The Korean regenerative biopharmaceutical firm CGBIO has entered into an exclusive agreement worth $500 million (KRW 600 billion) with Japan’s leading firm Nippon Zoki Pharmaceutical (NZP) to develop and commercialize Novosis Putty, a recombinant human bone morphogenetic protein-2 (rhBMP-2) formulation. Novosis Putty is a new treatment for lumbar spine degeneration applicable to difficult operations.Executives of CGBIO, including Jae Chun Yu, President & CEO of Daewoong Pharma, President & CEO Hyun Seung Yu, and Konishi Ryusaku, President & CEO of NZP, participated in a signing ceremony held in CGBIO’s Seoul office (Samsung-dong, Gangnam-gu) on September 18, 2019.

The development of NOVOSIS Putty has been pursued through the Korean government-funded R&D project. The Ministry of Knowledge Economy (currently, Ministry of Trade, Industry and Energy) gave a fund of KRW 3.0 billion to CGBIO from 2009 to 2014.

NOVOSIS is a novel composite bone graft material consisting of 100% hydroxyapatite ceramic with rhBMP-2. In a damaged bone, sustained release of rhBMP-2 from NOVOSIS Putty effectively contributes to the differentiation of stem cells into osteogenic cells.

The core material rhBMP-2 used in NOVOSIS Putty was locally developed by Daewoong Pharma. Thanks to the recognized technology and originality, rhBMP-2 has acquired ‘Nebotermin’ as an International Nonproprietary Name from the Word Health Organization. Moreover, rhBMP-2 is a high-purity protein material and reliable in that it is manufactured by Daewoong’s GMP biopharmaceutical production facility.

CGBIO has been engaged in developing a supporter for loading rhBMP-2, resulting in localization and mass production of bioactive ceramic material constituting the supporter. In addition, CGBIO has succeeded in developing a supporter platform technology for sustained release of rhBMP-2 and filed a patent cooperation treaty (PCT) application for rhBMP-2 formulation technology.

CGBIO’s supporter is characterized by an integrated bioreaction with less side effects than other general supporters. In 2017, CGBIO received a World Class Product of Korea for recognition of NOVOSIS Putty development and its convenience to match minimally invasive spine surgery compared to the conventional NOVOSIS version which won the 36th week IR52 Jang Young Sil Award in 2019. IR stands for Industrial Research and 52 means 52 weeks per year, namely, one item every week. Jang Young Sil was one of the greatest inventors in Korean history.

Since its foundation in Osaka in 1939, NZP has remained committed to research and development by focusing on target markets such as orthopedics and neurosurgery under the Japanese craftsmanship ‘We don’t run a business for products that are not in the first place’. NZP is a mid-sized company recognized for its expertise in the Japanese pharmaceutical industry called ‘global standard’.

Hitherto, within the Japanese pharmaceutical and medical device industry, ‘conservative perspective’ to underevaluaute the Korea’s technology has deeply prevailed, although the technology of advanced Western countries has been touted and acknowledged. Reaching an agreement between CGBIO and NZP with a long business is a ‘milestone achievement’ in that CGBIO has overcome the Japanese medical industry’s conservative mindset.

NPZ’s personnel in research, marketing, and business development, who are famous for being fastidious, evaluated the technology and business potential for NOVOSIS Putty for almost one year. In Japan whose population is aging rapidly, NPZ personnel firmly believe that this agreement will allow NPZ to tap into their strengths in orthopedics to develop the BMP-2 formulation after repeated briefings by scientific advisors from orthopedics and neurosurgery on the necessity of the product for the treatment of a lumbar spine degenerative disease. As a result, NPZ entered into an exclusive agreement with CGBIO for possible development of the formulation in Japan, according to CGBIO officials.

Since 1994, NPZ has been operating its business in China. Thus, CGBIO expects that the Japanese company will help NOVOSIS Putty’s advancement into China in the future.

“Twenty-five years ago, I started to study bone regeneration based on Japanese literatures during my post-graduate days, but our re-export of the BMP-2 formulation to Japan reminds me of old memories,” said CGBIO CEO Yu. “I am proud of the fact that our agreement has been executed with the high-class Japanese firm thanks to NOVOSIS Putty’s superior technology and product power.”

“NOVOSIS is a flagship product of CGBIO Globalia Project, with potential annual sales of KRW 2 trillion up to 2030. We plan to establish an U.S. branch office to increase our presence in North America whose annual market size is projected at 1 trillion won,” Yu added.

“We will conduct clinical trials of NOVOSIS Putty through IND approval from the U.S. Food and Drug Administration. Upon obtaining green light from the FDA, we will aggressively target the U.S. market where Medtronic’s Infuse Bone Graft is still monopolizing the market.”