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US orthologics company Bioventus (Nasdaq: BVS) can now proceed with its $500 million acquisition of CartiHeal, after the Israeli medical device company received FDA clearance for its implants for the treatment of damaged cartilage. Bioventus signed an agreement to acquire CartiHeal last July, for $350 million, which was contingent on FDA approval. If Bioventus generates revenue from the implants then CartiHeal could earn up to an additional $150 million.
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The biggest winners from the deal are Elron Electronic Industries Ltd. (TASE: ELRN), Peregrine Ventures and Accelmed, which all have stakes in the company. After the deal was signed last year, Elron said that it expects to receive $126-129 million if the option is exercised including $90-92 million at purchase and $36-37 million in milestone payments – a 5-7 times return on its investment.
CartiHeal CEO Nir Altschuler told “Globes,” “This is the first product in the world to receive FDA approval for growing unscarred cartilage tissues. When we began to develop the product, investors said that I haven’t got a chance that attempts to renew cartilage have been a ‘graveyard’ for so much money for companies big and small. In medical books, under cartilage degeneration, it’s written that there is no solution and degenerative cartilage will not grow back.”
CartiHeal was founded in 2009 and currently has 30 employees in Kfar Saba and its center will probably remain in Israel after the acquisition but Altschuler himself is expected to leave after the sale is completed.
Published by Globes, Israel business news – en.globes.co.il – on March 30, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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