Startup’s nanocement key to its survival in tough health care market

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SHANGHAI, China, Sept. 10, 2003 – Changsheng Liu, professor of Science and Engineering at East China University of Science and Technology (ECUST), and director of Shanghai Rebone Biomaterials Co., Ltd., spent a little more than 10 years developing a revolutionary new nanocement for regrowing bones and teeth. Now he wants to make  waves in the international biotech industry. 

 The self-setting, nanocalcium phosphate cement (CPC) takes two commercial forms:  Rebone Gutai for bones and Catai for teeth.  The cement seeks to replace such existing methods as autograft—taking part of a rib or other bone to repair a fracture, allograft—using Bone Bank donations, and synthetic replacement.  As a highly adaptable bone substitute, CPC can be applied to orthopedics, neurosurgery, plastic surgery and even dentistry.  With a high plasticity, biocompatibility and biodegradability, it is truly a leap in medical knowledge and its market potential is “big.  Very big,” says Liu.

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According to the Medical Device and Diagnostic Industry report of 2002, machine and bone grafts from donors make up more than 70 percent of the total bone-graft market in the United States, which is expected to grow to more than $1.9 billion over the next 6 years.  Aging baby boomers seeking to remain active and a corresponding increase in the number of surgeons trained in bone grafting technique are spurring the growth.  The dental industry is experiencing a similar upsurge, which bodes well for bone replacement products in general. 


Rebone owes much of its status to the special relationship it has to ECUST, a university that specifically focuses on basic research that later can be applied and turned into a commercial product.  Therefore, as Liu and his students researched at ECUST’s Biomaterial Research Institute, government grants covered the majority of the costs.  When a viable product materialized, “we realized that we needed an independent body, a legal entity, to sell and manufacture products.  We have the egg,” continues Liu, “and now we’re building the chicken.”


It’s the philosophy of a nanotech startup trying to enter the billion dollar health care business, which isn’t easy.  From Rebone’s founding in 1998 to now, it has quickly grown to more than 40 employees. Many have MBAs rather than PhDs.  Moreover, it is a private concern whose capital comes mostly from private investors. 


Domestically, Shanghai Rebone is prepared.  Hospitals in more than 30 provinces in China “are already using the product very successfully,” says Chen Tongyi, M.D., one of the doctors in charge of clinical trials at Zhongshan Hospital in Shanghai.  Rebone’s CPC was tested and approved by the National Drug Administration of China in the year 2000, and has won numerous awards including the silver medal at the 2002 INPEX Innovation Award for Medicine, held in Pittsburgh. 


Competition, however, is never far away.  There are a few companies, located in Wuhan and Beijing, already working to manufacture a knockoff product.  In the dental industry, Citai will have to work hard to unseat the popular Vitapex, a product from Neo Dental Chemical Products, Ltd., Japan.  Vitapex was a much-needed leap in cavity-filling technology when it launched, more effective and less painful, and Shanghai’s dentists were quick to switch.  Citai may be a superior material, but it uses the same injection method and is somewhat more expensive (Vitapex costs about U.S. $35 per filling, Citai more than U.S. $40).  “People are reluctant to switch,” says Dr. Deng Han, a dentist who has used Rebone’s product for more than five years, because “they don’t know about the new material.”


As Rebone looks internationally, it sees great potential for its next-generation nanocement, but even greater struggle marketing to surgeons and medical personnel.  China simply is not known for cutting-edge, superior-grade products.  Although Deng believes Vitapex’s dominance “is not a matter of import or domestic brand,” Rebone certainly has to make a rigorous effort to convince foreign buyers of its effectiveness.  In preparation for international expansion, the company has applied for and received ISO9001 and GMP certification for its manufacture of CPC. 


It will inevitably face off with international behemoth Centerpulse, a multimillion international medical device company with headquarters in Texas and Switzerland.  The company has made great strides with non-nano bone replacement products and boasts the only hip implant in the United States to be backed by a lifetime guarantee.  Other companies, like Stryker Corp.’s Orthopaedic Implants, are constantly redesigning existing products for reconstructive, trauma and spinal implants that surgeons already feel comfortable with.  


Surgeons are the key demographic.  Lasik, a mainly cosmetic surgery for the eyes, has spent millions on print, radio, and television ads touting the technology directly to consumers.  Although bone grafts sometimes have cosmetic purposes, most people undergo surgery to correct arthritic problems and bone injuries.  Convincing the medical community of CPC’s merits is Rebone’s top priority. 


Rebone isn’t daunted, however.  “As long as you have a good, proven product with great new technology,” says Chen, “that’s all that you need.”


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