Tissue Engineering and Cell Therapy Market Outlook

The market for tissue engineering and cell therapy products is set to grow to nearly $32 billion by 2018. This figure includes bioengineered products that are themselves cells or are actively stimulating cell growth or regeneration, products that often represent a combination of biotechnology, medical device and pharmaceutical technologies. The largest segment in the overall market for regenerative medicine technologies and products comprises orthopedic applications. Other key sectors are cardiac and vascular disease, neurological diseases, diabetes, inflammatory diseases and dental decay and injury.

An overview (map) of the spectrum of clinical applications in tissue engineering and cell therapy is shown below:

Source: Report #S520

Cell therapy is defined as a process whereby new cells are introduced into tissue as a method of treating disease; the process may or may not include gene therapy. Forms of cell therapy can include: transplantation of autologous (from the patient) or allogeneic (from a donor) stem cells , transplantation of mature, functional cells, application of modified human cells used to produce a needed substance, xenotransplantation of non-human cells used to produce a needed substance, and transplantation of transdifferentiated cells derived from the patient’s differentiated cells.

Once considered a segment of biomaterial technologies, tissue engineering has evolved into its own category and now comprises a combination of cells, engineering and suitable biochemical and physiochemical factors to improve or replace biological functions. These include ways to repair or replace human tissue with applications in nearly every medical specialty. Regenerative medicine is often synonymous with tissue engineering but usually focuses on the use of stem cells.

Tissue engineering and cell therapy may be considered comprised of bioengineered products that are themselves cells or are actively stimulating cell growth or regeneration. These often comprise a combination of biotechnology, medical device and pharmaceutical technologies.

Researchers have been examining tissue engineering and cell therapy for roughly 30 years. While some products in some specialties (such as wound care) have reached market, many others are still in research and development stages. In recent years, large pharmaceutical and medical device companies have provided funding for smaller biotech companies in the hopes that some of these products and therapies will achieve a highly profitable, commercial status. In addition, some companies have been acquired by larger medical device and pharmaceutical companies looking to bring these technologies under their corporate umbrellas. Many of the remaining smaller companies received millions of privately funded dollars per year in research and development. In many cases it takes at least ten years to bring a product to the point where human clinical trials may be conducted. Because of the large amounts of capital to achieve this, several companies have presented promising technologies only to close their doors and/or sell the technology to a larger company due to lack of funds.

The goal of stem cell research is to develop therapies to treat human disease through methods other than medication. Key aspects of this research are to examine basic mechanisms of the cell cycle (including the expression of genes during the formation of embryos) as well as specialization and differentiation into human tissue, how and when the differentiation takes place and how differentiated cells may be coaxed to differentiate into a specific type of cell. In the differentiation process, stem cells are signaled to become a specific, specialized type of cell when internal signals controlled by a cell’s genes are interspersed across long strands of DNA and carry coded instructions for all the structures and functions of a cell. In addition, cell differentiation may be caused externally by use of chemicals secreted by other cells, physical contact with neighboring cells and certain molecules in the microenvironment.

The end goal of stem cell research is to develop therapies that will allow the repair or reversal of diseases that previously were largely untreatable or incurable.. These therapies include treatment of neurological conditions such as Alzheimer’s and Parkinson’s, repair or replacement of damaged organs such as the heart or liver, the growth of implants from autologous cells, and even regeneration of lost digits or limbs.

In a developing human embryo, a specific layer of cells normally become precursor cells to cells found only in the central nervous system or the digestive system or the skin, depending on the cell layer and the elements of the embryo that direct cell differentiation. Once differentiated, many of these cells can only become one kind of cell. However, researchers have discovered that adult body cells exist that are either stem cells or can be coaxed to become stem cells that have the ability to become virtually any type of human cell, thus paving the way to engineer adult stem cell that can bring about repair or regeneration of tissues or the reversal of previously incurable diseases.

