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Organs, heal thyselves Add to ...

It sounds like science fiction - using implants to regenerate human tissues that then become one with the body with no need for removal or replacement.

But it's just another day at the office for Tim Smith, chief executive officer of Octane Medical Group, a biotechnology firm that makes regenerative medical products.

Octane's biomaterial is already being used in spinal surgery to repair damage caused by degenerative disc diseases, while its next generation of products will be used to repair knee cartilage or heart valves damaged by diseases such as arterial sclerosis, says Mr. Smith.

The science may have taken decades to perfect, but the company's origins were more a result of timing and lucky positioning than long-term business planning.

Having worked in the orthopedics field since the mid-1990s - much of that time in collaboration with NASA and the Canadian Space Agency - Mr. Smith and his team from a previous company, Millenium Biologix, were studying why astronauts experience a loss in bone density in zero-gravity conditions.

"We were pursuing a combination of new medical technology for orthopedics," he recalls. "As part of that, we got involved in the development of bioreactors which allow us to do very specific technical investigations with cells."

Translation: Mr. Smith was shooting for a solution to a problem in the figurative stars and came across applications on terra firma. As a result, he and partner Ian Grant co-founded Octane Medical Group in 2007 and haven't looked back.

Since 2007, they've doubled their staff to more than 15 from eight, while their stable of products has grown to six from just one. According to Mr. Smith, about 2,500 orthopedic patients have benefited from those products worldwide.

Perhaps more importantly, Octane has been able to forge crucial alliances with leading Canadian universities and technology-commercialization hubs such as the Toronto-based Ontario Centres of Excellence.

It also has negotiated product-licensing deals with major multinational corporations such as the medical technology firm Medtronic Inc., based in Minneapolis.

In the latter case, Octane licenses its patented core technology to Medtronic, which uses it on, for instance, vascular repair and regeneration.

Next up in product development for Mr. Smith: tissue engineering.

"What we're doing here is not only providing the implant but also the cells that are largely responsible for the recovery," he says. "Certain patient populations don't have the necessary cell activity to do a good job of the repair, so we're not only providing the implant, but the cells that can work to allow the repair to take place."

So how, exactly, has an eight-person biotech startup from Kingston parlayed its tissue regeneration wizardry into international success? The answer, Mr. Smith says, has a great deal to do with its business model and focus.

What have been the greatest scientific and business barriers to gaining traction in this market?

We're working in a field where the product has to work in harmony with the body, and a lot of these processes aren't fully understood by the scientific community. We're trying to develop new products utilizing processes that are just now being discovered. It takes a lot of development time to fully understand how your product performs its biological role and then to optimize it so you get the best performance.

From a business perspective, regulatory hurdles are always a challenge. That's led us to build comprehensive data packages around how these products work, which are then reviewed in detail by the regulatory agencies. Marketing and education is also a challenge - we leave that to our partners.

What do Octane's experiences say about the convergence of health care and IT?

If you were to go back in time and look at what a typical biomaterials company looked like in the mid-1990s, it would be people predominantly involved in chemistry. Here at Octane, we need to have experts in many fields.

We have people who are biomaterial engineers, we have specialized biologists working on stem cells, we have plastic moulding engineers, we have software engineers, and we have machinists to make these parts.

IT is pivotal now for medical device manufacturers. Even quality control for medical systems now is so comprehensive that it's all essentially run through complex IT systems.

Who are your strongest competitors in the field?

In the tissue engineering space, our patented technology is unique, so there aren't any direct competitors in a head-to-head sense. Probably our largest competitor in regenerative medicine is traditional therapy. In orthopedics, our primary competitors are the classic metallic and plastic components - made by large companies like Johnson and Johnson - which have been used for many years.

In an era when health costs are soaring and governments are seeking ways to cut costs, how can they afford this kind of technology?

We've been able to develop our products at a price that's no more than existing technology. We're not adding to the health-care burden. Also, our products help avoid revision surgery, which can be three times more expensive than the initial procedure.

What scientific opportunities do you see ahead?

The first stage of our product line was focused on products that were part of a regenerative medicine platform. Now we're adding cells to those products to allow us to treat more complex disease conditions. We want to eventually allow those cells to be grown outside the body for a long enough period to actually allow them to create replacement tissues. Long term, we see the ability to enable processes like tissue engineering to be performed directly in a clinic.

How has your financing model and division of labour helped power Octane's growth?

My partner Ian Grant is much more involved in the production and operation side and I'm involved in planning the strategy around products and markets. He's handled that side of the business while I've been immersed in the whole startup scenario.

The company is also entirely owned by me and Ian. We don't have any third-party investors in terms of traditional venture capital partners. That was a conscious decision to pursue growth through multinational partnerships rather than trying to secure independent financing. So far, we've been successful in doing that, and the advantage is that it's allowed us to tie the financial aspects of the business to more long-range product development and manufacture-based work as opposed to focusing on shorter-range profit targets.

What we provide to multinationals, and they tend to be exclusive in a certain area of technology, is the whole process from innovation and product development and clinical studies to full manufacture for global exports. We essentially become their out-of-house development and manufacturing engine for certain areas of technology.

How can you maintain future growth?

We need to continue to invest in high-calibre people and build on our platform of products. We don't have revenue targets, we have partnership and product targets.

We feel that if we can focus on successful partnerships and deliver our products as planned, then the revenue side of the story will take care of itself.

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