US orthobiologics firm to buy Israeli medical tech company CartiHeal

Kfar Saba firm’s proprietary implant treats cartilage lesions in arthritic and non-arthritic joints to help alleviate pain; deal estimated at $500 million

Team of surgeons implant CartiHeal's scaffold into a 30-year-old woman's knee at Hadassah Medical Center, August 2018 (Hadassah Medical Center)
Team of surgeons implant CartiHeal's scaffold into a 30-year-old woman's knee at Hadassah Medical Center, August 2018 (Hadassah Medical Center)

Bioventus, a leading US orthobiologics firm, will be acquiring Israeli company CartiHeal, a developer of cartilage implants, for an estimated $500 million. The American company, an investor in CartiHeal, announced on Monday that it was exercising its option to buy the Israeli firm starting with a $50 million escrow payment.

Bioventus and CartiHeal had entered into an option and equity purchase agreement last year, following a $15 million equity investment in the Israeli company. Bioventus said at the time that it would move to buy CartiHeal after it receives pre-market approval by the US Food and Drug Administration for the Agili-C, an implant solution for people who have cartilage defects with or without mild to moderate knee osteoarthritis, a deterioration of cartilage and the underlying bone.

Knee pain is a common complaint that affects people of all ages. It can result from an injury, such as a torn ligament or cartilage, or from medical conditions. Osteoarthritis is one of the most common degenerative joint diseases, affecting more than 25 percent of people over 18, according to research published in Treatments for knee pain include physical therapy and knee braces, but surgical procedures may also be required.

Agili-C, made of a form of calcium carbonite called aragonite, was granted Breakthrough Device Designation by the FDA in 2020, following a global randomized, and controlled trial using Agili-C for the treatment of joint surface lesions of the knee.

As part of the study that took place in Israel, the US and Europe, over 500 patients with knee, ankle, and great toe cartilage lesions received the implant.

Alessandra Pavesio, senior VP and chief science officer at Bioventus, said Monday that the data generated by the study demonstrated the superiority of Agili-C over the surgical standard of care, namely microfracture and debridement.

“We believe this product could be a strong alternative for the approximately 650,000 US patients annually receiving microfracture or debridement along with other cartilage treatment options,” said Pavesio. “Agili-C represents an exciting potential new offering for our portfolio designed to address the spectrum of osteoarthritis disease.”

CartiHeal’s Agili-C implant is made of aragonite, a form of calcium carbonite. (Screenshot)

Dr. Ken Zaslav, CartiHeal’s chief medical officer and former president of the International Cartilage Repair Society, said earlier this month that “the idea of the study design was to treat patients that we, as orthopedic surgeons, see on a daily basis in our clinics and operating rooms. This is the first multinational, randomized and controlled study which enrolled subjects with such a wide range of indications.”

Bioventus said it plans to continue working closely with CartiHeal to advance full FDA approval and prepare to commercialize the implant that could bring relief to millions of sufferers of cartilage knee pain.

Relief for millions

“Millions of patients are looking for a solution to the degeneration of knee cartilage,” Nir Altschuler, the CEO and founder of CartiHeal, told The Times of Israel in 2018 after the first Israeli patient received the implant. “Cartilage has very limited ability to be repaired. Finding a solution for cartilage regeneration is one of the holy grails of medicine.”

“The idea is to capture patients who are still active and to try to treat them before they reach the need for a knee replacement,” he said from New Jersey, where he moved with his family to supervise the multi-center clinical trial.

For Agili-C, surgeons drill out the affected area of both cartilage and bone in a minimally invasive procedure, making sure to get to the bone marrow and the stem cells within the treated area. They then insert a cylindrical scaffold that fits into the opening like a plug, “just like a screw-anchor in a wall,” Altschuler explained.

Made of aragonite, the implant is modified by CartiHeal’s patented technology so that it can interact with the implantation site. Cartilage and bone cells adhere to the implant, Altschuler said, while at the same time gradually degrading the calcium from the scaffold. Eventually, the implant is almost fully degraded as bone and cartilage regrow.

CartiHeal operates from Kfar Saba, and employs approximately 30 people. Since it was founded in 2009, the company has raised over $70 million with investors including Elron Electronic Industries, the Accelmed investment firm, Access Medical Ventures, Peregrine Ventures, and the aMoon Fund of Marius Nacht and Dr. Yair Schindel. Other strategic investors include Johnson & Johnson, through its JJDC investment arm.

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