Histogenics Closes $49M Series A for Phase III Studies of Cartilage Implant

July 24, 2012 - Dow Jones VentureWire

by Brian Gormley

With millions of people striving to remain physically active as they age, regenerative-medicine company Histogenics Corp. said it has raised $49 million in Series A financing to complete clinical studies needed to file for regulatory approval of an implant technology that could help many people with cartilage injuries to resume running, skiing and other activities.

New investor Sofinnova Ventures led the round, which also included new investors BioMed Ventures,FinTech, GIMV and Split Rock Partners . Existing investors Alimta Partners, Boston Millennia Partners , Foundation Medical Partners , Inflection Point Ventures and ProChon Holdings BV also participated. Valuation wasn't disclosed.

Histogenics expects this capital to enable it to file for U.S. approval of its NeoCart, neo-cartilage implant, used to treat cartilage lesions in the knee, in late 2014, said Chief Executive Patrick O'Donnell.

This financing will support the Waltham, Mass., company into mid-2015, he said. Histogenics said it will also use the capital to support its efforts to gain regulatory clearance in Europe for VeriCart, a cell-free collagen scaffold designed to be used with a patient's own stem cells to repair small cartilage defects.

Patients with cartilage defects in the knee today may be treated with various therapies, including microfracture surgery, allografts or Carticel, a cell-therapy product from Sanofi SA 's Genzyme unit. Histogenics expects its NeoCart therapy, which uses a patient's own cells to create an cartilage implant, to be more effective than the existing options.

To create its NeoCart implant, physicians collect a sample of patients' cartilage cells. Histogenics embeds these cells into a scaffold, which goes into a bioreactor. The finished product is a cartilage implant, according to Mr. O'Donnell. The company tests biomarkers to ensure that the implant contains actual cartilage tissue. The implant is then delivered in an outpatient surgery, he said.

In the Phase III clinical trial, Histogenics is comparing NeoCart to microfracture surgery, in which small holes in the bone are created in an attempt to stimulate new cartilage growth. While Histogenics is targeting knee injuries initially, the technology potentially could be applied to cartilage lesions in other joints.

Histogenics's technology could interest pharmaceutical companies looking to move into regenerative medicine, particularly those that already have products to treat arthritis and joint pain, according to Sofinnova General Partner Garheng Kong , who has joined the Histogenics board. In addition, the technology may appeal to medical-device companies interested in orthopedics.

Another option would be for Histogenics to go public to raise funds to market to surgeons on its own, according to Dr. Kong.

Split Rock Managing Director Josh Baltzell has also joined the Histogenics board.