Last Friday, it was announced that ASX All Ords company Orthocell Ltd (ASX: OCC) had received approval from the Food and Drug Administration (FDA) to sell its nerve product Remplir in the United States.
For investors, this news had been a long time coming. For those who haven't heard of Orthocell, it might be a good time to add it to your radar.
While Orthocell has several products, Remplir represents its largest market opportunity.
Why is Remplir so groundbreaking?
Traditional nerve repair involving a needle and thread has had a very low success rate. And over the past 60 years, there have been very few scientific advancements to improve this.
That is until Remplir came along.
Remplir offers a revolutionary approach to nerve repair. Made from collagen, it acts as an adhesive to rejoin nerves, removing many risks associated with the needle-and-thread method. Remplir is priced at around $1,380 per sheet and has a gross margin of around 90%, which makes it very profitable. It is also lightweight and easy to store, with a 3-year shelf life.
For those suffering from nerve injuries, Remplir offers a potentially life-changing solution and appears to be relatively low risk.
Remplir first received regulatory approval in Australia in 2022 after a clinical study showed an 85% success rate. Since then, it has gained regulator approval in many sophisticated markets, including Singapore. However, the main goal has been FDA approval. Last week, that goal was achieved.
Remplir and the US market
The US is a particularly lucrative market for Remplir. As reported in The Australian Financial Review, Orthocell estimates there are 30 times more nerve injuries in the US than in Australia, despite its population only being just 15 times bigger.
Orthocell estimates the total annual addressable market for nerve repair to be US$1.6 billion, with more than 700,000 patient procedures.
FDA approval wasn't granted by chance. Orthocell's board includes the likes of Australian Professor Fiona Wood. She is renowned for developing 'spray on skin' technology for the Bali Bombing victims and was the recipient of Australian of the Year in 2005. The board also includes former Australian Deputy Prime and diplomat Minister Kim Beazley, who has significant regulatory experience. These individuals place the company well to succeed in the US market as it enters the next phase.
Is it too late to buy Orthocell?
This ASX All Ords healthcare company has surged more than 230% in the last 12 months, following a series of positive updates from the company. That doesn't necessarily mean it's too late to invest. Orthocell's market capitalisation is still only around $338 million. If Remplir is successful in the US market, chances are it will be several times bigger than it is today.
