Organogenesis Gets Funding to Stay in Massachusetts

Governor Deval Patrick of Massachusetts now has at least one example that his $1 billion life sciences initiative, unveiled last month at the BIO convention held in Boston, is working. Yesterday, the governor announced that Organogenesis, a private company that makes live artificial skin, has decided to stay put and expand in its home town of Canton, MA, after receiving state funding. The company had planned on leaving Massachusetts for a neighboring, less expensive New England state. But now, Massachusetts will provide the firm with $12.9 million in grants and infrastructure support, and up to $5 million in low-interest loans.

Organogenesis calls itself the world’s first profitable regenerative medicine company. Through regenerative medicine — the process of creating living, functional cells and tissues, to repair or replace organ function lost due to disease, damage or the natural aging process — Organogenesis developed its signature artificial skin product, Apligraf. Used to treat diabetic ulcers and other recurring wounds, Apligraf has been FDA approved since 1998, and today, according to the company, is used every 10 minutes in the U.S.

But it hasn’t been an easy road for Organogenesis. According to an article from today’s Boston Globe, Organogenesis, in business since the ’80s, took over a decade to get its artificial skin product to market. During that time, reports the Globe, “The stock soared and fell as Organogenesis became the object of a pitched battle among investors, with short-sellers on Wall Street trying to dampen expectations, and the company’s executives trying to keep enthusiasm high.”

Despite FDA approval for Apligraf in 1998, sales didn’t take off like Organogenesis hoped. According to the Globe, “In 2002, the company furloughed most of its employees and filed for Chapter 11 bankruptcy protection. It emerged from bankruptcy the following year, owned by a group of private investors. Its original stockholders were largely left with worthless paper.”

But new leadership and a favorable Medicare decision that increased reimbursement amounts for artificial skin put the company back on track. The Globe says Organogenesis currently has annual sales of about $50 million. And now, backed by Massachusetts’ life sciences initiative, Organogenesis is planning to add 300 jobs and expand its facilities to 250,000 square feet.

The state plan includes a 10-year, $1 billion investment package designed to enhance Massachusetts’ assets in medicine and science, and fill gaps in federal funding to ensure the state’s ability to support life sciences progress. Key to the initiative is new legislation that will strengthen the Massachusetts Life Science Center and charge it with the execution of a life sciences mission focused on science and economic development, strategic investments at critical stages of the development cycle, and collaboration with the private sector to create innovation infrastructure critical.

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