| The Company is developing products that compete with existing products and may compete with products being developed by other companies. Competition in the development of human therapeutics is particularly intense and includes many large pharmaceutical and medical device companies, biopharmaceutical companies, specialized biotechnology firms, universities and other research institutions. Some of these competitors have extensive financial, marketing and human resources which give them a significant competitive advantage. Pharmaceutical companies have extensive experience in conductinghuman clinical trials, in obtaining regulatory approval to market products and in large-scale manufacturing. Other biopharmaceutical companies also have more resources and experience in these areas than the Company. A number of pharmaceutical companies have entered or expanded their presence in biotechnology by collaborating with these companies. The technology underlying the development of human therapeutic products is expected to continue to undergo rapid and significant advancement and change. In the future, the Company's technological and commercial success will be based on its ability to develop proprietary positions in key scientific areas and efficiently evaluate potential product opportunities. The Company's products may compete directly with various orphogenic
proteins (I.E., growth factors) being developed by certain companies for the repair of musculoskeletal tissue. Genetics Institute, Inc., Chiron Corporation, Genentech, Inc., Creative BioMolecules, Inc. and Amgen Inc. are developing recombinant morphogenic proteins for enhancing or augmenting the repair of
musculoskeletal defects. In addition, the Company believes that a number of pharmaceutical companies, such as Bristol-Myers Squibb Company, Merck & Co.,
Inc., Rhone-Poulenc Rorer Inc., Eli Lilly & Company and SmithKline Beecham Plc, are developing other recombinant human proteins (primarily growth factors) for
use in the repair of musculoskeletal defects. Other products and therapies that may compete with the Company's MSC products include various bone fill or bone replacement products such as demineralized bone matrix, hydroxyapatite and tricalcium phosphate ceramics. Certain companies, such as Osteotech, Inc., CryoLife, Inc. and LifeCell Corporation, are processing allograft musculoskeletal tissues and derivative products for the repair of tissue defects. While these products have proven to be effective in treating certain musculoskeletal injuries, their widespread use may be limited by availability of cadaver donor tissue. Other companies utilize electrical or ultrasonic stimulation devices to augment the repair of fractures-at-risk and bone non-unions. In the area of soft tissue repair, companies such as Advanced Tissue Sciences, Inc., Integra LifeSciences Corporation, Genzyme Corporation (Tissue Repair Division) and Organogenesis Inc. are pursuing projects to develop products for cartilage repair, with or without the inclusion of cultured chondrocytes. The Company believes that these approaches will not be as effective as MSC products because, unlike MSCs, they may not form the proper extracellular matrix characteristic of normal tissue formed from stem cells. A number of biotechnology and pharmaceutical companies are pursuing the development of recombinant growth factors and hormones for the treatment of osteoporosis. These companies include Chiron Corporation, Amgen Inc., Creative BioMolecules, Inc., Genetics Institute, Inc. and others. Other major pharmaceutical companies have developed or are pursuing the development of traditional drugs for the prevention of osteoporosis. The Company believes that it is the only company seeking to develop an autologous cell-based osteoporosis treatment for the regeneration of bone to reverse the course of bone loss. In addition to competing with pharmaceutical and biotechnology companies, the Company's products and technologies will also compete with those developed by academic institutions, governmental agencies and other public organizations conducting research that may discover new therapies, seek patent protection or establish collaborative arrangements for product research. The Company believes that in addition to patent position, efficacy and
price, the timing of a product's introduction may be a major factor in determining eventual commercial success and profitability. Early entry may have important advantages in gaining product acceptance and market share. Accordingly, the relative speed with which the Company can complete preclinical and clinical testing, obtain regulatory approvals and supply commercial quantities of the product is expected to have an important impact on the Company's competitive position, both in the United States and international markets. Other companiesmay succeed in developing similar products that are introduced earlier, are more
effective or are produced and marketed more effectively. There can be no assurance that research and development by others will not render any of the
Company's products obsolete or noncompetitive. |