Another unique characteristic of stem cells is that they are capable of self-division and self-renewal over long periods of time. Unlike muscle, blood or nerve cells, stem cells can proliferate many times. When exposed to ideal conditions in the laboratory, a relatively small sample of stem cells can eventually yield millions of cells.

There are five primary types of stem cells: totipotent early embryonic cells (which can differentiate into any kind of human cell); pluripotent blastocyst embryonic stem cells, which are found in an embryo seven days after fertilization and can become almost any kind of cell in the body; fetal stem cells, which appear after the eighth week of development; multipotent umbilical cord stem cells, which can only differentiate into a limited number of cell types; and unspecialized adult stem cells, which exist in already developed tissue (commonly nerves, blood, skin, bone and muscle) of any person after birth.


Source: MedMarket Diligence, LLC; Report #S520, “Tissue Engineering & Cell Therapy Worldwide 2009-2018.”

Developmental Timescales

Tissue engineering and cellular therapy products take years of research and many millions of dollars (averaging about $300 million, according to some reports) before they make it over the hurdles of clinical trials and into actual market launch. More than one small biotech company has burned through its money too quickly and been unable to attract enough investment to keep the doors open. The large pharmaceutical and medical device companies are watching development carefully, and have frequently made deals or entered into alliances with the biotechs, but they have learned to be cautious about footing the bill for development of a product that, in the end, may never sell.

For many of the products in development, product launch is likely to occur within five years. Exceptions include skin and certain bone and cartilage products, which are already on the market. Other products are likely to appear on the European market before launch in the United States, due to the presence of (so far) less stringent product review and approval laws in the European Union.

Even when the products are launched, take-up will be far from 100% of all patients with that particular condition. Initially, tissue engineering and cell therapy products will go to patients suffering from cancers and other life-threatening conditions, who, for example, are unable to wait any longer for a donor organ. Patients who seem to be near the end of their natural lives likely will not receive these treatments. Insurance coverage will certainly play a key role as well in the decision about who receives which treatments and when. But most importantly, physicians will be selecting who among their patients will be treated; the physicians learn about the treatments by using them, by observing the patient’s reactions, and by discussing their experiences with colleagues. In other words, the application of tissue engineering and cellular therapy will progress in a manner similar to the introduction of any new technology: through generally conservative usage by skilled, highly trained physicians dedicated to providing their patients with the best possible treatment without causing them additional harm.


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The biggest revenue streams in spine surgery are not the fastest growing

Put simply, regardless of the relative share, differences in market growth rates or other metrics, some spine surgery technologies will generate substantially more sales than others during the 2012 to 2020 timeframe.

Looking at the MedMarket Diligence, “Worldwide Spine Surgery Data Forecast, 2010-2020″, posterior pedicle screw fusion systems and artificial cervical discs will generate the largest revenue increases over this period, since even at modest growth rates the size of the penetrated market results in big gains from 2012 to 2020. In other words, while AxiaLIF represents one of the fastest growing spine surgery device markets, the aggregate change in AxiaLIF revenues from 2010 to 2020 is only $270 million versus $2.97 billion for posterior pedicle screw fusion systems,  Here a growth rate of under 10% on such a large existing market greatly eclipses the absolute impact of a dramatic growth rate (i.e., >30%) of an emerging market.

Source: MedMarket Diligence, LLC; “Spine Surgery Worldwide Data Forecast, 2010-2020.” See link.

On a country-by-country basis, these differences are more pronounced.

