For the third time in its history, Cerapedics Inc., the developer and supplier of i-FACTOR bone growth peptide (one of only two PMA approved bone growth compounds in the U.S. market), is expanding its corporate headquarters.
The first expansion was in 2003 when founder Andrew Tofe and a literal handful of employees moved from 12860 West Cedar Drive in Lakewood, Colorado to 11025 Dover Street in Westminster, Colorado—both northern suburbs of Denver.
Andrew Tofe, Ph.D., a nuclear scientist, had licensed an intriguing peptide technology from the University of California at San Francisco (UCSF) in 2001. Dr. Tofe started testing and developing the P-15 for dental bone growth applications. He named that company CeraMed Dental LLC.
Said Dr. Tofe at the time: “We had success growing bone in the oral cavity, which is a cesspool of bacteria and other contaminants. Imagine what you can do in orthopedics, where you have a mostly cellular, sterile environment.”
Indeed. Imagine what you could do in orthopedics.
Dr. Tofe sold CeraMed Dental to DENTSPLY International, Inc. in 2001 and renamed his company Cerapedics.
Cerapedics raised $3 million in 2003 and moved to Dover Street in Westminster.
For the next 11 years, under CEOs Andrew Tofe and Paul Mraz, Cerapedics designed, launched, enrolled, and then reported results from the first clinical study of P-15 in spine fusions. Along the way, the company raised another $40 million.
The FDA approved P-15 for cervical indications in 2014. Cerapedics began U.S. commercialization in 2016. By October 2017, more than 150 hospitals in the U.S. were using P-15, now brand named i-FACTOR™, for, specifically:
“skeletally mature patients for reconstruction of a degenerated cervical disc at one level from C3-C4 to C6-C7 following single-level discectomy for intractable radiculopathy (arm pain and/or a neurological deficit), with or without neck pain, or myelopathy due to a single-level abnormality localized to the disc space, and corresponding to at least one of the following conditions confirmed by radiographic imaging (CT, MRI, X-rays): herniated nucleus pulposus, spondylosis (defined by the presence of osteophytes), and/or visible loss of disc height as compared to adjacent levels, after failure of at least 6 weeks of conservative treatment. i-FACTOR™ Peptide Enhanced Bone Graft must be used inside an allograft bone ring and with supplemental anterior plate fixation.”
The company had 16 employees that year (2017)
In July 2018, Cerapedics closed on a $22 million sale of stock, its largest yet.
2nd Expansion
In 2019, under new CEO Glenn Kashuba, Cerapedics added 10,000 square feet to the 14,000 it already occupied in Westminster. The company’s employee count was now nearing 100.
Cervical applications for i-FACTOR were fueling extraordinary sales and corporate growth.
And Cerapedics started enrolling (July 2018) patients into a lumbar spine fusion (transforaminal lumbar interbody fusion [TLIF]) IDE clinical trial of the P-15L Peptide Enhanced Bone Graft.
In February 2022—four years after the first patient was enrolled and, yes, the COVID pandemic—Cerapedics announced that the ASPIRE study (the new name for the prospective, single-blinded, multi-center, randomized, non-inferiority pivotal IDE study of the P-15 peptide in TLIF surgery) had completed enrollment of 290 patients at 36 clinical trial sites across the U.S.
3rd Expansion
In July 2023, under new CEO and Board Chair, Valeska Schroeder, Cerapedics announced its third major expansion. Employee count as of March 2023 was 189.
The company is still at its Dover Street location in Westminster.
Two principal events seem to be prompting this investment in space and people.
First, the company closed on a $25 million financing in March 2022. In total, Cerapedics has raised just over $100 million since 2003.
Second, the ASPIRE trial of the P-15 peptide in lumbar cases is fully enrolled. Data from that study sits at the FDA and the company and investors await word on when or if they can market P-15 for lumbar indications.
According to Cerapedic’s recent public announcements, the company is expanding its Westminster space 50% and plans to add another 60 employees by the end of 2024.
Cerapedics, which is a private company, is, quite likely, the #2 supplier of bone growth products for spine applications. One important reason for Cerapedic’s success so far has been, in my opinion, its commitment to level 1 clinical studies and data.
The company, for example, supported a 72-month post approval follow-up study which, when released, provided evidence of exemplary safety and efficacy.
The company also sponsored a rigorous cost effectiveness study from which we offer the following quote:
“i-FACTOR reduced costs within the first year compared to the control group (autograft) in the ACDF IDE trial population, said Dr. Jared Ament, M.D., M.P.H., Director of Outcomes Research and Co-Director of Spine Neurosurgery at the Neurosurgery & Spine Group (N.S.G.) and President and Founder of Neuronomics, a professional corporation specializing in cost-effective analyses in the neurosciences.”
“The incremental cost-effectiveness ratio proved highly cost-effective even at 90 days ($13,333 per QALY). At 1 year and beyond, these values became negative, suggesting a ‘dominant’ economic strategy. The results are felt to be conservative since, in a real-world setting, many surgeons are using other more costly grafts in addition to autograft.”
The New/Old Cerapedics
Where does Cerapedics go from here?
Providing the FDA approves, a launch into the lumbar sector of the spine surgery market.
Continued commitment to high level clinical studies and data, which has served the company well, should continue to pay dividends.
Beyond that, much depends on where Cerapedic’s board and investors want to go. Notably, two of orthopedics most respected and experienced veterans, Anthony Koblish and Doug Kohrs, sit on the board.
If Cerapedics follows the well-trod path of other successful emerging growth companies, then another stock sale is likely. Whenever that might happen, the key question will be, to whom?
