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  • jlwbigd jlwbigd Aug 13, 2013 3:49 PM Flag

    Grafix vs Autogel

    If there is anyone left here that is serious and competent to comment on these two products.
    1.Where is Grafix with CMS?
    2.Is there a clinical study of Autogel that compares with the reported efficay for Grafix?


    Sentiment: Buy

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    • That's good news, right?
      “That's very good news for Cytomedix! Prior to the decision there was virtually no government business for AutoloGel; and the lack of government business significantly impeded uptake in the private pay market. CMS-NCD provides a pathway for reimbursement of AutoloGel to Medicare and Medicaid beneficiaries, which make up over half of the approximate 2.0 million pressure ulcers and 1.5 million diabetic foot ulcers treated in the U.S. each year”.

      On July 10, 2013, Cytomedix, Inc. CMXI announced that the Centers for Medicare and Medicaid Services (CMS) has issued proposed payment regulations under the Physician Fee Schedule (PFS) and the Hospital Outpatient Prospective Payment System (HOPPS) that include proposed guidelines covering Medicare reimbursement for AutoloGel.
      What the heck does that mean?
      Before we get into that, let's take a step back and review where we've come with respect to Medicare reimbursement and AutoloGel over the past year.
      On August 2, 2012, the CMS issued a National Coverage Determination (NCD) for autologous blood-derived products for the treatment of chronic non-healing wounds. The decision reversed nearly 20 years of non-coverage for autologous platelet rich plasma (PRP) treatments, including Cytomedix's AutoloGel - the only FDA approved PRP treatment option for wound care (view the CMS memo). Essentially, the CMS decision to cover PRP treatment options for wound care opens the door for reimbursement of AutoloGel to Medicare and Medicaid beneficiaries in both the inpatient and outpatient market.
      That's good news, right?
      That's very good news for Cytomedix! Prior to the decision there was virtually no government business for AutoloGel; and the lack of government business significantly impeded uptake in the private pay market. CMS-NCD provides a pathway for reimbursement of AutoloGel to Medicare and Medicaid beneficiaries, which make up over half of the approximate 2.0 million pressure ulcers and 1.5 million diabetic foot ulcers treated in the U.S. each year.
      That sounds like a fairly large market.
      It's an enormous market! For example, Frost & Sullivan estimates the U.S. chronic wound care market is $2.3 billion in size, with more than 6 million chronic non-healing wounds treated annually. PRP products like AutoloGel represent only a small fraction of the market share despite strong clinical and pharmacoeconomic data supporting their use.
      But don't get lost on that $2.3 billion number. Truth be told, there are dozens of alternative therapies that compete with AutoloGel, some of them commodity types of products that have established habitual use patterns or set provider contracts to encourage standardized use. So AutoloGel isn't fighting for market share of $2.3 billion. The product competes more directly with skin substitutes (~$250 million) or enzymes and growth factors (~$150 million). See this fancy chart below:
      (click to enlarge)
      But what is important to note is that there is virtually no government business for AutoloGel now. Instead, management has been focusing on private pay procedures, long-term acute care hospitals (LTAC), veterans administration (VA) facilities, and certain state Medicaid agencies. However, the lack of a national coverage decision on the product has limited uptake in this area as well. So the CMS coverage decision not only kicks open the door to Medicare and Medicaid, it also meaningfully expands private pay coverage as well as many private insurance companies follow the CMS's lead.
      Can you explain the CMS coverage, because it looks like there is still work to be done with respect to finalizing the decision?
      So CMS granted coverage to AutoloGel under its Coverage with Evidence Development (CED) program. Now I want to be clear - CED is full coverage by the government to Medicare and Medicaid beneficiaries, but the coverage comes with a stipulation that Cytomedix will continue to generate meaningful clinical data on AutoloGel to support the continued coverage over time. It's kind of like CMS saying, "Yes, but can you send us more data in a year or two so we can all feel better about this decision?"