Minimally invasive spine surgery patient registry (SMISS)

The Society for Minimally Invasive Spine Surgery (SMISS) has established a prospective registry to track the impact of minimally invasive spine surgery on patient outcomes.  According to Globus Medical, Inc., a private manufacturer of spine implants that has agreed to fund the registry, which will be a registry for the treatment of degenerative lumbar spondylolisthesis, degenerative disc disease, spinal stenosis, and degenerative scoliosis:

The registry will capture prospective clinical data from 10 to 15 clinical sites throughout the country, up to 250 patients, utilizing an electronic data capture program which will allow for "patient portals" to facilitate data collection from anywhere an internet connection is available. Patients will be followed for a minimum of 24 months looking at Health Related Quality of Life (HRQOL) and Quality Adjusted Life Years (QALY) outcomes, the rate and incidence of peri-operative and post-operative adverse events, radiographic correction and fusion rates as well as cost of treatment with the MIS approach.

Spine surgery technologies currently represent a $13 billion global market that will grow to $23 billion by 2020.  Despite price pressure in medical technologies, growth will continue due to innovations that enable mobility and reduce pain in a rapidly growing demographic of older patients.  (See MedMarket Diligence Report #M520.)

Vertebral Compression Fracture Treatment Technologies

From “Worldwide Spine Surgery: Products, Technologies, Markets & Opportunities, 2010-2020″, Report #M520, published 2011 by MedMarekt Diligence:

Vertebral compression fractures result primarily from osteoporosis and the consequent weakening of bones, including those in the spine. VCFs can result in tremendous back pain both in the short and long term. Because the injured vertebra is compressed and loses height, kyphotic deformity of that particular vertebra and the spine as a whole often results. Kyphosis in and of itself can produce pain long after the vertebral compression fracture has healed. As discussed earlier, several conditions can lead to osteoporosis, including estrogen deficiency, multiple myeloma, radiation therapy, and natural aging. Bones weakened either due to the primary disease process or as a result of treatment of such diseases are more prone to fracture. Common sites osteoporotic fracture include the spine, hip, and wrist.

The traditional treatment for VCFs is conservative care with back braces, bed rest, and analgesic medications for alleviating pain. Although given time the fracture eventually heals, the vertebral body remains in a collapsed, compressed state. This can result in prolonged pain, impaired function, and decreased activity. Additionally, bone and muscle loss resulting from a lack of activity can make recovery even more difficult, leading to the so-called ‘downward spiral’ of vertebral osteoporosis.

In recent years, two minimally invasive procedures have been introduced to treat VCFs: vertebroplasty and kyphoplasty. The procedures are very different, in that vertebroplasty is designed to stabilize the break, while kyphoplasty attempts to both stabilize the break and bring the collapsed vertebra back to its original height. 

Companies with products in vertebroplasty and/or kyphoplasty on the market or under development include: Alphatec, ArthroCare, AscendX, Benvenue Medical, Biomet, BoneSupport, CareFusion, Cook, DePuy Spine, Dfine, Integra Spine, Lafitt, Medtronic, Orthovita, Osseon Therapeutics, Signus, Sintea, Skeltex, Soteira, Spine Wave, SpineAlign, Stryker, Synthes, Tecres, Teknimed, Vexim.

Kyphoplasty is currently the bigger market, but trends in procedure volume, pricing and unit sales are causing the gap in global market between kyphoplasty and vertebroplasty to disappear during the forecast period.



Source: MedMarket Diligence, LLC; Report #M520.



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Evolution of spine surgery market is changing the landscape

The global market for spine surgery devices was estimated to be worth about $12.43 billion in 2010, and is forecast to reach approximately $23.90 billion by 2020, exhibiting a compound annual growth rate (CAGR) of 6.96% (2011-2020). The device segments comprising this total are:

  • Posterior Pedicle Screw Fusion Systems
  • Anterior Cervical Plate Systems
  • Anterior Thoracolumbar Plate Systems
  • Anterior Lumbar Interbody Fusion (ALIF) devices
  • Transforaminal Lumbar Interbody Fusion (TLIF) devices
  • Posterior Lumbar Interbody Fusion (PLIF) devices
  • Axial Lumbar Interbody Fusion (AxiaLIF) devices
  • Interspinous Process Spacer (ISP)
  • Cervical Artificial Discs
  • Lumbar Artificial Discs
  • Vertebroplasty
  • Balloon Kyphoplasty
  • Allografts
  • Demineralized Bone Matrix (DBM)
  • Bone Morphogenetic Proteins (BMPs)

