By Kim Tong-hyung
Staff Reporter
Daniel Shim, the chief executive of Korea Bone Bank, a Seoul-based medical device maker, says he will remember 2009 as the year when his business really started to put flesh on its bones.
However, the athlete-turned businessman hopes that this is only the start of a much greater growth process that will eventually see the company become a global industry heavyweight. And he is banking on bone morphogenetic proteins (BMPs), known for their ability to stimulate the production of new bone in the body, to become the company's own version of magic beans.
``The global market for artificial joints is stabilizing, but in BMPs, we have barely scratched the surface of the markets potential,'' said Shim in a recent interview with The Korea Times at the company's headquarters in Seoul's Guro Digital Complex.
``We believe we could have a global presence in BMPs by 2011. Our success will depend on our ability to reach the U.S. market, which is worth about 6 trillion won now, and taking just 5 percent of that market would be a win for us.''
South Korea has a wealth of bio-tech firms, but not many companies are in a better position to exploit an aging society than Korea Bone Bank, which is starting to establish an international reputation for allograft bones and connective tissues for transplants. In allograft implants, cells and tissues from a dead donor are transplanted to the needed body parts of patients, a procedure often used for reconstructing knees and ankles or repairing damaged ligaments.
Allograft procedures are increasingly being covered by medical insurance in countries around the world, Shim said, which has more patients opting for allograft instead of conventional metal instrument implantations.
Korea Bone Bank, which expects to go public next year, provides a full range of products for bone tissue transplantation, including allograft, bone cage, tendon, allograft paste, bone matrix, spinal replacement and, eventually, BMP.
And the acquiring of Endotec, a New Jersey-based maker of orthopedic devices that is known for its advanced knee and ankle replacement systems, earlier this year made Korea Bone Bank one of the more influential companies in artificial joints.
The company, which claims it spent around $10 million to buy Endotec, recently secured around $6 million in investment from ePlanet Ventures, a California-based venture capital firm.
Of course, the goal of medicine is to eventually eliminate all the metal and plastic inserts that the Korea Bone Bank has been trying so hard to put in orthopedic surgeries and instead allow the human body to regenerate. So it's easy to understand Shim's conviction that BMP will be a license to print money.
BMPs are natural growth factors that promote bone formation and healing after injury. The recent advancement in technology now enables the synthetic production of BMPs and their application onto fracture sties during surgery.
U.S. pharmaceutical maker, Wyeth, has so far dominated the production of the BMPs, but the patent rights expired last year. Korea Bone Bank said it is one of the world's first companies after Wyeth to gain the ability to mass-produce the protein.
The company's samples of recombinant human BMP-2 (rhBMP-2) recently gained positive reviews from laboratories in Inha University and the Singapore National University. Shim expects the company's BMP product will gain Korea Food and Drug Administration (KFDA) approval soon, and be fully commercialized sometime next year.
``We spent more than 20 billion won to develop BMPs since 2006 and we have just started to reap the results,'' Shim said.
``A lot of things will depend on when we gain FDA approval in the U.S., but I think we will be in the U.S. BMPs market by the end of 2010. By then, we will have leadership in the Korean market that we believe could grow as much to 200 billion won.''
Although Shim sees BMP products as the building block for the future, he expects artificial joints to bring in money quicker.
Korea Bone Bank expects around 35 billion won (about $28.9 million) in revenue this year, more than a double 2008's numbers, and much of the growth is expected to come from the artificial joints business. The number of artificial joints used in Korean surgery will grow to 100,000 in 2012 from last year's 60,000, Shim said.
Last month, the company established a research and development (R&D) center for artificial joints, which also doubles as a manufacturing facility, and is also participating in a 1.5 billion won government project to develop artificial joints customized for Korean and Asian patients.
Korea Bone Bank eventually plans to combine its allograft bones and artificial joints business with stem cell technology, developing patient-specific tissues that will reduce the risk of implant rejection.
Before Shim established the Korea Bone Bank in 1997, he was most famous for being a member of Korea's national rugby squad. Shim admits he never envisioned himself heading a bio-tech firm during his days as an athlete, but he takes pride in running his business with the same kind of speed and stubbornness it takes to hit an opponent in the legs.
Besides, a true understanding of pain wouldn't hurt when you are in the business of replaceable body parts, would it?
``No one would take me as a former rugby player,'' laughs Shim, who looks an inch or two beneath 1.75 meters and without an ounce of excess fat in him.
``My game was about speed and moving forward. I think my mindset as an athlete has somewhat shaped my traits as a businessman. I am not a `think-before-you-leap' type, I just do the damn thing first and see what happens.''
After retiring from the sport and working as a sales manager for Chong Kun Dang, a Korean drug maker, Shim identified the potential of allograft bones and tissue engineering, which had yet to emerge as a market in Korea.
``Doctors have been hearing about allograft products and other related technologies from news stories and international seminars, but there was no local company providing such products to them, even though they wanted to use them,'' Shim said.
``This was the main idea I was targeting after I established Korea Bone Bank. The Asian financial crisis, which nearly crippled our company from the start, eventually proved to be a blessing in disguise, as it was easier to provide our products and establish relationships with hospitals when other medical device makers were having trouble providing equipment.''