      Remember that AutoloGel is an FDA-approved product. The FDA establishes hurdles, guidelines and regulations to protect patients from potentially dangerous experimental drugs and devices. Cytomedix cleared that hurdle, many years ago. However, use of AutoloGel to date has been limited due to a lack of reimbursement coverage. And Cytomedix is a small company with limited financial flexibility, so for years they have been stuck in Catch-22 of, "How do we generate data without coverage / How do we obtain coverage without data." Quite the conundrum. CED provides the pathway from CMS to provide the coverage in order for Cytomedix to collect additional data while selling the product on the market for a profit. It's the perfect solution.
      Can you talk a little about what data Cytomedix has generated to date?
      Sure! AutoloGel, in our view, is a potential significant leap forward in the treatment paradigm for chronic non-healing wounds. Not only is the product more effective than the more commonly used Dermagraft (~$195M in sales in 2011) and Apligraf (~$125M in sales in 2011), but it costs less. The data below was compiled by B&D Consulting in September 2007. B&D is an independent advisory and advocacy firm located in Washington. The firm completed a cost effectiveness analysis of AutoloGel compared to alternative therapies for patients with diabetic foot ulcers. Results of this study demonstrate AutoloGel offers a lower cost and better healing outcomes than the other therapies analyzed. This study was published in the Journal of Advances in Skin and Wound Care in December 2008.
      Cytomedix has conducted its own market research and clinical studies to assess the cost and effectiveness of AutoloGel when compared to readily available, and fully covered, alternative therapies. For example, included in the company's dossier requesting reconsideration on NCD in May 2011 was a number of case studies collected over the previous seven years.
      Also, prior to filing the reconsideration application, Cytomedix published a comprehensive systematic review and meta-analysis (statistical pooling) of the use of PRP gel in wound healing in ePlasty, an open access to the Journal of Plastic Surgery. Data at SAWC in April 2011 highlighted comparing the use of PRP gel (AutoloGel) and negative pressure wound therapy (NPWT) in the long-term acute care setting. Results demonstrate that PRP greatly improved the wound healing outcomes while also cutting costs associated with the overall treatment. The study was conducted at the Asheville Specialty Hospital, in Asheville, NC.
      So you're pretty confident that Cytomedix will be able to generate the necessary data in the next few quarters to satisfy the CED requirement?
      Yes. Cytomedix has already announced they are working with wound care centers around the country to build the registry program. The company will be using Intellicure to aid in the collection and analysis of the data as it is being generated. Management tells us that each use of AutoloGel will generate a profit to the company. That's important for investors to understand. CED allows Cytomedix to earn a profit as it collects the data and funnels that back to CMS for review. That's different from a traditional clinical trial, which normally cost companies money. Cytomedix will be selling AutoloGel with CMS coverage, and booking revenues as it ramps.
      Back in May 2013, when Cytomedix held its first quarter 2013 conference call, CEO Martin Rosendale said he expects to be able to treat 1,000 patients with AutoloGel in 2013 (see conference call transcript). That's a significant acceleration from the approximate 300 patients treated in 2012. I think we'll hear more about this on the company's second quarter call in early August 2013. I wouldn't be surprised to see Cytomedix either expand their sales force to start actively promoting AutoloGel, something they have not been doing prior to this year, or strike a co-promotional agreement with a larger organization in the chronic-wound market.
      Ok, so take us back to the press release last week on the proposed payment regulations.
      Sure. So investors need to understand the progression here. The process starts with CMS granting NCD. The next step is granting of the temporary reimbursement coding and claims payment instructions. CMS put this memo out in March 2013. The assignment of a Healthcare Common Procedure Coding System (HCPCS) establishes the reimbursement mechanism for physicians and other providers submitting claims for services provided to Medicare beneficiaries. The next step after that is the payment procedure. This is what Cytomedix released last week. The press release was a little bit of a mixed bag.
