medical device company Cartiheal is sold to the British "Smith & Nephew" for $330 million

Half a year after canceling a deal to purchase it, the medical device company from Kfar Saba Cartiheal is sold to the British company Smith & Nephew for $330 million. The deal is expected to close in the first quarter of 2024.
According to the agreement, the buyer will pay the shareholders of Carthill 180 million dollars in cash, and the balance - 150 million dollars - subject to meeting a milestone of cumulative sales of 100 million dollars in 12 consecutive months (as opposed to a calendar year), when the sales target must be achieved Within 10 years from the date of closing the deal.
Carthill has developed a treatment for knee cartilage injuries using an implant made from coral. In its 14 years of operation, it raised $74 million, and the main beneficiaries of its sale are the Elron company, which owns 27% of its shares, and the Accelmed 1 fund under the control and management of Dr. Uri Geiger - in which Mori Arkin and Migdal are also invested - which owns 15% of its shares Other shareholders in Carthill are Peregrine Fund, Access Medical Fund, aMoon Fund and Johnson & Johnson - who own 10% of the company's shares.
Carthill's investors have already received $100 million from the previous deal signed with the American orthopedics company Bioventus, which failed to complete the purchase, and the shares they sold to Bioventus for them were returned to them. That is, in practice the shareholders of Carthill benefited from a sale deal amounting to 430 million dollars - a return that is up to six times the investment in the company.
Elron - which has invested $18.4 million in the company since its inception - has already returned $33 million from the canceled deal and distributed it in full as a dividend to its shareholders. According to its report to the stock exchange this morning, it is expected to receive another 87 million dollars from the new deal - 47 million dollars in cash and the rest according to milestones. The Peregrine Fund, the company's first investor, invested $200,000 in it at the beginning and will record a 50-fold return on its investment.
The buyer, Smith & Nephew, is an old company established about 170 years ago, which employs about 19,000 people, has an annual revenue turnover of 5 billion dollars and is traded on the London and New York stock exchanges at a value of 11 billion dollars. Carthill employs 25 people, most of them in its development center in Kfar Saba, and a few in the US - all of them are expected to continue working under the purchasing company. Founder-CEO Nir Altshuler, will continue to serve as a consultant to the company for six months from the closing of the deal.
Carthill was established in 2009 as part of an incubator of the Israeli venture capital fund Peregrine. Altshuler, who worked as the VP of Business Development at the Foundation, was exposed to a study by Prof. Razi Vego from Ben Gurion University which showed how transplanting coral into a joint lesion of a rabbit was able to regenerate bone and fibrotic cartilage - that is, a thin layer of cartilage that cannot bear heavy loads on the joints Following this, he sought to find a way in which the coral transplant would lead to the regeneration of a natural and strong hyaline cartilage, thus also restoring the damaged joint.
The implant developed by Cartihil, Agili-C, treats cartilage and subcartilaginous bone erosion. These injuries are often caused by degenerative wear and tear, age-related or caused by sports injuries or trauma.
Unlike bones and skin, cartilage is not a regenerative tissue, since it does not receive a blood supply, and therefore in many cases cartilage erosion will deteriorate over the years and lead to a complex joint replacement surgery. Agili-C is produced from a tiny piece of coral, which is processed with the technology developed by the company and is implanted in a minimally invasive process into the bone and cartilage of the knee. The coral implant that is inserted into the bone serves as a scaffold on which natural hyaline cartilage re-grows and it also leads to the re-growth of normal sub-cartilaginous bone.
The current treatment standard includes a wide range of treatments, from conservative treatments such as physiotherapy and painkillers, to joint injections and surgeries such as micro fracture, which is based on drilling small holes in the bone to cause blood flow that helps cartilage develop - to joint replacement in more advanced cases.
In August 2021, Juventus, which had invested in Carthill a year earlier at a value of 180 million dollars, announced that it had decided to exercise an option for its purchase and purchase the entire holdings of the company at a value of 500 million dollars.
The deal was canceled and the amount paid at the closing of the deal - $100 million - remained with Carthill's shareholders. The shares she received in Juventus were cancelled, and she transferred an additional 10 million dollars to the company's coffers as agreed compensation, in favor of continuing her activities. Bioventos is a spin-off company of Smith & Nephew, which is now acquiring Carthill.