Cytomedix, Inc. (OTCBB:CMXI) announced on Tuesday that they had made a formal submission to the Centers for Medicare & Medicaid Services requesting reimbursement reconsideration for their autologous platelet rich plasma ("PRP") AutoloGel System. The submission was the culmination of three years of work and data collection on the part of the company. Now, the critical decision clock starts (again) for CMXI.
PRP gel is an autologous blood product containing proteins that regulate tissue growth for wound healing and is used successfully as a therapy to address the chronic wound care problem.
The comprehensive request by CMXI proposes that there is sufficient clinical evidence to support the conclusion that the use of autologous PRP gel for chronic, non-healing pressure ulcers and diabetic foot ulcers, compared with standard wound care, significantly and reliably improves the rate of complete healing, speed and progress to healing, and quality of life in the Medicare-eligible population.
Recently, Jason Napodano, CFA of Zacks Investment Research covered the company and said the a developer of biologically active regenerative therapies for wound care's AutoloGel business was poised for growth:
"In our view, the biggest catalyst for shares of Cytomedix on the horizon is the submission for reconsideration of AutoloGel with Medicare / Medicaid (CMS)," wrote Napodano. "As a reminder, Cytomedix has been in discussion with CMS on re-filing a reimbursement dossier for the past several months. The company met face-to-face with CMS on March 16, 2011 to discuss and present a significant amount of new data on AutoloGel since the first coverage dossier was submitted, and rejected, by CMS in 2003. At that meeting, CMS asked Cytomedix to prepare a net health benefit presentation to discuss during another face-to-face meeting. This meeting took place on May 10, 2011."
The company's formal submission to the Centers for Medicare & Medicaid Services will be followed by a 90-day public comment period where CMS will review the data. Following this review, CMS will invite Cytomedix back for another meeting to discuss the data. This is followed by another 90-day data review and public comment period, after which CMS will publish a preliminary decision. Finally, roughly 90-day after that preliminary decision, CMS will finalize the decision. Therefore, a final decision on coverage reimbursement is expected during the first quarter of 2012.
Napodano sees CMS coverage as a meaningful driver of AutoloGel sales going forward. There are approximately 2.0 million pressure ulcers and 1.5 million diabetic foot ulcers each year in the U.S. where AutoloGel could be an effective product. However, approximately half of these are in patients covered by Medicare / Medicaid. Cytomedix is missing half the market opportunity due to non-coverage. With coverage, he expects AutoloGel sales to grow rapidly in 2012 and 2013.
Cytomedix, in a press release issued on Tuesday, said that it believes that the clinical evidence presented convincingly documents the effectiveness of PRP gel, including demonstrating improved and accelerated wound healing, re-animation of stalled wounds onto a positive wound healing trajectory, reduction and closure of undermining and sinus tracts/tunneling, growth of new wound bed granulation tissue, reduced infection, and reduced pain.
More specifically, Cytomedix believes that the large body of published literature on the use of PRP gel for the treatment of wounds meets the U.S. Food and Drug Administration guidance document recommendation (Guidance for Industry: Chronic Cutaneous Ulcer and Burn Wounds -- Developing Products for Treatment), the individual guidelines published by the Wound Healing Society for Pressure, Diabetic, Venous, and Arterial Insufficiency Ulcers, the Agency for Healthcare Research and Quality ("AHRQ") standard of evidence, and the Medicare Coverage Advisory Committee "(MEDCAC") wound therapy evaluation recommendations.
The body of published literature detailed in the submission includes:
A systematic review of PRP literature published over the past 10 years. The systematic review, which is generally considered to be the highest level of objective evidence, includes 21 comparative studies.
Nine PRP case series observational studies covering 323 wounds, including the 285 wounds in the Cytomedix prospective wound registry (this data has been peer-reviewed and has been accepted for publication), which demonstrates that wounds in Medicare beneficiaries had the same healing progression as wounds in non-Medicare beneficiaries.
A tabulation of the Net Health Benefit (Quality of Life) features described in the systematic review and case series, as well as a qualitative research survey conducted regarding the impact of AutoloGel on the lives of patients and their families.
"This submission is the culmination of three years of experience and data collection with the AutoloGel System in wound care. I am very pleased with the body of evidence we have built in support of our request, and am confident that the scientific and clinical data combined with the evidence of cost effectiveness meets the requirements of the guidelines to support a favorable reimbursement determination by CMS," said Martin P. Rosendale, Chief Executive Officer of Cytomedix. "This submission was joined and submitted with the signatures of five key opinion leaders in the wound care field. We believe their endorsement and support further validates the technology and enhances our prospects for a successful decision."
"A positive reimbursement decision by CMS will improve wound care for Medicare beneficiaries, lower the cost of care for CMS, improve the quality of life for patients with non-healing wounds, and reduce the number of amputations for Medicare beneficiaries with diabetes," concluded Mr. Rosendale.
Napodano has issued an outperform rating on the stock with a $1.50 target price. His full coverage report can be seen here but, in short, he beleives that company shares are undervalued.
"Management is in position to file several new 510(k) applications on Angel over the next few months," writes Napodano. "These include bone marrow aspirate processing and the retransfusion of packed red blood cells separated during the processing. We remain optimistic on the future of Cytomedix. We believe the shares are vastly undervalued today and recommend investors establish a position ahead of several near-term catalysts."
On May 17, 2011, Cytomedix reported financial results for the first quarter 2011. Total revenues in the quarter were $1.37 million, just shy of their $1.4 million estimate.
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