In Cartilage Repair Histogenics Resets The Stage

Article preview from Start-Up - September, 2012

In July Histogenics Corp. raised $49 million in a Series A recap round that will help it complete a Phase III clinical trial in articular cartilage repair. The deal also shows that Histogenics’ novel strategy for getting through the mid-stage funding gap was a success.

 In Cartilage Repair Histogenics Resets The Stage

Article preview from Start-Up - September, 2012

In July Histogenics Corp. raised $49 million in a Series A recap round that will help it complete a Phase III clinical trial in articular cartilage repair. The deal highlights the success of Histogenics’ novel strategy for getting through the mid-stage funding gap.

A year ago, Histogenics was struggling through that awkward point in a start-up’s life: the mid-stage funding quagmire, a place where investors don’t like to set foot these days. Early- and very-late-stage deals still find backers but the company that is still in the midst of a lengthy clinical trial after years of investment is often stranded. Finding itself in this position, Histogenics crafted a novel solution to this funding gap and judging by the latest financing round, it worked. First-time investor Sofinnova Ventures led the round, joined by other first-time backers Split Rock Partners, BioMed Ventures, and FinTech GIMV Fund. Returning shareholders include ProChon Holdings, Altima Partners, Foundation Medical Partners, Inflection Point Capital, and Boston Millennia Partners.

Histogenics’ strategy was to merge with ProChon Biotech Ltd., a fellow start-up in knee cartilage repair at a similar stage of development and with complementary technologies. Histogenics’ lead product, NeoCart, is an implant made up of a patient’s own cells placed in a three-dimensional matrix. ProChon was developing BioCart, a cartilage regeneration implant incorporating fibroblast growth factor variants, a technology with therapeutic applications in its own right but with additional uses in enhancing the efficiency of cell processing. As Histogenics’ CEO Patrick O’Donnell describes it: “We merged a cell therapy company with a tissue engineering company to form a broader regenerative medicine company with internal developments focused on articular cartilage regeneration.” The new Histogenics would have a greater breadth of intellectual property – 91 issued patents and applications to date – and new skills that would deliver improvements to next-generation articular cartilage repair products.

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