Aussie biotech Orthocell Ltd [ASX:OCC] has seen a magnificent spike in their share price today, up a whopping 21.5% at time of writing.
Results fromof their core regenerative medical solution CelGro, have led to such spikes throughout 2019, and today is no exception.
This morning, positive findings from interim clinical trials using CelGro for nerve regeneration in quadriplegic patients were released.
The results showed 96% of nerve repairs conducted using CelGro managed to restore voluntary movement to previously paralysed muscles.
Orthocell issued a trading halt on Monday pending this announcement, foreshadowing its potential dramatic effect on investor sentiment.
And clearly it wasn’t in vain.
Having previously conducted trials for CelGro’s use in bone and tendon regeneration, this trial looks at the ability of CelGro to help with nerve repair.
Today’s results are a 12-month post-surgery update of the trial’s participants.
It was concluded that improvements in muscle power at 12 months with CelGro treatment are ‘comparable to what would normally be expected at 24 months with other methods’.
As well as restoring muscle function, CelGro also helped the treated patients’ chronic nerve pain so that they ‘have either ceased or significantly reduced pain medication’.
A key element of CelGro is its ability to facilitate tensionless repair of nerve, which will reduce both surgery time as well as the risk of soft tissue damage.
As noted by leading Australian orthopaedic nerve specialist, Dr Alex O’Beirne:
‘The microsurgery required to return arm or hand function to quadriplegic patients is complex and challenging and can require multiple nerve repairs. CelGro…can prevent regenerating nerves being compressed or trapped by scar tissue.’
A product worthy of a large market
Orthocell Managing Director Paul Anderson is optimistic about how these results will affect the marketability of CelGro:
‘Off the back of these positive interim results, our team is accelerating regulatory applications in the US, EU and Australia to make this treatment accessible to the more than 700,000 people who experience nerve damage annually.’
Indeed, the addressable market for CelGro is considerable, estimated to be over $1.1 billion.
And with such successful clinical trials, investors have seen the clear potential of this small-cap, pushing Orthocell’s share price up more than 100% from last year.
This particular nerve repair trial is only 75% complete, so there could be another potential surge in share price after the final results are announced.
Of course, from there it’s a matter of selling CelGro to the biomedical market to ensure Orthocell becomes a profitable company.
But if the ‘confidence’ expressed so far by leading practitioners is anything to go by, marketing CelGro likely won’t be too difficult an issue.
It’s certainly a biotech that’s keeping our attention.
For Money Morning
PS: For a more in-depth view on what makes a biotech successful, and how you could potentially profit from it, check out this.