Over the past decade, peripheral Quantitative Computed Tomography (pQCT ®) has replaced Dual Energy Bone Absorptiometry (DEXA or DXA) as the technology of choice for pharmaceutical research laboratories specializing in bone disorders such as osteoporosis. Unlike DXA, pQCT allows true volumetric measurement of both bones and muscles, allowing not only faster assessment of new therapeutic agents but also their impact on the entire musculoskeletal system.
The Company directly markets, sells and services in the US and Canada three models of pQCT systems for in vivo and in vitro research (XCT(tm) series with applications ranging from excised mouse bones to whole body primates). North America accounts for about 80% of the worldwide research market.
Stratec, the leader in pQCT technology, manufactures these systems in Germany for the Company and markets them directly in the rest of the world.
The Company also markets, sells and services worldwide the pDEXA® SABRE system (Small Animal Bone Research Equipment), mainly to measure body composition is small laboratory animals. Stratec also manufactures these systems exclusively for the Company.
The size of this special research niche market is only a few million dollars per year, but most sales are recurrent (a lab often purchases a new system for a new study).
Bone & Muscle Disorders / Diagnostic and Monitoring
The clinical market is usually lagging several years behind the research market. Therefore, DXA still is the ³gold standard² in the diagnostic and monitoring of bone disorders, in spite of its shortcomings. However, the two-dimensional nature of DXA technology makes it of little value in situations when parameters such as bone thickness or bone cross section area need to be measured (orthopedics) or when long bones continue to grow (pediatrics).
The Company directly markets, sells and services in the US and Canada two models of pQCT systems for clinical assessment and monitoring of bones. All systems have received 510(k)-market clearance from the FDA and are principally marketed to pediatrics and orthopedics specialties. Stratec manufactures these systems in Germany for the Company and markets them in the rest of the world.
Pain Management
The Company has acquired the perpetual exclusive license to manufacture, market, sell and service in the US and Canada the Orbasone(tm) for the reduction of pain in soft tissues (foot, ankle, shoulder, knee and elbow areas). The Orbasone is a novel technology derived from the technology used in lithotripsy for the non-invasive treatment of kidney stones (Extracorporeal Shock Wave Therapy or ESWT).
The Orbasone(tm) is well accepted in several countries in Europe and Asia, and has recently received approval from Health Canada to treat Plantar Fasciitis (foot pain). Its manufacturer granted the Company a perpetual and exclusive license to manufacture, market, sell and service the Orbasone in the US and Canada, in exchange for undertaking the approval processes in the US and in Canada. The Orbasone is now available for sale in Canada following receipt of approval from Health Canada for the treatment of pain associated with Plantar Fasciitis as a Class III device. In the U.S., it is also a Class III device subject to Pre-Market Approval (PMA) by the Food and Drug Administration (FDA). The Orbasone is not approved for sale in the US where the Company is continuing to work towards completion of a PMA application for Plantar Fasciitis. We have secured the assistance of Dr. Lowell Scott Weil, Sr., a prominent podiatrist and a former Editor-in-Chief of the official publication of the College of Foot & Ankle Surgery, to lead our multi-site clinical trials for Plantar Fasciitis. Once market approval for Plantar Fasciitis is obtained, the Company intends to seek market approval for other applications such as ³golf shoulder², knee pain, ³tennis elbow², etc The Orbasone in manufactured for the Company in the US.
The Orbasone will be directly marketed to orthopedic surgeons and podiatrists who have been expecting the availability at a reasonable price of this technology to treat patients resisting or unsuitable for surgery to alleviate pain. There are in excess of 8,000 podiatrists and 23,000 orthopedic surgeons in the U.S. and Canada. The Orbasone will also be marketed to the physicians of professional teams (baseball, football, hockey, etc.) for the reduction of pain resulting from sports injuries. Frank Thomas of the Chicago White Sox was one of the first athletes to be treated with the Orbasone by Dr. Lowell Scott Weil, Sr., a team physician.
The North American market is estimated at $200 million per year and growing rapidly. Although there is some reimbursement for the procedure, it is not a factor in pain management at this time. It is expected that specific reimbursement codes will be established in the US by early 2006. In addition to equipment sales, the Orbasone is expected to generate consumable sales as the unit uses one electrode for the treatment of each patient and the membrane needs to be replaced after the treatment of five patients. Two companies have already received PMA market approval for Plantar Fasciitis (Dornier and Healthtronics). Their systems are priced between $350,000 and $500,000. The Company plans to price its Orbasone competitively below $200,000. Three companies have received PMA market approval for Tennis Elbow, a smaller market (Siemens, Dornier and Healthtronics).
Patients with Incontinence that Benefit from Exercise
Our target here is the large incontinence market. It is well recognized that exercise of the perineal muscles can improve their strength and reduce incontinence. The VibraFlex® Rx is a patented powered exercise system that allows patients with incontinence to stimulate such muscles at a rapid (25 Hz) rate, providing them with the exercise that can reduce incontinence due to nerve and muscle deterioration caused by aging, pregnancy, childbirth, pelvic surgery or a reduction of estrogen due to menopause.
Patients with Diabetes that Benefit from Exercise
It is well known that individuals with Diabetes benefit from exercise. In particular, exercise improves blood circulation in their legs, which can reduce the risk of lower limb amputations. Unfortunately, diabetics usually are not capable of long exercise sessions, and their exercise efforts must be predictable so proper insulin levels can be maintained. The VibraFlex® Rx rapid (25 Hz) stimulation rate, and the fact that it does not tax the cardiopulmonary system, makes it well suited to their needs. The VibraFlex Rx allows people with diabetes to enjoy the benefits of exercise.
