GET A PIECE OF CYTEXORTHO
One Biodegradable Implant. Full Joint Restoration.
$465,824.89 Raised
REASONS TO INVEST
Highly Validated Technology – Our technology is backed by over 20 years of award-winning research, with 5 U.S. patents issued, and over $17M in non-dilutive NIH grant funding. Our publication record, patents, and funding success underscore the novelty of our approach to joint regeneration.
Projected Market Opportunity – The hip preservation U.S. Market Opportunity is estimated in excess of $4B and is growing at 18%+ per year.* Joint preservation solutions are desperately needed in the young and active patient, and there are few competing technologies in this sector.
Expert Leadership – CytexOrtho has assembled a team of experts in cartilage tissue engineering, medical device development, and hip preservation. Founded by some of the world's leading scientists in cartilage engineering, and joined by world-renowned physicians and experienced businessmen, CytexOrtho is positioned for success.
*Calculated based on data from the Center for Disease Control, Arthritis Foundation, American Academy of Orthopaedic Surgeons, and Singh et al. J Rheumatol. 2019;46(9):1134-40.
Revolutionizing Osteoarthritis Treatment
CytexOrtho solves joint pain at the source and preserves joints, rather than replacing them. We exist to level up the quality of life for the millions of people who suffer from chronic joint pain and offer a true, permanent solution to joint damage and/or osteoarthritis (OA).
Young patients aged 18 to 55 years old with cartilage disease are currently without any surgical treatment options that will fully restore their mobility, short of a complete (and temporary) joint replacement. Our revolutionary cartilage restoration implants serve as effective alternatives and will enable orthopedic surgeons to proactively preserve the hip joint for a young market, offering the solution many patients have been waiting for.
*Thomas P. Vail is on the Clinical Advisory Board for CytexOrtho.
The implant is manufactured using a unique combination of part 3D-printing and part 3D-woven textile. The result is an implant that has been engineered to mimic the functionality of healthy joint tissues. The completely biodegradable/bioabsorbable material augments natural tissue regeneration while restoring joint function and mobility. The flexible design and manufacturing allows the CytexOrtho implant to easily be reconfigured for treating other joints such as the knee, ankle, and shoulder. As such, CytexOrtho’s implant technology has true platform potential.
Since our founding, CytexOrtho has won numerous state and federal grants recognizing the novelty of our research and our products’ enormous potential to transform joint care. The co-founders of CytexOrtho, Drs. Guilak, Estes, and Moutos recently won the Kappa Delta Elizabeth Winston Lanier award from the American Academy of Orthopaedic Surgeons (AAOS). This award recognizes research in musculoskeletal disease or injury that's forecasted to have the greatest impact and advancement on patient care. The Kappa Delta awards are one of the highest honors in the field of orthopedic research.
Our surgical implants are past the design phase and animal testing was successful. We are currently in the process of submitting the appropriate materials to the FDA so we can begin clinical trials and move forward to market launch.
The Problem
Distinct Lack of Treatment Options for Young OA Patients
Osteoarthritis isn’t just a painful problem through which people have to suffer, it is also a costly one, and exerts a tremendous burden on the economy. In the U.S. alone, over 32.5 million people suffer from OA, and the direct and indirect costs of OA, such as medical expenditures, lost wages, and quality of life, exceeds more than $136 billion per year. (source)
While the elderly population is the typical age group associated with OA, there are still millions of people between the ages of 18-55 who suffer as well.
(source)
While these patients have youth on their side, the damaged cartilage will not heal on its own and will inevitably progress to OA. Unfortunately, they lack effective surgical options other than a total joint replacement. This puts orthopedic surgeons and patients in a bind – the patient either suffers with the disease until they are older, or the joint is replaced at an early age, knowing that a replacement will limit activity level and lifestyle and that it will ultimately get worn down and require another replacement.
