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BBLG: Back Pain Solution Potentially on the Way

By Brad Sorensen, CFA



There have been several reports out lately addressing the future of bone regeneration and the technologies surrounding it. We have read these reports and are excited about the market opportunity potential and the growth that has been predicted by industry insiders of between 4.5-5.5% annually. Of course, that’s an estimate and we believe that the growth rate, if a better treatment option comes to fruition, is likely to be even higher. And with a current market of roughly $3.0 billion in the orthobiologics market for spine fusion, we believe the company that comes up with a technology that provides a better outcome for back pain sufferers is likely to be rewarded handsomely.

At this point, we look across the landscape and believe that Bone Biologics (NASDAQ:BBLG) has the edge with their technology, described in more detail below. The stock, traded under the symbol BBLG on the NASDAQ has languished as of late—and we believe we know why. Updates from the company have been slow in coming and in this world of a constant flow of information, that can be frustrating. But no news doesn’t mean bad news. In fact, we view it as positive with Bone currently in the stage of gearing up for the “first in man” study that is due to be started in Australia in 2023. The fact that newsflow has been slow is positive in our view because it indicates that everything is going according to plan and no hiccups that have had to be disclosed have occurred. That doesn’t mean there won't be bumps along the way, as there are on the way to approval, but we are encouraged by the animal tests, detailed below, done to this point, as well as the vision of the management team currently in place. We are also encouraged that the FDA has indicated that NELL-1, the Bone Biologics treatment, will be reviewed as a device/drug combination with a Premarket Application filing, which is a faster and more efficient process than the typical New Drug Application.

The Bone Biologics NELL-1 technology has been reviewed by more than 45 Peer Reviewed Publications and has been tested in three animal species (rodent, sheep and nonhuman primates) and has shown to be effective and addresses some of the challenges involved in spinal fusion by:

• Inducing rapid, controlled, guided bone growth that avoids abnormal bone formation

• Forming bone in a target specific fashion later in the cascade without inducing inflammation

• Not initiating bone formation in surrounding tissue

Finally for this update, we believe investors are undervaluing both the future potential revenue of Bone and the potential that a larger company acquires the Bone Biologics technology or buys the whole company itself. With the data we have seen, and the market opportunity in the future, we believe that Bone will become more attractive to potential acquirers as we move forward. There is still some obvious risk as there’s a long runway to approval and BBLG is only appropriate for those investors with a higher risk tolerance, but we believe for those that applies to, BBLG represents a good opportunity for gains.

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