CartiHeal, founded in 2009 by Altschuler in collaboration with Ben-Gurion University, raised $74 million from venture capital funds aMoon, Elron, Peregrine Ventures, Access Medical Ventures, Pertec, Accelmed, and JJDC - the venture capital fund of J&J. The company employs 25 people, with 22 in Israel (Kfar Saba) and the rest in the U.S. Elron, one of the investors in the company, is expected to receive approximately $47 million in cash upon completion of the transaction, and approximately an additional $40 million to be paid when the sales milestone is reached. In addition, $33 million were distributed as a dividend to shareholders following the cancellation of the Bioventos deal.

According to Altschuler, "The CartiHeal implant, defined by the FDA as a breakthrough technology, is extracted from the calcium of corals and is surgically implanted by orthopedic surgeons into the infected area. The company received FDA approval in March 2022, after completing a clinical trial that lasted several years and included hundreds of patients in 26 centers in the U.S., Europe, and Israel. The trial showed the distinct advantages of the implant over existing procedures, including the ability to regrow cartilage."

The company's Agili-C product is an off-the-shelf one-step treatment for osteochondral (bone and cartilage) lesions with a broader indication than existing treatments. It is indicated to treat a wide patient population, including those with lesions in knees with mild to moderate osteoarthritis, a currently unaddressed condition, as well as the approximate 700,000 patients that receive cartilage repair annually in the U.S. In April 2022, the company announced that it would be acquired by the American Bioventus, after the latter became a strategic investor in the company as part of one of the funding rounds. As part of the investment, Bioventos received the option to purchase CartiHeal, and upon receiving FDA approval, Bioventos decided to exercise the option. The purchase price was set at $440 million ($100 million in cash). It soon became clear that the buyer would not be able to complete the transaction due to its high levels of leverage, the increase in interest rates, due to the fall in the bond market and changes in the insurance reimbursement policy in the hyaluronic acid injection market, its main sales area, which led to the collapse of its stock. In the first quarter of 2023, Bioventos announced that it would not be able to complete the purchase of CartiHeal according to the established outline, and the parties reached an agreement on the cancellation of the transaction.

After the cancellation of the deal, Altschuler, the founder of the company, returned to manage it. Altschuler, who served as the CEO of CartiHeal from the day of its establishment in 2009 until the signing of the purchase agreement by Bioventos, was called upon by the company's board of directors, who asked him to prepare the company both for the process of finding a new buyer and for the start of commercialization in the U.S.

Last July, the company began successfully marketing the implant in leading hospitals in the U.S. after building a sales team, and at the same time managing an acquisition process led by the investment bank JP Morgan. "The last year has been very challenging on a personal and professional level," said Altschuler about returning to the CEO's chair. "It was not trivial for me to return to the company, but CartiHeal is like my child. This is a company that I founded and managed for 14 years. I couldn't say 'no'. I put everything aside and mobilized for the cause. With the help of the excellent staff in a short time, we were able to start marketing, which is gaining momentum among the leading surgeons in the U.S., and at the same time, we conducted a successful negotiation with S&N."

S&N expects that CartiHeal will break even by 2027 and that the return on invested capital (ROIC) will exceed the weighted cost of capital, i.e., the interest costs for all invested capital, including debt (WACC), by the end of the fifth year of the deal. CartiHeal will start generating initial revenues as early as next year.

S&N, which has been operating for over 160 years, is a company that owns an extensive portfolio of medical technologies aimed at extending life expectancy and improving quality of life. The company, which employs 19,000 people, focuses on the repair, restoration, and replacement of soft and hard tissues and is considered one of the top 5 companies in its field globally. S&N is active in over 100 countries, has an annual revenue turnover of over $5 billion and is traded on the main London Stock Exchange and the New York Stock Exchange.

“The acquisition of this disruptive technology supports our strategy to invest behind our successful Sports Medicine business”, said Deepak Nath, Chief Executive Officer of Smith+Nephew. “Agili-C’s superior clinical performance makes it highly complementary to our existing knee repair portfolio and with our proven commercial expertise in high-growth biologics, we are confident that we will drive further success from this compelling treatment option.”