Stratatech Stratagraft, company photo

StrataGraft, human cell-based skin tissue to treat burn wounds, will be stockpiled by the federal government for use in a “mass casualty emergency,” under a contract issued to Madison’s Stratatech in 2015. Stratatech's acquisition by Mallinckrodt, a U.K. pharmaceutical firm, was finalized Wednesday.

Stratatech Corp.

Stratatech Corp., a Madison company developing skin tissue products to treat burn victims, is getting a federal contract that could pay the company up to $247 million over five years — mainly because the government wants to stockpile the tissue in case of a nuclear attack by terrorists.

The Project BioShield contract with the Biomedical Advanced Research and Development Authority (BARDA) will let Stratatech continue tests on burn patients and apply for FDA approval to sell its StrataGraft skin tissue commercially.

Even before the Food and Drug Administration acts, though, BARDA wants to set up an inventory of StrataGraft tissue, for use “in case of a natural or man-made mass casualty emergency,” the company said.

“This is a major, major opportunity for our company, and a unique one,” Stratatech CEO Lynn Allen-Hoffmann said in an interview Monday.

A study of patients with serious burns, released in March, showed that in 27 of 28 cases, StrataGraft skin tissue applied just once healed the wounds completely within three months, and in some cases, looked better than the burns treated using a graft of the patient’s own skin, called an autograft.

“This is the first therapeutic product to achieve a clinical outcome comparable or superior to autografting,” the company said in a news release.

Stratatech was founded in 2000. The privately owned company, at 505 S. Rosa Road, has 50 employees. With the BARDA agreement, 10 to 20 employees will likely be added over the next two years, Allen-Hoffmann said.

She said she hopes to start a third phase of patient testing in early 2016, and if enrollment and FDA approval go as expected, StrataGraft could be on the market in 2020.

Under terms of the new contract, Stratatech will get an initial $60 million to take StrataGraft through the final steps to its first distribution to BARDA, which could come in late 2018 or early 2019, Allen-Hoffmann said. It is an expansion of a $47 million agreement Stratatech has had with BARDA since 2013. Of that deal, $18 million has been paid to the company so far.

That brings total potential support to the Madison company from the federal agency to $265 million.

BARDA’s support has been “instrumental” in advancing StrataGraft, Allen-Hoffmann said. “Providing these patients with an off-the-shelf regenerative skin tissue has the potential to transform severe burn care,” she said.

The American Burn Association estimates 1.1 million Americans suffer burns each year, with about 40,000 of the injuries severe enough to require hospitalization.

If there were a “mass casualty thermal burn” situation, the Government Accountability Office estimates more than 10,000 patients might require burn care, the company said.

“Successful completion of this contract would position the company’s StrataGraft skin tissue for rapid deployment as a medical countermeasure,” Stratatech said.

Stratatech is working on a series of therapeutic skin tissues. A second product, ExpressGraft, recently received the FDA’s OK to start tests for healing diabetic foot ulcers. Allen-Hoffmann said the company also plans clinical trials on children and on elderly patients. Geriatric patients “have incredibly limited options,” she said, because their skin is often too thin to be used as grafts.

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Judy Newman is a business reporter for the Wisconsin State Journal.