This growth will be driven by a number of factors, including:

  • The ageing population worldwide
  • Increasing incidence of obesity
  • A growing middle class in developing countries, with the ability to pay out of pocket for spine surgery
  • Improving worldwide economy
  • Technological device enhancements, leading to improved surgical results
  • Developments in minimally invasive spine surgery (MISS) devices driving a strong increase in MISS, with its numerous advantages
  • In the US, improvements in reimbursement as clinical trials demonstrate the efficacy of treatments using the devices
  • US healthcare reform leading to medical insurance coverage for more people, allowing those suffering from intractable back pain to receive surgical treatment

As a result of aggregate growth and the differential growth rates of specific spine surgery product types, the landscape of spine surgery will change from 2011 to 2020. Although the aggregate growth is just under 7%, this is the net effect of all growth rates that range, individual product segments, from a decline of 5% in CAGR to an increase of over 30% CAGR.


Global Spine Surgery Market by Product Type, 2011 & 2020

Source: "Worldwide Spine Surgery: Products, Technologies, Markets and Opportunities, 2010-2020", Report #M520, MedMarket Diligence, LLC.

Spine surgery technologies gaining/losing ground on each other

One thing to keep in mind about the spine surgery market is that, without exception, each and every technology continues to grow from the underlying procedure volume and even if prices are declining (as they are in some cases) the resulting market is also increasing as a result of procedure volume increases.

Hence, for the sake of highlighting where the growth stands out, it is useful to see the change in each technology's share of the total market over the 2010 to 2020 period.

Below is illustrated the change in percent of total market between 2010 and 2020 for each of the key technologies in spine surgery. First among these in gaining relative share are lumbar artificial discs and posterior pedicle screw fusion systems.



Source: MedMarket Diligence, LLC; Report #M520, "Worldwide Spine Surgery: Products, Technologies, Markets and Opportunities, 2010-2020".

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Market growth versus size in spine surgery products

Often, one must see the forest before appreciating what a tree is. In the context of examining medtech markets, I am constantly interested in being able to answer the "so what?" question. For example, so what that the global spine surgery market is currently over $13 billion annually? What does this matter to the individual manufacturer of [fill in the blank] spine product? Does this manufacturer focus on pedicle screws, an interbody fusion device, an artificial disc, an allograft, a DBM?  What are the opportunities and challenges that any particular current (or hopeful) market participant faces in seeking to sustain or grow market share for their own particular market position(s)?

There are two ways to look at it, from the top down (what share of x is y now, and in the future?) or the bottom up (what are the current and forecast sales of [spine product] in [specific country]? Of course, clients need to know — as clearly as possible — where they are now, as well as where they will be in the future, given the likely outcome of their possible moves — and the net effect of those of all competitors — that they may make today.

Therefore, I tend to look at medical technology markets from the standpoint of the market size (i.e., $ million/billion revenues) of the various product segments (not just U.S., or Europe, but GLOBALLY) and the forecast growth rates (I say rates, not rate, since markets are always in flux, with variable rates) for each of the discrete components of the market. 

Illustrated below is the market for products in spine surgery, presented on two scales:  market size and market growth.




Source: MedMarket Diligence Report #M520.

This graph illustrates the context of spine surgery for all relevant participants (based on our categorization of the constituent spine market segments).

Since this data is illustrated on two axes — growth and size — it lends an opportunity for the reader to consider (a) size in the context of growth, (b) growth in the context of size and (c) both.

In the end, this type of data is useful only in framing out the relative size of the market opportunity, the importance of which is dependent on whether companies are established or emerging with new tehnology. It is the responsibility of each medtech manufacturer to determine how that specifically applies to their own situation.

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