The following interview took place on November 20, 1996. The subjects include: research management; tissue transplants, processing, and bioengineering; bioadhesives and wound repair; minimally invasive surgery; and genetic engineering, transgenics, and xenografts.
CryoLife, Inc. provides tissue processing services. Based in Kennesaw, Georgia, it has annual revenues over $36 million and over 190 employees.
Dr. Brenda Smith Morse, director of new technology development since January 1996, holds six patents. She invented FibRx, one of CryoLife's bioadhesives (fibrin glues).
What strengths give CryoLife a competitive edge?
Our main business is the processing of human tissues for transplant. We also have a license for the development of porcine (nonhuman) transplant tissues, which is very involved with the bioadhesives. That's our focus.
I think we're very unique among tissue processing companies such as LifeNet [CryoLife's biggest competitor] because we've had such a strong focus on research. We have a very strong science background and a very strong engineering background.
I also think that what's been key to our success is that our marketing department and sales reps have a very close relationship with the surgeon, who is our real customer. We also have as customers the tissue procurement groups. We have a very strong relationship with them because we have to be able to procure the tissues and bring them here. And then we process them and distribute them. These strong relationships with our customers have helped us become very successful. And the surgeons that we deal with tend to be key in their areas: these are the leaders, these are the ones who are looking for something new or a better way of doing something. We've really tried to develop those relationships, and when they come up with something new, they'll tell it to us, and we can help them to develop it. I think that's been really key to our success.
What are CryoLife's goals and objectives?
To be a leader in the area of tissue transplants and tissue bioengineering and related cardiovascular devices. Our beginnings have been to develop a line of living, implantable devices. In the future, they may not necessarily be living, but certainly as close to nature as we can get.
How do you plan to achieve these goals?
As I mentioned, we're already the leader in human tissue transplants, especially with our line of heart valves: the aortic, pulmonary, and mitral. We just came out with the mitral valves. Also, for our saphenous vein. We are already well-established in the cardiovascular market. Since we've already got contacts with these surgeons and leaders, we plan to continue and expand by utilizing those sources.
Our veins are used in cases where people have multiple bypass surgeries and also for peripheral surgeries where there's no synthetic conduits available (less than 4 mm) because the synthetics clog too quickly. This is another niche market for us.
What opportunities do you see?
The cardiovascular area is growing very rapidly, and there are many opportunities. For example, now there's minimally invasive surgery where they've developed wholly different techniques for getting at the heart. They don't have to open up the sternum, and with that come different devices that will be needed and possibly even different types of tissues. They're now looking at transplanting heart valves by these small openings, so you have to put it through some sort of catheter. Our heart valves probably won't collapse that tightly, so we're looking at synthetics for collapsible heart valves which the surgeons can then put in the right position and open them up, sort of like we do stem.
It's really a time when there's a lot of growth in this area and new ways of looking at the same problem. So I think that will be an opportunity for us.
You're also expanding into orthopedics, such as reconstructive knee surgery.
Yes, we've been in that area for 4 years. We are looking for new products in that area, and certainly there are other companies that have come out with new products involving tissue engineering or the growth of cells (where they put these cells in the knee area to try to get cartilage to grow). So there's also growth in the tissue bioengineering area, genetic engineering. And there's opportunity with other cell types: In the area of stem cells, after radiation treatment for cancer, putting various cell types back in the body.
What's most important?
For us, we're one of the few biotech companies that are profitable -- and we've been profitable for a long time. We've been growing at 30% a year, so what's important is to maintain our core business: our tissue business, which is solid. We will make it as innovative as possible, we will improve it as we go along, and we will nurture that line.
We're also looking for growth in areas that aren't necessarily human tissue transplants or even tissue transplants. That's why we branched out to the bioadhesives area, where we're looking for biological products that will be useful.
What are your research goals?
To expand the human tissue market with new implants: human, xenograft, or transgenic implants. To develop our bioadhesives further. And there are some others that I can't mention.
