Orthocell Share Price Up 25% on FDA Approval (ASX:OCC)

Drug development is a long and tedious process, often taking years to reach commercialisation.

Small-cap biotech company Orthocell Ltd [ASX:OCC] knows this all too well, having spent years bringing their tissue repair technology — CelGro — to market.

Now though, after a whole lot of hard work, they’re finally seeing reward for effort. With their first FDA-approved product confirmed as of this morning.

News that has sent the OCC share price 25% higher.

On the market and ready to sell

The FDA has granted Orthocell the ability to market CelGro for dental bone and tissue procedures. Using their unique treatment for a range of bone regeneration operations. Which, of course, includes teeth.

Branded as ‘Striate+’ this product could lay the foundation for much bigger success. At least, that is certainly what Orthocell is hoping for. As Managing Director Paul Anderson notes:

US approval has come sooner than expected and is a significant inflection point for our Company. I am excited by this strategic milestone and the positive step it represents on our pathway to partnering Striate+ in dental GBR indications.

I look forward to working with our leading dental surgeons to introduce the new global brand, Striate+, previously branded as CelGro Dental, and to make a meaningful impact in the US market.

More importantly, as the first CelGro product, it could also open new avenues for other areas too. With Orthocell keen to try and crack the much larger and demanding nerve repair market. Which is obviously much broader than just dental procedures.

If that were to happen, you can certainly expect the market to reciprocate the move in kind. Especially after the jump from today’s news.

What’s next for Orthocell?

In the immediate future, the challenge for Orthocell is to find partners for Striate+. Getting the product into dental surgery practices and used on real patients.

Only then will they get an idea of the kind of sales this product could generate. Not only providing a return for shareholders, but also an inkling as to whether CelGro lives up to the hype.

From there, the company could then explore further opportunities. Including the aforementioned desire to break into nerve repair. A US$7.5 billion market that could offer up some serious returns for Orthocell.

So, investors will need to keep an eye out for how this tiny biotech progresses. Granted, it is a stock that still carries plenty of risk.

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Ryan Clarkson-Ledward,
For Money Morning

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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