Amedica seeks $4.5M while awaiting FDA clearance for cancellous-structure implant

January 23, 2017 – 1:32 PM | By Andrea Gonzalez | No comments yet

By Omar Ford, Staff Writer

Amedica Corp. is looking to raise $4.5 million through a public offering slated to close on Tuesday. The funding raise comes in the middle of the Salt Lake City-based company’s bid to obtain clearance for its Valeo cancellous-structure ceramic cervical (C+Csc) implant. Amedica has been waiting for the FDA to green light the device for nearly two years now. (See Medical Device Daily, Feb. 13, 2015.)

Amedica said it will use proceeds from the offering to fund research and development and commercialization activities of its product candidates, including the funding of clinical trials. It will also use funding to help build its sales and market capabilities for its products.

The company said its Valeo C+Csc implant is designed to encourage the patient’s own bone to grow into the porous structure.

Previously, FDA had inquiries regarding the firm’s CASCADE trial, a study which compared the 24-month outcomes from the C+Csc implant. The agency had questions about the outcomes at earlier time points. In November FDA, declined to award 510(k) clearance for Valeo C+Csc.

News of the denied approval of the Valeo C+Csc implant caused shares of Amedica (NASDAQ:AMDA) to drop as much as 30 percent last November. Amedica regained some ground in December, as shares jumped up by seven percent after the company said it had encouraging data for Valeo C+Csc and refiled its application with the FDA. However on Friday, shares were down as much as 4.4 percent.

“Pending approval, we believe Amedica will then commence manufacturing, marketing and sales of the product in the U.S.,” said Anita Dushyanth, an analyst with Zaks Small-Cap research. “That could be a big driver of interbody fusion device sales.”

Amedica enjoyed some success in August 2016 when it received the FDA nod for additional sizes of its Valeo II lateral lumbar interbody fusion device. The company said the cleared sizes allow for greater accommodation for a wide range of patient anatomies as well as greater stability as the shape of the implant distributes weight over a larger surface area.

Amedica’s most recent funding raise is one of several measures the company has used to garner additional capital.

In July 2016, the company brought in about $12.7 million in an underwritten public offering. And in October 2016, the company enacted significant cost-saving measures by reducing its workforce by 38 percent. The layoffs resulted in savings of about $2 million in annual cash operating expenses. The company said the action also incurred $465,000 in one-time severance and related costs, which would be recorded in the yet unreleased 4Q16 earnings.

During its most recent earnings call, Amedica CEO Sonny Bal said the company had “reduced its cash burn significantly” and “had reduced its debt.”

Bal added, “the most important task in the forthcoming months is to validate our material science and material platform through increased spine sales.”

If Amedica can gain approval for its C+Csc implant, it will still face a great deal of competition.

Zimmer Biomet Inc.’s Primagen autograft substitute is the device’s most direct competitor. The Warsaw, Ind.-based firm launched the technology last month. (See Medical Device Daily, Dec. 15, 2016.) Zimmer Biomet said Primagen offers a combination of demineralized cortical bone fibers with verified osteoinductivity and cancellous bone, providing a trabecular structure for natural bony in-growth with optimal handling and delivery characteristics.

Primagen is moldable and delivered via a syringe rather than being a solid implant like Amedica’s. It is indicated for use beyond the spine, and may be used in the repair, replacement, reconstruction or supplementation of tissue in other musculoskeletal defects.

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