How do you plan to maintain innovative leadership?
We will continue to interact with key surgeons, to get their ideas. My job is to inform CryoLife what new developments are out there and what new opportunities patented ideas present. There are even people who call CryoLife with ideas that they want to license. Basically, I try to keep us as up-to-date as possible and look for those little niches where CryoLife should go in and establish a leadership position.
At the beginning of a project, do you ask: "What results do we expect from this project?"
Yes, before we start a project, we have a pretty good idea of what we want to use it for. We don't know all the problems there can be, but we establish the need, and then we try to find something that will fill that need. Part of my job is to see what the competition is for doing that: how innovative is our idea, how functional and how easy to use compared to what else is out there. So we try to establish that up front, before we ever bring it inside.
Do you have a timetable? Is there a feedback loop built in?
For all of our projects we have timetables. Projects have different priorities. For key projects, I'd say we have meetings once a week, sometimes more, to update all the key people about what's going on.
Do your research teams include people from marketing, manufacturing, and finance?
They're usually not involved with the research meetings, but as the product is developed, we do involve manufacturing and quality control, to make sure our track is reasonable. I would say them more than marketing and finance. They'll have an idea of what's coming along, but that's pretty finished product before they get involved. The sales people might bring us an idea from a surgeon, but they're not at these weekly meetings.
Is there an overall review of the projects and how they're progressing?
Yes, I would say probably once or twice a year -- usually around budget time. People take stock of where we are, and we prioritize which in turn determines the frequency of subsequent meetings. And we have Microsoft Project on most of our computers, so everybody has the same format for establishing a timeline. And it's updated as we go along.
What are the various sizes of the project teams?
From 2 to 10 researchers, depending on the priority of the project. The bioadhesives group is probably the biggest, and it's about 15 people total. And if you want to include clinical research -- they're an integral part of our teams, as are regulatory affairs -- the groups are then bigger.
Are the team leaders typically PhDs?
Certainly, the research team leaders are. Once research is pretty much done and we're looking at development, our manufacturing person is also a PhD. But when you get a little past that and start doing toxicology and clinical, then those people are not necessarily PhDs. So, the emphasis is first on research and development [which includes manufacturing], and then on marketing, and then on clinicals -- who are more liaisons working with groups that specialize in clinical trials -- or the toxicology groups.
With the rapid changes occurring in science and technology, what do you do for retraining and continuing education of team members?
Most of the PhDs go to at least two conferences a year. I go to many more than that because I'm looking for new products. And there's management training. A lot of the PhDs have access to the Internet and database files (MedLine), through their computers, so that's how they keep up-to-date on literature.
What's been your biggest success in business/research?
Probably FibRx. I'm the inventor. And another one, VIPbone, which you probably haven't heard of. VIP is a viral inactivation process for bone and orthopedic tissues.
Have you had an unexpected challenge?
Trying to inactivate other tissues using a wide variety of viral inactivation products -- just as an added measure of protection. It just didn't work well; the answer isn't there yet. Of course, we do extensive screening of all our tissues. But this was a prophylactic thing for tissue and bone: even though you've screened for everything, just in case there's a virus you're not aware of. Then it would destroy it, so you're looking for a broad spectrum agent that would treat all your tissue even after they've been screened.
Have you learned about an unexpected outside event?
Minimally invasive surgery [which was mentioned as one of the opportunities for CryoLife].
What time frame do you expect for a significant new market or application?
Probably one or two new ones per year.
Who are your customers, and how do you serve them?
Surgeons and procurement groups. The procurement groups work with hospitals. They're the ones who go to a donor's family, get permission, and procure the organ and send it to us. We process the tissue and freeze it and pass it along to the surgeons. Since it's illegal to buy and sell human tissue in this country, our sales are service fees for processing the tissues. We never own the tissues.
Have you seen any changes in the rate of organ donations?
The general rate of growth for donations is about 5%. We've been growing much faster than that, more like 20%. So more and more groups are sending their tissues to us.
