The Israeli MedTech startup CartiHeal, the developer of a treatment for joint surface lesions in traumatic and osteoarthritic joints, announces securing a $15 million funding round from American orthobiologics giant Bioventus. This investment also brings Bioventus the option of acquiring the Israeli startup, which has totaled $74 million in funding so far, from Marius Nacht’s aMoon, Johnson & Johnson’s VC arm (JJDC), Peregrine Ventures, and Elron.

A $350 million exit, but only pending FDA approval

CartiHeal specializes in regenerative healing with a product aimed at treating cartilage and bone trauma. The company’s flagship product is the Agili-C, which is a treatment specifically targeting joint surface lesions, in order to organically recover from trauma without the need of outside cell regrowth inducers.

Bioventus’s investment in the Israeli startup comes as part of CartiHeal’s ongoing process of obtaining FDA approval, with a focus on securing a PMA - requires intense research and clinical analysis. For this purpose, Bioventus has pledged an additional $5 million in funding, if needed, to effectively complete the research.

In a talk with Geektime, CartiHeal CEO and co-founder, Nir Altcshuler tells that the purpose of the research and trials to further prove a clinical superiority over the current standard practice of surgery. The company is testing the product’s effectiveness on the general population as well as to sub-populations: osteoarthritis patients, excluding extreme and hard cases, and patients with large joint lesions.

As part of the deal, Bioventus secured the option to acquire the Israeli startup, pending FDA approval for the Agili-C product. If the deal continues as planned Bioventus will shed $350 million for the Israeli MedTech company. Altschuler adds that the total could hit half of a billion pending on sales targets.
CartiHeal was founded in 2009 by Altschuler and Prof. Razi Vago. The funds will help accelerate clinical trials bringing the company one step closer to obtaining FDA approval. This was not Bioventus’s first investment in CartiHeal, as there was also a $2.5 million investment back in 2018.