There is a Major Treatment Gap in OA Therapy
A compromised hip joint affects a person’s quality of life, but a hip replacement in the young also affects their quality of life. A total hip replacement should not be the only answer to OA. While a total joint replacement is appropriate for older patients, it is not ideal for younger, more active patients. This is because the average implant needs replacing after 15 to 20 years. If a hip is replaced when the patient is in their 40s or 50s, a revision surgery is almost guaranteed a decade or two later. The surgery also is likely to leave a less stable joint the second time around and is prone to more complications than the first one.
We believe these patients and their doctors deserve a better, less invasive alternative, to a total hip replacement.
The Solution
A Biodegradable Implant to Restore Joint Cartilage
CytexOrtho’s novel joint restoration implant is made by bonding a high-performance, highly engineered textile structure with a 3D printed component. The integrated structure is made from biodegradable materials that restore the joint contours while integrating with the surrounding tissues of cartilage and bone.
*Products are in development. This is potential future technology and not approved by the FDA and not commercially available.
These implants are designed to act as a load-bearing surface for immediate movement and mobility of the joint after surgery. This surgery will require no biologic glue, sutures, screws, or other fasteners, and it dissolves over time, leaving only the patient’s own tissues once healed. This leaves open the option for a repeat procedure if necessary down the line, or allows conversion to a total hip replacement once the patient reaches a more appropriate age for such.
*Images are computer generated for demonstration purposes only.
What’s truly exciting about our implants, however, is their versatility. While we're focusing on hip joints for our initial market entry, the CytexOrtho implant can easily be made to match the geometry of the contours in any joint due to the design and flexibility we built into the manufacturing process. This will allow us to translate use of our technology to the treatment of other joints, such as knees, ankles, and shoulders.
CytexOrtho plans to sell our implants to hospitals directly for $5,000 per unit, with an estimated cost of goods of approximately $350 per unit.
*Products are in development. This is potential future technology and not approved by the FDA and not commercially available.
The development of CytexOrtho's implants is being guided by recognized experts in hip surgery, hip preservation, and the clinical evaluation of cartilage repair techniques. This ensures that our products meet the real world needs of the orthopedic community. Our Clinical Advisory Board is comprised of Dr. John Clohisy, Washington University; Dr. Paul Beaulé, University of Ottawa; Dr. Young-Jo Kim, Harvard Medical School; Dr. Thomas Vail, University of California, San Francisco; and Dr. Hollis Potter, Hospital for Special Surgery.
The Market
Untapped Market Potential
Overall, the younger patient population, with either hip-related OA or prearthritic disease, represents a growing and tremendous clinical need and is the initial target market for CytexOrtho implants.
The total addressable market for CytexOrtho’s novel implants exceeds $4B; however, our initial market entry will be targeting patients affected with prearthritic hip disease that ultimately leads to OA.* One prearthritic disease state that is on the rise is femoral acetabular impingement (FAI) - as many as 25% of men and 10% of women show radiological deformities that make them susceptible to hip disease and OA. While many of these patients were not presenting with chronic pain, the evidence of abnormalities in the general population starts to explain the growing FAI market. This growing interest in FAI disease is clearly evidenced in the number of publications that have steadily grown to over 1500 publications in the medical and scientific literature in the previous year alone.
*Raveendran R, Stiller JL, Alvarez C, Renner JB, Schwartz TA, Arden NK, Jordan JM, Nelson AE. Population-based prevalence of multiple radiographically-defined hip morphologies: the Johnston County Osteoarthritis Project. Osteoarthritis Cartilage. 2018;26(1):54-61
(source)
Along with FAI, other conditions such as trauma, osteonecrosis, and joint deformity add to the young patient population in need of alternatives to hip replacement. As a result, patients and surgeons alike are seeking techniques and procedures for joint preservation.