Why do your customers choose CryoLife over its competitors?
Surgeons choose us for selection and quality; procurement groups for better service and a larger procurement fee.
How do you look for changes in technology, and maybe demographics, that might affect the company?
Routine computer searches. Also information from HeadsUp, two pages of little bullets of what new technologies are available, which I get faxed daily. This is great within areas of interest like biotechnology: it reports on cardiovascular tissues, [general] surgeries, orthopedic surgeries, minimally invasive procedures, and occasionally new trends from these little related items (unlike searches, where you only get what you ask for).
So you check off which bullets interest you...
... and then I get the whole article. Also, I go to a lot of different meetings. I go to meetings for technology, and meetings that present small companies that have new technologies. I screen grants every so often, just the abstracts, which is really new research -- before they even do it. And PhD theses.
What's your opinion of these sources?
They're usually pretty accurate, maybe a little slanted, or not as detailed as I would like.
What has already happened that will create the future?
Minimally invasive surgery, I think that's the way things are going; it's so much better for the patient if you make a little hole and not a big hole. And certainly the recent emphasis on controlling costs; that's going to make everyone rethink how we do medicine. It's got to be efficient, it's got to be good for the patient, it's got to be low cost.
I think the move for all these pharmaceutical companies to stop doing research in-house and buy these little companies and their ideas has also been a big change. At some point I think it's going to have to go the other direction.
And so much has happened in genetic engineering in the past 10 years.
Which of these do you think has yet to have full impact?
First, genetic engineering. I think the concept of transgenics, which is just really beginning, is very interesting. You modify animal tissue and xenograft it with human tissue. For example, people use porcine valves all the time, but there are problems with that. They don't last as long as our human valves because there's rejection. So if you can fool the body into thinking that it's a human valve, and it's not mutagenic, then it lasts longer and is better for the patient. Now researchers are putting human genes into animals, and they're expressing them so they're less mutagenic for transplant. Eventually, we'll have an animal heart which we can put in humans.
Right now, there's not enough tissue to go around to everyone that needs some. So we could use animal tissue. There's a move in that direction. That would do great things to our market because a pig valve would be a lot cheaper than a human valve. This would lower costs to the patient: we'd no longer have to pay procurement groups or do different serology for each person because we'll know the genetic makeup of this well-defined group of animals.
The second trend that's growing is tissue bioengineering, where you take a porcine heart and treat it chemically so that it's no longer mutagenic. It works the same way as that transgenic pig's heart but without having to grow it up in extreme sanitary conditions. And that's cheaper. So, depending on which works the best, that gives you a market.
What opportunities do they create?
There's opportunity in looking at transgenic tissues, and we're currently looking at tissue engineering. There's a lot of work being done by other groups such as Genzyme, where they take cells from a person and grow them up and put them back in their cartilage and allow cartilage to grow, which hasn't been possible up to now. Alternative methods for growing cartilage: taking out plugs and putting them where they're needed.
Do these demand any changes in organization?
This is a new position that I'm in, in that they need someone that's dedicated to looking at these new opportunities. I critique the technologies. Other people are working on projects and don't have time to screen all this information. It also demands that our group has to grow: as we come out with more products and maintain them, the company has to grow.
What journals/newsletters do you read?
I use HeadsUp and Medical Data Intl. services; and BioScan and Profound databases. I read Science, Nature, Blood Weekly, and an assortment of transplantation, cardiovascular, corporate, biotech journals.
What are the trends in the regulatory environment and how do they affect your business?
New FDA regulations may keep out competitors.
What are some other promising research fields?
Wound repair (and bioadhesives as a subset of that). Imagine brushing on something rather than using sutures or staples.
What other Southeastern companies are doing interesting research?
Novoste.
If you could speak with anyone, who would that be?
Leonardo da Vinci: about how he thinks of his new ideas; what's the thought process; where he comes up with all these things.
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