by Deborah Balshem of Mergermarket
GID BIO, a privately held cellular medicine company, has restarted a capital raise effort that was delayed by one year due to the COVID-19 pandemic, said CEO William Cimino.
The Louisville, Colorado-based company is seeking to raise USD 20m and in the process of finalizing a mandate with an investment bank. It aims to close the round by the end of June.
Cimino told this news service in January of last year that GID BIO was seeking capital to support a pivotal Phase 3 trial for the treatment of knee osteoarthritis that was set to begin imminently. That financing was paused after the coronavirus crisis delayed launch, Cimino explained for this report.
In the last quarter of 2020, GID BIO officially kicked off the 124-patient trial, which is expected to take around 18 to 24 months to complete. After that, the company will seek pre-market approval (PMA) from the Food & Drug Administration (FDA).
If the company’s SVF-2 single-use device and tissue-processing therapy platform is approved, it will be the first cellular medicine treatment for osteoarthritis of the knee, according to Cimino.
Proceeds from the financing will support the company through the Phase 3 trial and potential commercialization. Ideally, GID BIO would enter into licensing agreements or be acquired by a larger strategic player prior to commercial sales, the CEO said.
GID BIO has secured four sites in Florida, New Jersey, Texas and Louisiana. Another four or five sites are set to come on board in the near term, Cimino said. The company began enrolling patients earlier this month.
Osteoarthritis is the most common type of arthritis, occurring when joint cartilage breaks down, often in hips, knees and spine. According to industry reports, the global osteoarthritis therapeutics market is projected to reach USD 10.1bn by 2024, with key drivers including a fast-growing geriatric and obese population. The knee osteoarthritis segment is predicted to have the highest growth rate.
Major players in the osteoarthritis therapeutics market include Sanofi [NASDAQ:SNY], Horizon Therapeutics [NASDAQ:HZNP], Johnson & Johnson [NYSE:JNJ], GlaxoSmithKline [NYSE:GSK], Bayer [FWB:BAYN], Abbott Laboratories [NYSE:ABT], Pfizer [NYSE:PFE], Eli Lilly [NYSE:LLY], Anika Therapeutics [NASDAQ:ANIK] and Flexion Therapeutics [NASDAQ:FLXN].
Cellular medicine, in which a patient’s own cells are used to control pain, reduce inflammation and repair inflamed tissue, is being touted as an alternative to drug therapies. According to Cimino, other regenerative medicine companies focused on osteoarthritis include Cartiva, Samumed TissueTech and CartiHeal.
Samumed in 2018 raised USD 438m, giving it a pre-money valuation of USD 12bn. In 2018, Wright Medical Group acquired Cartiva for USD 435m. Wright Medical was then acquired last year by Stryker [NYSE:SYK] for USD 4.7bn. In June 2019, TissueTech closed a USD 82m Series C financing round, while CartiHeal raised USD 20m in additional financing last July.
GID BIO 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. The company is owned by founders and a group of angel investors.
Cimino said GID BIO had enough runway in place to support itself in 2020. Without a trial, there were basically no expenses, and the company has a small staff of around five employees, he explained.
On a separate note, following FDA clearance of an expanded access protocol to treat a small group of COVID-19 patients using the GID BIO platform, The Richard King Mellon Foundation awarded the company USD 250,000 to conduct a study for patients with severe respiratory distress due to COVID-19.
GID BIO uses law firm Troutman Pepper.
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