Altis Biologics: From Labs to Riches?

Abstract

Doctor Nicolaas Duneas was in a quandary: as he sat in his dishevelled office at the Tshwane University of Technology (TUT), he pondered the future of his company Altis Biologics. Founded in 2002, Altis was a small biotechnology company specialising in bone regeneration. Duneas was a trusted expert in his field, and Altis represented his life's work. Now, in July 2009, the company was poised in a kind of no-man's land. Duneas still needed to complete one more set of clinical trials before he could take his product to market, and for that he needed significant capital. Feeling like a very small fish in the big pond of global pharmaceuticals, Duneas wondered just how he was going to find the right funding and strategic partners to expand his business. Was he right to launch his product locally first? And was he being too ambitious by setting his sights on the overseas market?

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1: Glossary of Terms

Biotechnology: There are several definitions of the term ‘biotechnology’. The US Department of Commerce defines it as “…the application of molecular and cellular processes to solve problems, conduct research, and create goods and services”.

The Convention on Biological Diversity (CBD) in the US defines biotechnology as any technological innovation that uses biological systems, living organisms, or derivatives thereof, to make or modify products for specific use.

The biotechnology industry is unique because it is not defined by its products, but rather by the technologies used to make them. The industry is a massive one, encompassing four major industrial areas: crop production and agriculture, environmental uses, non-food use of plants (such as biofuels) and healthcare. (Source: www.vault.com )

The development of biotechnology is divided into three main generations:

First generation biotechnology: First generation biotechnology is centuries old and includes processes such as fermentation and the use of bacteria in food, beverage and medicine production, the use of biological control agents against animal and plant diseases and pests, and microbial processes that are used for nitrogen fixation in agriculture, pollution control, bio-mining and biogas.

Second generation biotechnology: Second generation biotech, which began circa 1863, includes processes such as tissue culture, genetics, polyclonal and monoclonal antibodies, and DNA marker techniques. Tissue culture is used in, for example, the production of pathogen-free plants and artificial insemination. Polyclonal and monoclonal antibodies techniques are used in the production of medicines and for vaccine development. The DNA marker techniques are used for, for example, selection processes and diagnostics in agriculture and livestock.

Third generation biotechnology: The third generation of biotechnology is known as ‘genetic engineering’ (GE), recombinant DNA technology, ‘gene technology’ or ‘modern biotechnology’. This era began in 1972 when scientists pioneered a way of combining biochemistry in a technique that led to the birth of recombinant DNA – a modified DNA molecule created by combining DNA from two unrelated organisms. The technology has resulted in the production of genetically modified organisms (GMOs), which can be defined as organisms in which the genetic material has been altered in a way that does not occur naturally. (Source: www.biovisioneastafrica.com)

Allograft bone: Bone procured from a donor patient for grafting onto another patient in need of bone grafting. The use of allograft or ‘banked’ bone obviates the need for harvesting of autologous bone. Fresh frozen or gamma-irradiated bone still contains MBPs and is therefore both osteoinductive and osteoconductive.

Autologous bone (autograft): Patient's own bone, normally harvested by creating a second wound on the patient's iliac crest. This is often the source of more discomfort to the patient than the primary operation site. This is, however, the ideal bone graft, since it contains BMPs as well as live osteoblasts.

Biphasic material: A chemical compound that exists as a mixture of two variants of its crystal or stoichiometric structure; a two-component system.

Bone morphogenetic proteins: Natural inducers of osteogenesis (bone growth). These proteins, especially MBP-3 or osteogenin, can induce undifferentiated progenitor cells around them to differentiate into chondrocytes. Bone is formed subsequently through the natural process of endochondral ossification. BMP is thus the name given to the biologically active components of normal bone that initiate this process and induce bone formation.

Cross-linked collagen: Natural collagen whose fibres have been chemically cross-linked by bridging chemical bonds.

Demineralised bone matrix: Bone matrix whose natural mineral content has been chemically dissolved away, typically through treatment with acids.

Growth factors: Proteins that act on cells, causing them to multiply and differentiate.

Osteoblasts: Bone cells that develop in the embryonic mesenchyme during skeletal development. It differentiates from a fibroblast to function in bone tissue formation. Osteoblasts synthesise collagen and glycoproteins to form the bone matrix.

Osteogenesis: The process of bone growth and regeneration.

Osteoinduction: A biologic response where chemical signals induce bone formation. Bone morphogenetic proteins are osteoinductive.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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