted as part of the review of the Company's official submissions with respect to studying Catrix in patients.
Intellectual Property
The Company was granted and owns, by assignment, several United States patents. There are similar patents or pending patents in various foreign countries. We also rely on trade secrets, know-how and continuing technological innovation to maintain our competitive position. We use other methods to protect our proprietary rights, including confidentiality agreements and proprietary information agreements with vendors, employees, consultants and others that may have access to proprietary information.
Competition
Competition in the wound healing and clinical skin care markets is based primarily on: product performance, including efficacy, safety, ease of use and adaptability to various modes of administration; patient compliance; price; acceptance by physicians; marketing; and distribution. The availability of patent protection and the ability to obtain government approval for testing, manufacturing and marketing are also critical factors. See "Business-Government Regulation."
Our markets are highly segmented with multi-national and regional companies competing in both the wound and skin care markets. Lescarden’s focus is to align ourselves with organizations that have established distribution networks and solid reputations in their particular specialty.
A key factor to our success will be our ability to expand our distribution network and production capabilities while we continue to enhance our existing products and technologies. Where possible, we intend to pursue patent and trademark protection for our products and processes we design and develop.
Human Resources
At August 29, 2013, the Company had one full time employee. Outside consultants are hired to coordinate the financial reporting, regulatory, production operations, quality control and customer service functions.