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Skin Maker Files for Bankruptcy

September 26, 2002

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BOSTON (AP) _ The future of an artificial skin that helps diabetics avoid amputations is in doubt after its manufacturer filed for bankruptcy following months of conflict with partner Novartis Inc.

Last week, Organogenesis laid off all but 15 workers and stopped production of Apligraf, which uses live human cells to create a kind of portable skin graft. Apligraf, approved to treat venous leg ulcers and diabetic foot ulcers, was undergoing trials for use on burn victims.

On Wednesday, the company filed for Chapter 11 bankruptcy protection following the collapse of its marketing agreement with Novartis, the Swiss pharmaceutical company.

Organogenesis claims Novartis has inflated sales forecasts, while Novartis counters that Organogenesis’ production has been spotty. Novartis has offered to buy the company but says it was turned down.

Food and Drug Administration records indicate Organogenesis has been notified about possible problems, including contamination, on as many as four occasions. Organogenesis has recalled some batches of Apligraf, but says no one has ever been harmed by the product.

Foot ulcers strike about 600,000 diabetics annually and make them vulnerable to life-threatening infections, which sometimes require amputation. If initial treatments fail, replacing the infected skin with Apligraf can help the wounds heal.

There are alternative treatments, but there have been no direct comparisons of their efficacy, said Dr. Aristidis Vevis of Boston’s Joslin-Beth Israel Deaconess Foot Center, who did early work on Apligraf.

Novartis estimates about 25,000 patients have used the treatment.

Assembled from skin cells taken from the foreskins of infants, Apligraf has a shelf life of five days, so the product line has expired. Organogenesis says its skeleton crew of workers is keeping alive the cell line used to produce Apligraf so production can be restarted.

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