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Orthopaedic Technologies to Watch: Sensors, Stem Cells, Imaging Receive 1H17 Funding

Posted in Research to Reality | Jul 2017 | Comments (0)

Tags: FeaturedEditor's Choicefunding

Funding announcements that we tracked by orthopaedic companies in 1H17 kept pace with the number of announcements made in the first halves of 2016 and 2015, signaling that the environment to raise capital remains consistent, if difficult. Similar to surgeons seeking more clinical data before product adoption, risk-adverse investors continue to hesitate in backing companies that have yet to demonstrate clinical outcomes or secure regulatory approval, as we learned from investors and startups.

Still, funding is taking place and the list of first-half recipients includes novel technology in development that we thought you would find of interest from clinical and investment standpoints.

The announcements below include 12 technologies grouped by market segment, and include traditional hardware as well as sensors, stem cells and imaging.

SPINE

AMB Surgical received an investment to support prototype development of the Flyte Automated Growing Rod for the treatment of juvenile scoliosis, traumatic injuries, etc. The technology allows for electronic control of adjustable rods used in orthopaedic procedures. Using Flyte, a surgeon can perform remote, nonsurgical rod expansion via microchip and RFID reader that power a gear box within the rod. Additionally, the device collects patient data to offer real-time biomechanical stress/strain information. AMB seeks to prototype a rod for use in external frames, followed by implanted rods for scoliosis treatment and other internal uses.

Intellirod Spine raised additional equity financing from new and existing investors, led by the OhioHealth Innovation Development Fund and Queen City Angel First Fund V. Proceeds will support commercialization of sensor technologies and related lumbar fusion implants.

Intrinsic Therapeutics closed a $49.0 million round of financing, which will support global commercialization of the Barricaid Anular Closure Device. Barricaid is designed to prevent reherniation following lumbar discectomy to treat sciatic pain. In 4Q16, the company filed a Premarket Application with FDA based on two-year outcomes of 554 trial subjects with a high risk of reherniation, subsequent reoperation and rehospitalization. Barricaid is reported to be the first of its kind in a prospective randomized superiority trial involving patients who are at higher risk for revision discectomy to alleviate recurrent pain resulting from reherniation.

ARTHROSCOPY/SOFT TISSUE REPAIR

Active Implants completed the first $10.0 million tranche of a $40.0 million Class D Units financing. Funds will support two ongoing clinical trials of the NUsurface Meniscus Implant, a polymer-based investigational treatment for persistent knee pain following medial meniscus surgery. Enrollment for the SUN and VENUS trials is expected to be complete by the end of 2017.

Hyalex Orthopaedics raised $16.0 million in a Series A financing. The company is developing HYALEX synthetic polymer that is designed to mimic hyaline cartilage, to potentially replace only diseased areas of joints while sparing healthy bone. HYALEX was developed with technology licensed from Stanford University. The financing was led by Canaan Partners, with participation from Osage University Partners and Johnson & Johnson Innovation.

Orthonika closed a £0.7 million (~US $0.9 million) investment round. Funds will support biomechanical testing and a preclinical pilot trial of MenisciKnit, a novel synthetic total knee meniscus replacement, specifically biomechanical testing and a preclinical pilot trial. Orthonika was spun from the Imperial College London in 2015, launched with an initial seed funding of £150,000.

Soft Tissue Regeneration closed a $1.5 million Series C Financing and rebranded as Biorez. At the 2017 AAOS meeting, the company attended private meetings to share results of a 15-patient safety study that began in 2Q13. Biorez is the first company to clinically investigate a tissue-engineered scaffold for anterior cruciate ligament reconstruction in a human trial.

Trice Medical closed a $19.3 million Series C financing led by several investors, including Smith & Nephew, which took a minority stake in the business. Funds will support U.S. marketing and ex-U.S. regulatory approvals for the mi-eye2 system, which can be used in place of MRI to diagnose joint injuries, as well as R&D for a third-generation device. To date, Trice Medical has raised $40.9 million.

ORTHOBIOLOGICS

ASC Biosciences partnered with Stem Cell Development Fund to receive $1.5 million to support development and marketing of its Multipotent Adult Stem Cell platform that can differentiate into cartilage, bone, tendon, muscle, ligaments, etc. ASC has developed Chondrofelt, a matrix intended for use in microfracture to repair articular cartilage defects.

CartiHeal closed a $18.3 million financing round, supporting the recently-approved IDE clinical trial of the Agili-C implant, in pursuit of a Premarket Approval. The two-year pivotal U.S./ex-U.S. study seeks to demonstrate superiority of Agili-C vs. surgical standard of care in the treatment of cartilage and osteochondral defects in the joints.

The investment was led by aMoon with existing investors Johnson & Johnson Innovation, Peregrine Ventures and Elron.

TRAUMA

EDGe Surgical closed a $1.4 million seed round to fund launch of the Ortho EDG single-use electronic depth gauge for use in the placement of orthopaedic screws. (The company also recently opened a $2.0 million Series A to develop Spine EDG for the spine market.)

Micro C secured $0.7 million in seed funding. Proceeds will support 2Q17 milestones such as prototype build, testing, FDA submission and launch activities for its portable extremity imaging system.

The system comprises a compact digital x-ray and multi-modal camera that integrates real-time, HIPPA compliant data and image transmission with accurate billing. It is designed to deliver greater accuracy, clarity, safety and speed than present x-ray and fluoroscopy equipment.

As is pointed out in who invested, large orthopaedic players continued to back startups. Johnson & Johnson Innovation and Smith & Nephew were among 1H17 investors. We suspect that one or more of these companies or technologies will be acquired in the foreseeable future as larger players seek to build out their portfolios.

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