$500M CartiHeal Sale Continues After FDA Approval

US orthologics company Bioventus (Nasdaq: BVS) may now proceed with its $500 million acquisition of CartiHeal after the Israeli medical device company received FDA approval for its implants to treat damaged cartilage. Bioventus signed an agreement last July to acquire CartiHeal for $350 million, subject to FDA approval. If Bioventus generates revenue from the implants, CartiHeal can earn up to $150 million in additional revenue.

The biggest winners of the deal are Elron Electronic Industries Ltd. (TASE: ELRN), Peregrine Ventures and Accelmed, all of which have interests in the company. After the deal was signed last year, Elron said 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 investment. his investment.

Nir Altschuler, CEO of CartiHeal, told “Globes”, “This is the first product in the world to receive FDA approval for growing cartilage tissue without scarring. When we started developing the product, investors said I had no chance to “Renewable cartilage has been a ‘graveyard’ for so much money for companies big and small. In medical books, under cartilage degeneration it says there is no solution and degenerative cartilage will not grow back.”

Founded in 2009, CartiHeal currently has 30 employees in Kfar Saba and the center is likely to remain in Israel after the acquisition, but Altschuler itself is expected to leave after the sale is completed.

Published by Globes, Israel business news – en.globes.co.il – on March 30, 2022.

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