BioMimetic Stock Up on Bone-Graft Data

The stock rose $1.63, or 11.7 percent, to $15.53 in afternoon trading on heavy volume. Shares have traded between $9.70 and $19.51 over the past 52 weeks.

Late Thursday, the maker of drugs and devices for musculoskeletal injuries said its GEM OS1 Bone Graft had a 90 percent success rate in foot and ankle bone-fusing procedures. The product candidate is a synthetic material for bone fusing, which involves the application of a graft material in the space between bone ends to stimulate a permanent connection.

The Franklin, Tenn.-based company said there were no serious side effects connected to GEM OS1.

Wachovia Securities analyst Michael Matson reaffirmed an "Outperform" rating for the company early Friday, saying the data is even more impressive because of the number of high-risk patients involved in the study.

"BioMimetic's data set has added gravitas due to the large percentage of patients that are considered high risk for poor healing," he said in a note to investors.

In all, 60 percent of the participants were smokers, 38 percent were obese, 10 percent had diabetes, and 33 percent had prior surgery at the new fusion site. Matson expects Canadian approval by late 2008, opening a $20 million to $30 million market opportunity and foreshadowing the U.S. market prospects.

"While it is a small market, we believe a launch in Canada could give investors confidence in BioMimetic's ability to convert developmental success into commercial success," he said.

Late Thursday, Deutsche Bank-North America analyst Tao Levy reaffirmed a "Buy" rating with a $22 price target, saying the data lower the program's risk and provide evidence the product can address a market worth several hundred million dollars.

He and several other analysts also pointed out GEM OS1's observed ability to help wounds heal.