Orthospace, which is developing a support product for shoulders following severe rotator cuff tears, has raised $8 million, led by Healthpoint Capital and with the participation of existing investors - Triventures and medical devices company Smith and Nephew.
Publicly traded holding company Xenia Venture Capital Ltd. (TASE:XENA) took advantage of the opportunity to sell its holdings in the company for $2.15 million, and made a profit of NIS 6.2 million on its original investment. Xenia's shares were sold to Healthpoint Capital. In its announcement to the Tel Aviv Stock Exchange (TASE) today, Xenia said that some of the company's first investors sold their shares to Healthpoint. The list of investors in the company (not all of whom exercised their holdings) includes VSLI, a fund that supports ventures involving cooperations between companies in Israel and in the State of Virginia, the angel investors' club AJJS, the start-up accelerator Viasci, and Arthocare.
OrthoSpace was founded in Xenia's start-up incubator as a BioProtect spin-off, which developed a balloon to separate healthy tissue from an enlarged prostate, so that radiation may be performed on the prostate without damaging surrounding healthy tissue. It later became clear that a balloon manufactured using similar technology can serve also as a treatment for rotator-cuff tears. The balloon acts as a buffer for the injured part of the shoulder in a manner that reduces pain, and then degrades gradually as the tear heals, obviating the need for invasive surgery. It was on this basis that OrthoSpace was founded in 2009. The company has raised $8.3 million to date (excluding the current investment round), according to IVC data.
Triventures, which has invested in the company, stated that the company sells its product successfully in the European market, is already close to operating breakeven, and that thousands of procedures have so far been performed using the device.
OrthoSpace CEO Itay Barnea said the company is prepared for international growth in a market in which, as of now, there not many good alternatives: "What sets us apart is that we answer to the needs of a large group of patients who are classified as 'chronic' - people who are relatively old, with poor tissue quality, which causes them to react less well to invasive procedures such as tendon repair and shoulder replacement. OrthoSpace is a very minimally-invasive procedure, which takes just minutes in the operating room. We are not attempting to fix anatomy that can no longer be fixed, rather to provide a tool that relieves the patient from pain, and helps him or her undergo physiotherapy and rehabilitation. The doctors don't intend to turn these people into athletes, rather to bring them back to normal function and to relieve them of pain."
Published by Globes [online], Israel business news - www.globes-online.com - on May 20, 2015
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