Contacts: Marc Viscogliosi, Viscogliosi Bros, LLC (212) 583-9700 ext.
Nick Kilsby, EKK PR (203) 406-8800 ext. 21
SPINAL DISC REPAIR START-UP ORTHONICS RECEIVES FUNDING FROM VISCOGLIOSI
BROS., LLC AND GRA VENTURELAB
NEW YORK – 2004 – Orthonics, Inc., an Atlanta start-up company
developing new biomaterials for spinal disc repair and regeneration,
has received initial funding from Viscogliosi Brothers, LLC, a New York-based
closely held venture capital/private equity and merchant banking firm
focused on the musculoskeletal/orthopedics industry. Terms of the funding
were not disclosed.
The funding provides the private-sector match for the company’s
Phase II grant from VentureLab, a Georgia Research Alliance program
that encourages commercialization of technologies developed in Georgia’s
research universities. The funding will allow Orthonics to continue
development of its spinal disc repair and regeneration technologies,
which are based on research from the Georgia Institute of Technology.
Spinal discs are tough, rubbery materials that separate vertebrae in
the spinal column. When damaged, they can press on nerves and cause
pain. Surgeons can remove the damaged disc and fuse the spinal vertebrae,
but that procedure greatly limits motion in the back. Orthonics’
novel biomaterials could provide a non-fusion alternative in the more
than one million spinal surgical procedures that take place each year
– an estimated $3 billion market.
"We’re extremely pleased with this investment. The Viscogliosi
Brothers have an outstanding track record in orthopedics and their investment
in Orthonics is a great endorsement of our business plan and technology,"
said Orthonics CEO Steve Kennedy. Both parties expect that Viscogliosi
Brothers will be the lead investor in a round of seed financing to take
place in a few months.
Orthonics’ technology is based on research from the laboratory
of Barbara Boyan, the Price Gilbert, Jr. Chair in Tissue Engineering
and deputy director of research for the Georgia Tech/Emory Center for
the Engineering of Living Tissues. (Boyan is also the Georgia Research
Alliance Eminent Scholar in Tissue Engineering.) The company’s
technology includes an improved hydrogel biomaterial and a novel surface
patterning technique used to create a more natural attachment between
the artificial material and bone or cartilage tissues.
"We have a technique for creating micropatterns on the biomaterial’s
surface that cause cells in contact with it to behave in a specific
way," Kennedy said. "By designing the surface properly, we
can cause cells that are precursors to bone cells to become bone cells
and start making bone, and we can cause cells that are precursors to
cartilage cells to become cartilage cells and start making cartilage."
The ability to control cell differentiation and cause the incorporation
of new bone and cartilage tissue into the artificial material may allow
Orthonics’ devices to replace or repair portions of the spinal
disc while eliminating the need for devices such as screws for attaching
the company’s "bionic" materials to spinal vertebrae.
"The natural cells that are in contact with the prosthetic device
are tricked into thinking that it is bone, and this causes them to attach
to the biomaterial and start growing new bone or cartilage," he
explained. "The device will then become naturally attached to the
bone. This eliminates the need for spikes and screws and allows us to
repair just the damaged portion of the disc annulus or nucleus without
having to replace the entire disc. We also expect to be able to repair
the facet joints in the spinal column to relieve the debilitating pain
associated with the degeneration of those joints."
The ability to control natural repair processes at the cellular level
could be used to stimulate regeneration of the damaged portions of the
disc, a process that normally occurs very slowly – or not at all
in older patients. The Orthonics hydrogel material does not cause inflammatory
reaction in the body, and is expected to last longer than current materials
used in implantable devices, Kennedy said.
Proof-of-principle commercialization work on the technology has been
supported by a Phase I VentureLab grant. Kennedy and Boyan have been
working together under the auspices of Georgia Tech’s VentureLab
program for about a year, and formed Orthonics in December of 2003.
Two provisional patent application requests have been filed.
Kennedy praised the VentureLab program – and Georgia Tech’s
interdisciplinary research program – for making rapid progress
possible. The company is operating in the ATDC Biosciences Center, a
science and technology incubator located in Georgia Tech’s Environmental
Science and Technology Building.
"Georgia Tech has a world-class biosciences center and an abundance
of state-of-the-art resources in other areas," he said. "To
accomplish the micropatterning, for example, we needed to do micro-electromechanical
systems (MEMS) microfabrication. Those resources were available at Georgia
Tech’s Microelectronics Research Center – which is right
across the street from the ATDC Biosciences Center. This project couldn’t
have happened at very many other places."
Pre-clinical animal trials of the disc material could begin later this
year, followed by clinical trials in humans by 2006. Like other medical
devices, the spinal disc repair and regeneration materials will require
approval from the U.S. Food & Drug Administration.
The investment firm has been following Boyan’s work for several
"Barbara Boyan’s reputation and credibility in this technology
made this investment attractive to us," said Marc Viscogliosi,
a principal and co-founder of Viscogliosi Brothers. "We are very
pleased to be working with the Georgia Institute of Technology. We’ve
been impressed with the Georgia Tech VentureLab program, and with what
the ATDC Biosciences Center can offer to early-stage biomedical companies.
We’re looking forward to taking this company to the next level."
Supported by the Georgia Research Alliance – a private non-profit
corporation that supports commercially-relevant research at Georgia
universities – the VentureLab Seed Grant program provides funding
to faculty members to advance promising technologies. Phase I grants
support validation of the technology, while Phase II grants –
which require an investor match – support creation of a prototype
designed to make the technology attractive for larger private investment.
About Viscogliosi Bros., LLC
Established by Marc R. Viscogliosi, John J. Viscogliosi and Anthony
G. Viscogliosi in New York City in 1999, VB was the first venture capital/private
equity and merchant banking firm dedicated to the musculoskeletal/orthopedics
sector of the health care industry. Today, VB is a leading independent
firm with a mission to create, build and finance companies founded on
innovations developed by surgeons and uniquely focused on "life
changing" musculoskeletal/orthopedic technologies. VB has worldwide
surgeon, industry and trade relationships and significant financial
expertise in the musculoskeletal/orthopedic sector.
As principals of VB, the Viscogliosi brothers have a combined total
of more than 35 years experience analyzing and investing in the musculoskeletal/orthopedics
sector. The have pioneered innovative financial, strategic and management
initiatives for companies in the sector, from start-up, seed and development
stage all the way to exit, while helping thousands of people lead better
lives through the orthopedic and spinal products marketed and sold by
the companies they have assisted in developing and financing.
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