Rehabilitation and Physical Therapy
The patented Galileo(tm) 2000 powered exercise system has already penetrated the European rehabilitation and physical therapy market. It is now marketed in the US and Canada under the name of VibraFlex® Rx for the rehabilitation of muscle, tendons and ligaments, and to improve muscle strength and coordination. The VibraFlex® Rx is specifically used to:
Exercise postural muscles, joints and reflexes;
Improve muscle strength, reflexes and joint motions;
Redevelop postural muscles, joints and reflexes after injury/disease;
Reduce the pain and disability associated with Osteoarthritis; and
Allow patients with ParkinsonÕs disease to benefit from exercise that can slow the progress of the disease.
The first major U.S. rehabilitation center to use the Galileo was the Rusk Institute for Rehabilitative Medicine of New York University. In addition to routine motor and cardiac rehabilitation situations, excellent results have been obtained in connection with Parkinson¹s disease and spinal injuries. Other researchers at prominent facilities such as the Miami Project to Cure Paralysis continue to validate the results obtained in Europe regarding the beneficial effect of exercise powered by the Galileo while many rehabilitation and physical therapy centers have included the Galileo in their routine operations.
Orthometrix also markets the Leonardo(tm), a device designed to measure human performance (force, power, speed, etc) and used to monitor progress made by patients who exercise with the Galileo and VibraFlex systems.
Clinical studies using the Galileo technology have already been published in more than 30 scientific papers and in excess of 100 articles make reference to the Galileo, the VibraFlex or the proprietary Galileo vibration technology.
Products under Negotiation
The Company is constantly looking for products and/or devices to acquire for the North American market. Our strategy is to use our engineering and manufacturing relationships to complete development and/or manufacturing, our regulatory experience to get FDA market approval, and our distribution channels to access the musculoskeletal and wellness markets. The Company is currently completing the acquisition of a line of Light Therapy Devices (Beamer(tm) brand series). Such devices use light at specific wave lengths to reduce and/or eliminate pain and traumatic suffering from various physical ailments or diseases (arthritic pain; wound healing, acne scars and other skin conditions) and would be marketed though the Company¹s existing distribution channels. No agreement has been signed at this time.
2. Veterinary Market
According to a recent study performed by the American Horse Council (AHC) Foundation, there are over 6.9 million horses in the United States of America. 725,000 are racehorses, 1,974,000 are show horses, 2,970,000 are recreation horses, and 1,262,000 horses are used for work (i.e. farm, ranch, and police work) or entertainment/sport (i.e. rodeo and polo). The horse industry greatly impacts the American economy and contributes $112.1 billion to the US GDP. That's more than the motion picture business, railroad transportation, furniture and fixtures manufacturing, and tobacco product manufacturing industries.
Any horse that is subjected to heavy athletic training and/or intense physical activity will eventually experience some degree of pain in his muscles, tendons, and ligaments. Without proper treatment, these indications can worsen from acute pain to chronic pain. This will affect the horse's performance, and may eventually end the horse's career and the owner's investment. Surgery is not always the answer and has some drawbacks. It is costly and requires lengthy downtime (recovery, rest, and recuperation). EQUUS® is a veterinary medical device for performing extracorporeal shock wave therapy (ESWT) for the treatment of equine pain. This is a non-invasive procedure that required only one treatment session, which averages 50 minutes. The horse can return to his stable that very same day. ESWT has been proven effective in humans by more than 85%.
3. Sports & Fitness Market
Our goal is to establish the VibraFlex® 500 model (whole body exercise system) and Mini-VibraFlex® models (upper body exercise system) as standard exercise equipment routinely used by professional teams, personal trainers, fitness clubs, and eventually the public. The VibraFlex is a revolutionary exercise system based on the same patented vibration technology as the Galileo(tm) exercise system.
Many European athletes and professional team already use the Galileo(tm) as an inherent part of their training to increase muscle power (ski, soccer, basketball, volleyball, tennis, etc...). Users include the German National ski and volleyball teams, the German Olympic training centers and the AC of Milan National soccer team; as well as Olympic medalists such as Sven Hannawald, Martin Schmitt and Michael Uhrmann (ski jump), Astrid Kumbernuss (shot-put) and Christoph Landen (bobsled). One of the first U.S. athletes to use the Galileo system was Lance Armstrong, several times winner of the Tour de France bicycle competition. The Chicago White Sox baseball team was the first U.S. professional team to use the Galileo. The Sox have since incorporated the VibraFlex 500 in their routine training and conditioning.
The patented Galileo(tm) technology was developed for Rehabilitative Medicine and Physical Therapy to improve various conditions affecting muscle, tendons and ligaments, improve muscle strength and coordination, and blood circulation. The VibraFlex 500 has been developed to bring the powerful Galileo vibration technology to the sports & fitness industry and was introduced in December 2004. The VibraFlex 500 develops about 10% more power than the VibraFlex Rx or its predecessor, the Galileo 2000 which was initially designed for the rehabilitation and physical therapy markets. Like the VibraFlex Rx, the VibraFlex 500 is manufactured for the Company in the US. The Mini VibraFlex models are manufactured for the Company in Germany.
The Company has approached major fitness club chains. Negotiations are underway with several major fitness equipment distributors but no agreement has been signed at this time. The Company has also started signing international distribution agreements.
Although it later branched out into rehabilitation and sports medicine, this technology was originally developed to help reduce hip fracture in post menopausal women. Since it is never too early to build and maintain strong muscles and healthy bones, we also intend to market the VibraFlex 500 to the women¹s segment of the fitness market, which is growing quite rapidly today (Curves, Linda Evans, Club One, etc.). A model for the home market is also under development.
