Mergermarket is the leading provider of forward-looking M&A intelligence and data to investment banks, private equity firms, law firms, accounting firms, corporates and other M&A professionals around the world. WWW.MERGERMARKET.COM
JANUARY 16, 2020 BY DEB BALSHEM
GID BIO, a privately held cellular therapy company, is looking to raise between USD 20m and USD 25m to support a pivotal Phase 3 trial and potential commercialization, said CEO William Cimino.
Louisville, Colorado-based GID is about to begin the trial, which focuses on osteoarthritis of the knee and is expected to take roughly 18 to 24 months to complete. After that, GID will seek pre-market approval (PMA) from the Food & Drug Administration (FDA) for its tissue processing platform.
In cellular medicine, a patient’s own cells are used to repair and regenerate tissues or control pain and inflammation.
The current raise will target strategics and financial sponsors. GID expects to be “actively engaged” with potential investors by the end of this quarter, Cimino said. The company has spoken to a few investment banks but has yet to determine if it will hire an outside advisor, he added.
GID was founded in 2010 and has funded R&D through a small round of seed funding and licensing fees from a related tissue grafting technology that was subsequently acquired by LifeCell Corporation. GID is owned by company founders and a group of angel investors.
Proceeds from this first institutional financing will allow GID to sustain itself through FDA approval and initial commercialization, though Cimino said the company ideally would enter into licensing agreements or be acquired by a larger strategic player prior to commercial sales.
Large orthopedic device companies, such as Stryker [NYSE:SYK], Zimmer Biomet [NYSE:ZBH] and Arthrex are examples of logical buyers, along with major pharmaceutical and device companies focused on orthopedics and degenerative diseases, Cimino said.
GID’s Phase 3 trial already has investigational device exemption (IDE) approval from the FDA. If approved, the SVF-2 single disposable device and therapy would become the first FDA-approved cellular medicine treatment for osteoarthritis of the knee, according to Cimino.
SVF-2 harvests, isolates, concentrates and extracts the right amount and type of a patient’s own healing cells for a cellular implant to help control pain, reduce inflammation and repair inflamed tissue in the knee. GID already has completed three FDA-approved clinical trials for this minimally invasive surgery that involves no joints, all which have shown no serious adverse events and significant improvements in pain, stiffness and function.
Osteoarthritis represents a USD 200bn market in the US. Cellular therapies represent an alternative to traditional treatments including surgery and drugs. According to Cimino, the biggest cost to Medicare for a single procedure is total knee replacement. Additionally, the Association of American Medical Colleges projects a shortage of up to 23,000 orthopedic surgeons by 2032, due partly to physician retirements and aging baby boomers.
As such, emerging regenerative medicine companies have seen some robust valuations, Cimino noted, pointing to Cartiva and Samumed as examples.
Samumed, which is also conducting a Phase 3 trial for osteoarthritis of the knee, in August 2018 raised USD 438m, bringing the total amount of outside capital raised to USD 650m and giving it a pre-money valuation of USD 12bn, according to news reports.
In October 2018, Wright Medical Group [TICKER:WMGI] acquired Cartiva, maker of a synthetic cartilage implant for the treatment of osteoarthritis of the toe, for USD 435m in cash. Cartiva received PMA approval in mid-2016.
Other privately held companies that have attracted investor interest include TissueTech, which has raised USD 110m, and CartiHeal, which has taken in close to USD 60m.
GID is focused on three therapeutic domains: musculoskeletal, dermal and organ. The company is in preclinical or clinical trials for several other indications, including rheumatoid arthritis in hands, alopecia, diabetic foot ulcer, erectile dysfunction and chronic obstructive pulmonary disease (COPD).
Pepper Hamilton provides legal counsel to GID.