Biostage prices $8m offering for bioengineered organ implant

Biostage (NSDQ:BSTG), a 27-person biotech based in Holliston, Mass., is developing technology to regrow esophageal tissue in patients that have esophageal cancer or atresia. Last week, the company priced a public offering at ¢40 per share of common stock, expecting to bring in $8 million from the round.

The current standard of care for resectable esophageal cancer is complex – surgeons pull a piece of a patient’s stomach or intestine and reposition it in the chest to become the replacement esophagus. However, the procedure comes with a mortality rate that can be as a high as 19% at 90 days, according to Biostage.

Instead, the company has devised a way to combine stem cell therapy and a biocompatible device to create a combination product for implantation. They have evaluated the bioengineered organ implant in pig models and are hoping to move into the clinic within the year.

To create the implant, stem cells are collected from a fat tissue biopsy and seeded onto a scaffold that mimics the dimensions of an esophagus. The scaffold is ready to be implanted after spending 3 to 5 days in a bioreactor. Biostage hypothesizes that their Cellspan implants provide biological cues to the patient’s tissues, stimulating growth responses and tissue regeneration.

Executive VP and chief medical officer Saverio La Francesca told Drug Delivery Business News that in animal models, they have observed esophageal tube reconstruction after 3 weeks with their bioengineered organ implant.

The proceeds from the company’s new offering will go towards funding the next stages of regulatory approval, including filing an IND in the 3rd quarter of this year, according to president & CEO Jim McGorry. Biostage plans to be in clinical trials with its regenerative implant by 4th quarter, he added.

“We’re excited about the moment to see all of this work that builds on 25 plus years of tissue engineering, regenerative medicine, cell biology and see where that really comes together,” McGorry said.