ConforMIS (Burlington, Massachusetts), a private device company that makes custom implants and instruments for osteoarthritis treatment and joint damage, said it has raised $50 million – its largest round of funding to date – from private-equity and sovereign-wealth funds in the U.S., Asia, Europe and the Middle East. ConforMIS reached this milestone in June, in a process that began in 2008, the company said.
In an economic climate that seems to be impacting companies across the board, ConforMIS sees this financing as a testament to the unique technology it has developed.
"We are very happy we were able to raise this in a pretty volatile external financial environment," Philipp Lang, MD, CEO and chairman of ConforMIS, told Medical Device Daily. "On one side [it shows] healthcare continues to be good business and on the other side it attests to the very unique value proposition that our technology brings to the table."
ConforMIS says it has developed the only line of patient-specific knee implants that are customized to precisely fit every individual patient's knee, resulting in a less painful and traumatic surgery and a quicker recovery. Competing against some of the largest knee replacement public companies like Zimmer (Warsaw, Indiana) and Smith & Nephew (London), Johnson & Johnson's (New Brunswick, New Jersey) Depuy (also Warsaw), ConforMIS says its technology designs implants and surgical instruments from CT and MRI scans to provide patients with a personalized implant.
"We're the only orthopedic company today that offers a completely patient-specific approach," Lang said.
He said traditional knee replacement uses off-the-shelf components that may require significant removal of healthy tissue during the procedure to fit the patient to the implant. "We take a completely different approach," he said. "We get the imaging data and then we make a tailor-made implant for that patient."
"With this round of funding, we believe we are well positioned to continue investing in our breakthrough, patient-specific orthopedic implant technologies. Our technology platforms provide a scalable approach to the patient-specific design and manufacture of not just the instruments, but the actual implants as well," Lang said. "With our personalized approach to both the implants and instruments, we think the potential for product and business model innovation is substantial."
ConforMIS, which was founded in 2004, says it attracted capital sources from a variety of global investors. Primary funding sources for this round include later-stage and cross-over funds and international government funds. ConforMIS is now backed by several multi-billion dollar international private-equity funds, with the single largest Series D investor being Aeris Capital (Zurich, Switzerland and Palo Alto, California). Other investors in this round include equity funds from Asia, Germany, and the Middle East, including two sovereign-wealth funds, as well as venture funds who participated in previous rounds.
The company says its technology for custom implants and instruments is supported by more than 250 patents and patent applications, including several foundational patents awarded this year. Its technology and intellectual property apply not just to knee replacement, the largest single category of orthopedics, but broadly to the over $20 billion dollar global orthopedics market, ConforMIS noted.
The company recently reported receiving a CE mark for its iDuo bicompartmental knee resurfacing system. The company had previously received the CE mark for its iForma implant and its iUni unicompartmental knee resurfacing system. All devices have been cleared by FDA for marketing in the U.S.
Jong Lee, senior VP of business strategy at ConforMIS, told MDD that the company learned a lot from its experience entering this multibillion dollar space as a small company. "The first thing is we've been surprised that despite the volatility [of the economy] there seems to be an acute interest in the healthcare innovative space . . . that innovation in healthcare is quite high across the board," Lee said. "We think we're really a unique player in the industry, no other company is taking the novel approach we are."
By personalizing the implant to the patient – instead of the other way around – Lang says the physician does not have to cut away as much bone and tissue, preserving the patient's options for future surgery. He said the surgeons and the hospitals also benefit from this image-based approach because it is a simpler surgical technique, reducing the procedure by several steps, which in turn reduces operating time. The instrumentation used for the ConforMIS procedure comes on a single tray that is fully disposable resulting in faster set up and post-operative clean up, Lang noted.
"That's the unique value for physicians that investors have recognized . . . we have a very well-rounded and efficient and clinically beneficial value proposition for the hospital," Lang said.
In other financing activity, Bioheart (Sunrise, Florida) reported that from Oct. 1, 2008 through July 7 it has received proceeds in the amount of $2,855,830 from the placement of restricted common stock and warrants under its current offering under Regulation D. The maximum number of shares of common stock to be issued in connection with the offering (including common stock underlying the warrants) is 3,737,500 shares, of which 559,351 shares are remaining. The term of the offering recently was extended through October, Bioheart said.
The company's securities counsel, Sichenzia Ross Friedman Ference, has advised Bioheart in connection with the offering, which consists of units comprised of ten shares of common stock, at a per share price that represents a 10% discount to the average of the closing prices for the company's common stock for the five trading days preceding each subscription date, as quoted on the OTCBB, together with 30% warrant coverage with an exercise price that is 120% of the per share price for the common stock comprising the unit.
Bioheart delivers intelligent devices and biologics designed to help monitor, diagnose and treat heart failure and cardiovascular diseases.