Isotis Orthobiologics Inc., a developer of bone graft substitutes, is adding more workers and space in Irvine.
The company plans to hire up to 40 workers and has leased 43,538 square feet of industrial space next to its current office at 2-A Goodyear in the Irvine Spectrum.
“The demand for our product is really picking up, and we need to expand capacity,” said Pieter Wolters, Isotis’ chief executive.
Orthopedic and spinal surgeons are the primary buyers of the company’s natural and synthetic substitutes for bone grafts. The products can be used for spinal fusion, trauma repair, joint revision and surgery for head and face fractures.
Surgeons typically take bone from a patient’s hip or other area to implant near an injured site. The implanted bone contains natural proteins that help new bone form in the injured area.
Isotis said its products help the body regenerate bone without the risk of infection and minus the pain and risk of injury from harvesting bone from patients.
The company plans to hire at least 20 more manufacturing workers and another 15 to 20 office employees during the next year, Wolters said. Isotis has 115 workers.
Isotis’ operations are split between Irvine, Switzerland and the Netherlands.
Irvine is the company’s global headquarters, laboratory and manufacturing hub, Wolters said. The company’s international sales and marketing base is in Lausanne, Switzerland. Isotis also has some office space in Bilthoven, Netherlands.
Isotis trades on the Swiss stock exchange. The company was formed in 2003 when Irvine-based GenSci Orthobiologics Inc. combined with Isotis SA, a Swiss-Dutch medical device maker.
Wolters is from the Netherlands. He’s been with Isotis since 2004.
Isotis operates out of GenSci’s former facility in Irvine, Wolters said. The company checked out other areas in OC and different parts of the U.S. in its search for expansion space, he said.
“We decided at this stage that the benefit of keeping the main operation in one building was bigger than cost-savings of moving to Texas or something like that,” Wolters said.
The company wasn’t interested in the cost and headaches of operating several sites in the U.S., he said.
Moving Plans
Isotis’ production operations are set to start moving from its 26,000-square-foot space to the new location at 2-B Goodyear during the next several months. The move will be completed during the first quarter of 2007.
The company posted an operating loss of $2.5 million in the first quarter, up from $2.3 million a year earlier, as Isotis ramped up production and added sales staff.
Sales grew 25% to $9.8 million in the period. Isotis had $17.6 million in cash and short-term investments at the end of the first quarter.
Isotis’ products compete with several companies, including a big one: Medtronic Inc. of Minneapolis.
Medtronic sells spinal hardware and a product that has a genetically engineered version of a protein that spurs bone regeneration.
“They’re in our space, and they’re big,” Wolters said. “And then we have a lot of similar or smaller-size companies in our space as well, but we’re less worried about them.
“We believe that our product is the most potent one in terms of being able to let the body regenerate bone, and that’s because we have the most (human) growth factors in it.”
Taking on Metal
Wolters said the key for the company is stressing to doctors that Isotis’ products are different than traditional metal products such as artificial hips or spine cages, which don’t regenerate bone like Isotis’ products do.
“What we are selling is biology,” he said. “Our sales force has to be trained well so they are comfortable about speaking about how things work on a molecular and cell level.”
Gregg Haly and Chip Wright, brokers with CB Richard Ellis Group Inc., represented Isotis in the lease deal. Voit Commercial Brokerage LP’s Trent Walker and Sam Olmstead represented landlord New Goodyear Ltd.
