North America Equity Research
10 May 2011
BMTI, BMTI US
Panel Docs More Onerous Than Expected; Still See
09 May 2011
Path to Approval - ALERT
FDA released the briefing documents this morning for BMTI's Thursday panel review
Medical Supplies & Devices
of Augment bone graft. The tone of the documents is more negative than expected,
with FDA raising questions around the trial design and primary endpoint, efficacy, and
longer term safety.
• BMTI is setting up for a busy Thursday and the company appears to have its
work cut out for it based on the nature of FDA’s questions in the panel documents.
While most of the topics included in this morning's documents were expected items,
the language around safety and efficacy comes across as more prosecutorial in
nature than we would have expected and has the shares down in today’s trading.
• We still see a path to a favorable panel, even after picking through the host of
FDA concerns. Company management, as well as the panel members, have had
access to this document for over a month now, and we expect the panel to be well-
educated coming into Thursday's meeting. We also expect BMTI to be prepared,
J.P. Morgan Securities LLC
and at the end of the day continue to view the risk/benefit as in favor of Augment
• Specifically, the FDA cites concerns around: (1) the trial design and use of CT
scan as the primary endpoint, as this is not the standard of care; (2) the
heterogeneous nature of patient enrollment (ankle and hindfoot fusions); (3)
efficacy, in light of trial design concerns; and (4) long term safety. Clearly the
Agency signed off on the IDE and original protocol, and we are optimistic that FDA
is increasingly comfortable with the analysis of the modified intent to treat (MITT)
vs. intent to treat (ITT) population, though these questions are also raised in the
documents. FDA does concede that BMTI has a non-inferior study, but wants further
assurance around the risk/benefit argument compared to autograft.
• Augment itself has a compelling safety profile, but today’s documents indicate the
Agency is concerned about longer term safety of the product. The risk here is FDA
makes this a "class" decision, based on other recombinants like Medtronic’s BMP
(and Amplify, which failed to win FDA approval after a split panel last summer)
which have shown a potential cancer signal. Based on good safety data for Augment,
we think an approvable recommendation with post market follow up is a very
• However, we are incrementally cautious based on FDA's tone in this morning's
documents. We do question the ability of the Agency to block a product from the
market simply because of the potential that there could theoretically be cancer risk
on longer term follow up, particularly when FDA has an approved product out there
(InFuse) with known risk. In light of the InFuse experience, we see potential for
approval with specific risk labeling (i.e. black box warnings), which would still
allow for healthy adoption in the foot and ankle space.
• Lastly, FDA cites concerns from the Data Safety Monitoring Board (DSMB) in
its report. DSMB did request additional data from BMTI on the clinical side
(reporting of non-unions), and has since signed off on the response.
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10 May 2011
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