Stratatech, a Madison company working for more than a decade on skin tissue products to treat severe burns, has signed a contract with a federal agency that could bring the company $47.2 million over the next five years.

The huge contract will ensure that Stratatech has enough money to get its flagship product, StrataGraft, through all the remaining clinical trials and bring its wound treatment to market in about five years, assuming it wins the approval of regulators, chief executive Lynn Allen-Hoffmann said.

“I am absolutely thrilled,” Allen-Hoffmann said. “It is tremendous for the company. I am confident it’s going to have a very positive impact on the state.”

The contract is with the U.S. Department of Health and Human Service’s Biomedical Advanced Research and Development Authority (BARDA), an agency focused on developing tools for “public health medical emergencies,” its website says. BARDA has funded projects such as development of an anthrax vaccine and stepped-up production of flu vaccines.

BARDA approached Stratatech a couple of years ago seeking information, Allen-Hoffmann said.

“We’re the first company to be awarded a contract like this in the state of Wisconsin,” she said.

In January, Stratatech released results of its first phase of clinical trials showing that of 20 burn patients treated with StrataGraft, 17 had their wounds fully close within three months and 19 avoided painful grafts of their own skin. Allen-Hoffmann said it was “the first skin substitute to ever achieve this level of efficacy, potency and consistency in severe burns.”

Having that data was “instrumental in securing this award,” said Stratatech president Russ Smestad. “It is certainly a vote of confidence for our technology.”

The funding will let the company, 505 S. Rosa Road, add 10 to 20 employees over the next five years to its current staff of 35 to 40, Smestad said.

Some jobs will be added over the next six months, he said, but was not sure how many.

Allen-Hoffmann, who founded Stratatech in 2000 based on research in her UW-Madison lab, said it could take two years to begin the next phase of clinical trials. When that happens, StrataGraft also will be tested on pediatric burn patients.

“I am very proud of that,” she said, noting that usually regulators require companies to wait until more results on a product’s safety with adults are in.

Meanwhile, Stratatech also is proceeding with the development of other skin tissue products. Clinical trials are “teeing up to start in the next year” on another product, ExpressGraft, for treating diabetic foot ulcers.

“To the company’s knowledge, this will be the first genetically enhanced human tissue to be clinically tested” on diabetic ulcers, Allen-Hoffmann said.

Stratatech has received a “substantial amount” of funding through the Small Business Innovation Research program and from angel investors over the years, Allen-Hoffmann said, but declined to disclose the total.

She said numerous potential investors have tried to persuade her to move the company to California or the East Coast, but she has been steadfast in keeping it in Madison.

“I could never understand why we couldn’t do it here,” Allen-Hoffmann said.

Capital W: Plug in to Wisconsin politics

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