CartiHeal succeeds in clinical trials to treat cartilage

The Israeli company CartiHeal has announced that it has succeeded in a clinical trial for its treatment of damaged knee cartilage either due to injury or arthritis. The company states that its cartilage replacement product has been more successful than currently used treatments. The trial included 251 patients, and was conducted over two years. Among the investors in CartiHeal are Elron Electronic Industries Ltd (TASE: ELRN), with a 27% holding, Accelmed, headed by Dr. Uri Geiger, venture capital firms aMoon, Peregrine Ventures, Johnson & Johnson Innovation and Access Medical. The company’s technology originated at Ben-Gurion University of the Negev, which also owns shares in the company through its technology transfer arm. The company was founded in the incentive technology incubator owned by Peregrine Ventures. Another investor in CartiHeal is US company Bioventus, which invested $15 million in a pre-money valuation of $180 million in 2020. The investment agreement includes an option to buy the company for $360-500 million. If CartiHeal receives marketing approval from the US Food and Drug Administration (FDA), it can choose to require Bioventus to exercise that option. CartiHeal has received Breakthrough Therapy approval from the Food and Drug Administration, allowing the clinical trial process to be shortened for products that meet a need not met by products currently on the market. Thanks to this status, the company believes that it will be able to register the product for sale after the current trial. It plans to apply for approval by the end of this year. It should be noted that the Food and Drug Administration is currently slow to approve new products due to the workload caused by the Covid-19 pandemic, and the difficulty of visiting production lines for inspection. So it may take CartiHeal a year or more to get approval. If Bioventus uses the takeover option, Elron will receive up to $129 million, depending on the principal allocation. Patients in the CartiHeal Agili-C implant clinical trial were tested for treatment outcomes in five categories: pain, other symptoms, quality of life, activities of daily living, and sports. The difference in the scores required to demonstrate that a CartiHeal product is statistically and clinically superior to currently available standard therapies was determined, and CartiHeal exceeded the required score. In addition, 77.8% of those treated with CartiHeal experienced an improvement in their condition, compared to 33.6% of those who received the conventional treatment. CartiHeal Chief Medical Officer Dr. Ken Zaslav, former President of the International Society for Cartilage Repair, said, “The study design idea was to treat patients that, as orthopedic surgeons, we see on a daily basis in our clinics and operating rooms. This is the first multinational, randomized, controlled study. It included subjects with such a wide range of indications.” “The study results, which demonstrate the superiority of the Agili-C implant over the current surgical standard of care, present an important potential benefit, as reflected in the breakthrough designation by the U.S. Food and Drug Administration, for patients who lack other adequate treatment options,” said Nir. Altschuler, founder and CEO of CartiHeal. If its options are exercised, Elron expects to receive up to $126-129 million including $90-92 million on sale and $36-37 million in subsequent payments. Accelmed, which owns a 15% stake, expects returns seven times its $10 million investment. Published by Globes, Israel business news – en.globes.co.il – August 4, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021