Bone fractures affect millions of people yearly, yet cost-effective therapies to accelerate repair or overcome healing impairments are lacking. In preliminary studies, a single 1-l0 microg intrafracture injection of thrombin peptide TP508 significantly accelerated fracture repair in rats, laying the groundwork for current human fracture clinical trials. We hypothesized that a TP508 slow-release matrix might be equally as effective in non unions and segmental defects. In Phase I, we therefore developed a TP508-copolymer-microsphere and tested it in rabbit delayed healing (0.5 cm) and non-healing segmental (1.5 cm) defects. X-rays and 6-week torsion testing of the 0.5 cm defects showed significant acceleration of bone formation by TP508 matrix relative to matrix alone. 1.5 cm defects showed considerable mineralization by 3-5 weeks in TP508, but not in matrix controls. Thus, these Phase I studies demonstrate the feasibility of moving forward with Phase II studies to optimize the formulation, test its stability, its ability to be sterilized for human use, its biocompatabiity, its pharmacokinetic properties, and its safety for clinical use. At the end of Phase II, we will compile documentation for submission to the FDA of an IND or IDE to move forward with human clinical trials and product marketing with an orthopedic partner. PROPOSED COMMERCIAL APPLICATION: In the US, the annual healthcare cost of bone fractures is estimated to exceed $10 billion. No osteobiologic product is currently approved as a substitute for bone grafts to accelerate healing. Therefore, a cost effective peptide based matrix which significantly accelerates bone repair in segmental defects will have a significant market impact.