Bethel Finance: Cartilage implant co CartiHeal raises $5m

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Cartilage implant company CartiHeal Ltd. has raised $5 million from Accelmed, the fund of Moshe (Mori) Arkin and Uri Geiger, and Access Medical Ventures, a US fund run by Israelis Limor Sandach, Dvir Keren, and Michael Tal. CartiHeal is a graduate of Peregrine Ventures' Incentive Technological Incubator.

CartiHeal CEO Nir Altschuler, a biomedical engineer, founded the company in 2009, on the basis of a concept discovered at Ben Gurion University of the Negev. The company previously raised $1.2 million.

CartiHeal's preclinical trial of its articular cartilage and osteochondral defect repair product, Agili-C, was successful, and enough for EU CE Mark certification. Altschuler said, "It is very unusual to obtain CE Mark without clinical trials, but the preclinical trial results were good enough."

CartiHeal will use the proceeds to financing marketing of its product in Europe, which it plans to begin in a year. The US is not a target market for now, due to the investment needed for a US Food and Drug Administration (FDA) protocol clinical trial, and the uncertainty of the registration. The product is also certified in Israel.

The cartilage reconstruction market is experimental, but promising. Companies developing stem cell-based products are the main companies in this segment, including Israel's Carticure Ltd., Regentis Biomaterials Ltd., and Prochon Biotech Ltd., which merged with a US company last year and is closest to bringing a product to market.

Companies in the cartilage reconstruction segment estimate the market at $1.6 billion a year, although most products are still only experimental.

Agili-C is in two parts. One made of aragonite, and the other made of aragonite and hyaluronic acid is biocompatible and biodegradable. It does not include living tissue, in contrast to most innovative products under development. "We found that these materials attract stem cells from the bone marrow, so that only cells in aragonite area turn into bone, and cells in the area of the aragonite and hyaluronic acid turn into cartilage," says Altschuler.

He says that the Agili-C is implanted through minimally invasive surgery, similar to an injection. "The cells gradually dissolve the implant, and within a short time, the implant can bear the body's weight and regular activity can be resumed," he says.