Investors Fund Efforts in Cartilage Repair, Knee Pain

Maybe medtech financing isn’t dead after all. Investors have pledged $41.5 million in support of two companies attempting to address the stubborn and costly issues of knee pain and cartilage repair.

Alpharetta Ga.-based Cartiva Inc., which makes products for the treatment of cartilage injuries and osteoarthritis, has secured $8.5 million in a series D financing round led by New Enterprise Associates (NEA) and with participation by new investor Windham Ventures Partners.

Proceeds from the financing are expected to fund the company through U.S. Food and Drug Administration (FDA) premarket approval (PMA) of its Cartiva synthetic cartilage implant following the company’s previously announced submission of the PMA application to the FDA in April. The proceeds also will support the post-510(k) clearance clinical evaluations of the company’s Proxifuse hammertoe correction system and its Grip study evaluating the Cartiva SCI, an organic polymer-based biomaterial, in the treatment of osteoarthritis at the base of the thumb.

“We are grateful for the continued support of NEA, and welcome the addition of Windham Venture Partners, which builds on the strength of our investors,” said Tim Patrick, president and CEO of Cartiva. “Our ability to raise capital from such quality investors is a testament to the significant progress we have made in establishing the clinical benefits of our synthetic cartilage treatment. The results from our Motion study were accepted for presentation at the July annual meeting of the American Orthopaedic Foot and Ankle Society. We are excited to share the results of this large, randomized clinical study to foot and ankle surgeons this summer in Long Beach (Calif.).”

Moximed Inc., meanwhile, has raised $33 million in private equity to help patients suffering from knee pain.

The round included new investor Vertex Venture Holdings Ltd. and returning investors New Enterprise Associates, Gilde Healthcare Partners, Morgenthaler Ventures and GBS Venture Partners. Christopher Shen, M.D., managing director and head of U.S. healthcare investing at Vertex, will join the board of directors as part of the investment. The company has raised $80.6 million to date.

“We are excited to add Vertex as a new investor, and we gratefully appreciate the continued support of our previous investors. The new capital will support the company’s efforts to gain FDA approval of the KineSpring System and grow commercial sales in Europe,” CEO Kevin Sidow said. “We continue to be encouraged by the relief brought to patients worldwide by the KineSpring System and by the strong interest in a joint preserving treatment that allows patients to maintain the lifestyle they expect and deserve.”

The KineSpring System is a treatment option for pre-arthroplasty patients with mild to moderate knee osteoarthritis that find conservative therapy, such as pain medication and knee braces, unsuccessful but who are not ready for full joint-altering knee surgery. The KineSpring System is implanted in the subcutaneous tissue alongside the joint to cushion the knee from excessive loading. Importantly, the KineSpring System is completely joint-sparing so future treatment options are maintained. The KineSpring System—CE marked and available in major European markets—has been implanted in more than 1,000 cases worldwide. It is investigational in the United States.

“Vertex shares Moximed’s vision of the vast opportunity to make joint unloading a standard of care for osteoarthritis patients. A procedure that could potentially avoid or delay joint replacement and costly revision arthroplasty surgeries would appeal to all stakeholders: patients, surgeons, payers, and employers,” Shen said.

Moximed develops osteoarthritis treatments and therapies. The company was founded in 2006.