Atrix pries open huge dental medical market

FORT COLLINS – It’s been a decade-long journey, but Atrix Laboratories Inc. now stands at the door of its destination as it awaits U.S. Food and Drug Administration approval to market Atridox, the company’s breakthrough product for the treatment of periodontal disease.

Federal approval of the product promises to transform a long-running entrepreneurial endeavor into a highly profitable company offering unique drug-delivery products with a host of applications.

A company analysis prepared this year by Montgomery Securities predicts that Atrix will generate sales of $25 million in 1998, rising to $160 million in 2001 – numbers that stand in sharp contrast to revenue of $2.8 million the company posted in 1996.

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The shift in the company’s fortune is due partly to key developments in 1996 and the early part of this year. Unable to suppress a smile, Dr. Lee Southard, president and chief scientific officer of the company, proudly rattles them off.

“Last year, we successfully completed Phase 3 clinical trials of our Atridox product, the project upon which this company was founded,” he said. “We worked closely with the FDA on the NDA (new drug application), and we anticipate a positive response within the year. We also received FDA approval of our Atrisorb Guided Tissue Regeneration Barrier, and those achievements enabled us to accomplish the third big development, which was a deal with Block Drug Co. to market these products.”

The lucrative marketing agreement with Block, a $770 million heavy hitter in the dental-products industry, is expected to bring Atrix in excess of $50 million in milestone and licensing fees over the next three to five years.

Jeffrey Purvin, vice president of marketing for Block, said the company is dedicated to serious dental medicine, and Atridox and Atrisorb are part of that strategy.

“Atrix offered us products right on target with what we were looking for,” he said. “We spent a significant amount of time looking at companies with similar products and concluded that Atrix had the best to offer.”

Block will market Atridox in the United States, Canada and parts of Europe, and Atrisorb and Atrisorb with doxycycline in the United States and Canada. The company’s interest in the products is based on their ability to treat periodontal disease in a less-costly, less-time-consuming, less-painful way than traditional treatments involving scaling and root planing.

Periodontitis is an infection caused by a buildup of bacterial plaque under the gum line, which leads to destruction of the soft tissue and bone supporting the tooth, and eventually to the loss of the tooth.

The market for the treatment of the disease, which affects as many as three out of every four people over the age of 35, tops out at $17 billion in the United States alone and is likely to increase as treatment options prompt more people to seek periodontal therapy.

Atridox was proved effective in every stage of the disease. It is a blend of Atrigel, a patented, biodegradable polymer that holds a drug and dissolves as the drug is delivered into the patient’s system, and doxycycline, a powerful antibiotic commonly used in dentistry.

The dentist mixes the two components through connecting syringes at the time of application and positions the mixture directly on the affected area. The polymer hardens, and the drug goes to work on the disease.

“It’s like dropping a nuclear bomb on the bacteria,” Southard explained. “There’s no opportunity for the disease to develop a resistance to the drug.”

Atrisorb GTR Barrier is a material that can be custom cut and placed between the tooth and gum to enhance and guide regeneration of both soft tissue and bone supporting the tooth. Reserved for severe cases, it can be used as a tool for reattaching the gum to the tooth or, when accompanied by a dose of doxycycline, can treat disease as well.

“A periodontal patient is a patient for life,” Southard said. “It’s a chronic and episodic disease requiring treatment every three to six months. Traditional treatments like scaling and root planing can take up to an hour to complete and can be quite painful. But Atridox treatments, while they do require an initial scaling procedure to scrape away accumulated plaque, only require one. Using Atridox is almost like taking the car to Jiffy Lube – it’s easy and highly effective maintenance.”

In order to avoid pitfalls encountered in the past, Atrix conducted the largest pivotal clinical studies ever held for the treatment of periodontal disease before filing the new drug application on Atridox. The FDA filing totaled 109,000 pages, bolstered by lessons learned the hard way during years of experimentation.

Atrix was born out of Vipont Pharmaceuticals Co. in 1986. Known then as Vipont Research Labs Inc., the subsidiary single-mindedly pursued the idea of treating periodontal disease with an antibiotic applied directly to the disease site.

Southard said the idea was developed by two Greeley dentists, Rod Kirk and Nick Jamison, back in 1970 and pursued through various techniques through the decade.

Southard, Jamison and two partners from Teledyne Water Pik had the idea to restart the faltering Vipont in 1982, with the goal of developing a treatment for periodontal disease at its source using the pure botanical product, sanguinarine.

The hitch: They needed $16 million to develop the product, so they created Viadent toothpaste and mouthwash and a biojet irrigator, and by 1989, had raked in $40 million from sales of those products.

Colgate-Palmolive Co. purchased Vipont in 1989, leaving the subsidiary as a stand-alone company. Shares were created and distributed to Vipont shareholders, and the small company selected the name Atrix, a derivative of the galaxy name, Atria.

By 1991, the company had raised $38 million and commenced Phase 3 tests on its periodontal product. Less than a year later, Atrix received the devastating news that the product had failed its tests. The drug-delivery system was effective but no more so used with the drug.

“This is where we were smart. You don’t expect failure, but you prepare for it,” Southard said. “We’d already developed doxycycline as an alternative antibiotic, so right away we started trials with that. We completed Phase 2 trials with outstanding success in 1994, and Phase 3 trials began in January 1995.”

Triumphant results put Atridox in line for approval by the FDA and, along with the company’s other products, opens up other possibilities.

Atrix has agreements with several companies to look into other applications of its drug-delivery system. The company is working with Fort Collins-based Heska Corp. on veterinary applications; it’s signed a feasibility study agreement with Pfizer Inc. to work on bone regeneration; it’s partnered with Gensia Pharmaceuticals Inc. to look into a 30-day drug-release system for the treatment of prostate cancer; and it’s joined with the Arizona Cancer Institute to study drug injection directly into cancerous tumors.

“I think cancer treatment is the ultimate use of the Atrigel system,” Southard said. “We’re looking at applications for brain, head and neck, liver, ovarian, prostate and pancreatic cancers as well as osteosarcoma in animals.”

Applications for surgical adhesions, tissue and bone engineering and other dental procedures such as root canals are also being studied. And Atrix is nearing completion of renovations to a 25,000-square-foot manufacturing plant it purchased from Summit Biotechnology in the Centre for Advanced Technology in Fort Collins to accommodate the company’s inevitable growth.

Of course, money is needed to make any or all of these opportunities reality. Some comes from almost $1 million in grants Atrix received from the small-business innovative research division of the National Institutes of Health. The grants, earmarked for tissue and bone regeneration studies, are the result of well-written proposals, said Dr. Dennis Mangan, director of the infectious diseases program at NIH.

“Atrix is unusual in that they write well-crafted, articulate grants that clearly explain and justify their experiments, ” he said. “Their applications score well with reviewers, which makes them likely candidates for funding.”

Peer approval from NIH scientists could help attract more big-company support, which in turn could substantially deepen the company’s pockets.

This is good news for stockholders, whom Southard describes as anxious and testy of late, and for good reason.

“We’re undervalued,” he said. “Our fundamentals are sound, and yet our stock flounders at $10 to $11.”

Southard said the company has increased efforts to promote itself at symposia and conferences and hopes to garner more investment-banking interest.