Stratatech, Maker of Skin-Like Tissue, To Be Sold To Mallinckrodt

Xconomy Wisconsin — 

Stratatech, a Madison, WI-based company that’s developing cell-based human tissue for treating burn wounds, has been acquired by Mallinckrodt Pharmaceuticals, the U.K.-based drugmaker said earlier this week.

Becoming part of Mallinckrodt (NYSE: MNK), which has a market cap of more than $8 billion and offices located around the world, could help speed the commercialization of the skin-like tissue Stratatech has created, which is designed to coax burn victims to naturally regrow skin.

“We believe Stratatech’s technology has the potential to transform the standard of treatment for wound care,” Mark Trudeau, president and CEO of Mallinckrodt, said in a prepared statement. “The acquisition will bring world-class Stratatech researchers with deep expertise in cell-based, differentiated regenerative medicine to Mallinckrodt’s research team.”

Rhonda Sciarra, a spokeswoman for Mallinckrodt, said in an e-mail message to Xconomy that she and others at the company “expect the Stratatech operation to remain in Madison.” Stratatech has about 50 employees, Sciarra said.

In a press release, Mallinckrodt said it expects the two sides to finalize the deal by year-end. Mallinckrodt did not disclose the purchase price or other financial terms of the acquisition.

B. Lynn Allen-Hoffmann, a researcher and professor at the University of Wisconsin-Madison, founded Stratatech in 2000. She continues to the lead the company as its CEO.

Stratatech’s core skin replacement product, StrataGraft, is a sheet of living tissue made from a type of human keratinocyte progenitor cells. In 2000, Allen-Hoffmann and colleagues wrote that a line of these cells could be “spontaneously immortalized,” or genetically transformed so that they could continue to divide and reproduce in perpetuity. The following year, Allen-Hoffmann was part of a team awarded a patent for the discovery, which was assigned to the Wisconsin Alumni Research Foundation.

StrataGraft “could be the first biological ‘off-the-shelf’ skin substitute product for treatment of severe burns,” Mallinckrodt said in the release. However, if that ends up happening, it probably won’t be until several years from now. StrataGraft is in late-stage clinical trials for “treatment of severe, deep partial thickness burns,” and the FDA’s decision on whether to approve the product may not come until 2020, according to the release.

In March 2015, Stratatech announced top-line results from a mid-stage clinical trial of StrataGraft. All but one of the 28 patients who participated in the study had their wounds completely closed within three months of being treated with the product.

Also last year, the company announced that the Biomedical Advanced Research and Development Authority (BARDA), part of the U.S. Department of Health and Human Services, had awarded it a $247 million contract. Under the terms of the contract, which was originally signed in 2013 and extended in October, Stratatech has agreed to “stockpile skin tissue, which the federal government would purchase in the event of a terrorist attack, natural disaster, or other ‘mass casualty emergency,’” as I wrote at the time.

Following this week’s acquisition announcement, Mallinckrodt said it intends to honor Stratatech’s contractual obligations to BARDA.

But there’s also a peacetime need for improved burn treatments. According to the American Burn Association, about 40,000 patients in the U.S. are hospitalized for burn injuries annually. That suggests there may be a considerable demand for StrataGraft and other products Stratatech is developing, if it can continue to advance them through clinical trials and reach the market.