      With respect to physicians' offices, CMS has proposed that Medicare Administrative Contractors (MACs) determine the payment amount for AutoloGel for claims as they are submitted. Historically, Medicare contractors have paid these types of claims based on product invoices presented by the healthcare provider. That's perfect! Cytomedix will essentially get paid under the Physician Fee Schedule for what they bill - around $450 per single use. This took effect July 1, 2013. That means that Cytomedix can immediately now go out and promote AutoloGel to physicians, mostly podiatrists and wound-care specialists, for in-office use of AutoloGel and get reimbursed full price for each sales. Beautiful - the system is working!
      For hospital outpatient services, CMS has placed the reimbursement code for AutoloGel in an Ambulatory Payment Classification (APC) that provides limited reimbursement for use of the product. Therefore, under the HOPPS guideline, AutoloGel will be reimbursed only comparable to a Level-2 debridement product. The reimbursement of which is less than $100 per use. That puts Cytomedix at a significant disadvantage trying to charge $450 for a product hospitals are only authorized to reimburse at around $100 per use. Cytomedix tells us that they are already in communication with CMS on revising the APC listing to authorize reimbursement of AutoloGel similar to a skin substitute, which would put the reimbursement for the product and associated application service in the area of $875 to $1375 per use.
      If this can be accomplished by January 1, 2014, which Cytomedix management thinks it can, then AutoloGel immediately jumps from "extremely disadvantaged" on a reimbursement standpoint to "extremely advantaged" given the cost of only $450 per use and the potential for reimbursement at 2-3x that level. Products like Dermagraft and Apligraf cost $1500 or more per use, so wide-scale implementation of these new procedural codes could have a profound impact on the chronic wound market in 2014. I don't think people have realized that yet, so keep an eye on the preliminary and final CMS decision with respect to this topic coming later in the year.
      Very interesting. Anything else to note on this topic?
      Well, I think investors need to realize that these changes to the reimbursement process for AutoloGel are not incremental, they are monumental. AutoloGel is going from no reimbursement to potentially very favorable reimbursement. Cytomedix expects to see a meaningful pick-up in AutoloGel sales as soon as this quarter. Above we noted essentially two avenues for growth: in-patient hospital settings that include acute long-term care facilities and VA hospitals, and out-patient settings that include the physician's office or hospital outpatient facility. We think the market is pretty evenly split here for AutoloGel between in-patient and out-patient, and within out-patient, it's pretty even between the physician's office and the hospital facilities. So on about 75% of the market, AutoloGel is ready to go. On the proposed guidelines under HOPPS, we're optimistic this can be resolved by the start of 2014.
      Any final thoughts on Cytomedix?
      So we've been Neutral on Cytomedix since earlier in the year given some of the challenges we previously noted on enrollment in the company's Phase 2 RECOVER-Stroke trial. We love the Angel business and think that AutoloGel may finally be poised for a hockey-stick like ramp in revenues starting in 2014. We'd like a little more visibility on this ramp, an update on enrollment in the Phase 2 stroke trial, and an update on the cash position following the $27.5 million committed financing
      secured in February 2013.

      Sentiment: Strong Buy

    • Grafix is stem stell based so I really hope they have to go the distance with CMS as Cyto and all blood derives pains me to watch the price move 140 % today alone....... I said it a few months ago: Marty should take a peak at how those guys spin the facts

      Sentiment: Hold

      • 1 Reply to koko4101950
      • Someone sold and someone bought another 40k..I take it the seller is panicing..the two big buys today were with I being foolish? I sent a note to the company to ask for a clarification on the process..I know autogel works but am not sure what the healing time is compared to what OSIR reported today..then there would be cost of product questions..either way it seems to me there is a ton of business to whoever gets there first..??

        Sentiment: Buy

    • the way someone bought 40,000 share lot today after the OSIR/Grafix annoucement at the ASK...

      Sentiment: Buy