Defining the market further, there are approximately 1 million adults in the U.S. under the age of 65 who have severe hip pain due to arthritis (OA).1 Yet, only 1 out of 5 of these patients will elect to have a hip replacement.2 The current hip replacement market size in the U.S. is valued at $2.3B and is growing at a CAGR of 5.3% between 2021-2028.3 The approximate 50% of these patients who are under 65 years of age plus the 80% of patients who currently do not elect a hip replacement define the potential market opportunity for CytexOrtho’s implant. Assuming only a modest 20% of this patient population can be addressed by CytexOrtho’s technology, the market potential is in excess of $1B US dollars.4
*Products are in development. This is potential future technology and not approved by the FDA and not commercially available.
Beyond these initial entry points, Cytex implants could be used for the restoration of other joints, specifically the knee and ankle, both of which carry significant market potential.
1. Information for internal marketing research provided by the Center for Disease Control and the Arthritis Foundation. (source)
2. Based on the article Singh JA, Yu S, Chen L, Cleveland JD. J Rheumatol. 2019;46(9):1134-40.
3. Hip Replacement Market Size, Share & COVID-19 Impact Analysis, By Procedure (Total Replacement, Partial Replacement, and Revision & Hip Resurfacing), By End-User (Hospitals & Ambulatory Surgery Centers, Orthopedic Clinics, and Others) and Regional Forecast, 2021-2028. Report ID: FBI100247. (source)
4. Information based on internal research conducted by CytexOrtho.
Our Traction
Our Cutting-edge IP is Patented, With Clinical Studies Beginning Next Year
Given the novel nature of our implant, CytexOrtho has been intentional about developing an intellectual property portfolio to protect its interests, particularly in the United States, but also in strategic countries throughout the world where the market is large for innovative medical products and procedures. In the U.S., we have secured five different patents that cover the technology, cartilage repair processes, and surgical methods for resurfacing joints, providing us with an advantageous market position inside this untapped industry.
Our diligence has already paid off. With more than $17 million in non-dilutive funding, CytexOrtho is poised to take the next step, which is patient trials. We are currently preparing for the FDA IDE submission that will enable our first clinical trial, scheduled for next year.
Why Invest
CytexOrtho is Committed to Helping Millions Living with OA
CytexOrtho’s groundbreaking surgical implant is one of the first viable solutions to give the millions of patients suffering from hip disease hope for a better life.
We have the tech, team, and traction to innovate in an untapped hip preservation market within the orthopedic surgery space. Moreover, we believe the versatility of our implant will make it the go-to treatment option for those suffering from joint damage and OA.
With the targeted amount of funds we are seeking to raise in the short-term, we expect to continue to drive and expand the hip implant indication and use, while extending our product portfolio to other joints as well.
*Paul Beaulé is on the Clinical Advisory Board for CytexOrtho.
Join us on our journey to revolutionize osteoarthritis treatment, and become a shareholder in CytexOrtho today.
ABOUT
HEADQUARTERS
2609 N. Duke Street, Suite 303A
Durham, NC 27704
WEBSITE
View Site
CytexOrtho is a healthcare startup that is developing technology and solutions for younger patients with hip pain to address early joint degeneration. The company’s lead product is a cutting-edge biodegradable medical implant that restores joint cartilage and bone instead of replacing it with artificial materials found in a total joint replacement. While this product is not yet commercially available, CytexOrtho is currently preparing for an FDA IDE submission to begin clinical trials for it and expects to begin these trials in 2023.
TEAM
Bradley Estes, PhD
CEO
Franklin Moutos, PhD
VP Technology
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Farshid Guilak, PhD
Board Chair, Co-founder
Dave Nolan
Non-executive Director
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Barry Myers, MD, PhD
Non-executive director
Christine Estes
Director of Business and Finance
Vincent Willard, PhD
Director of Research
Nikhil Gheewala, PhD
Director of Product Development
Laura Tormey
Manager of Product Development
Tara Boykin
Administrative Assistant
TERMS
CytexOrtho
Overview
PRICE PER SHARE
$2
DEADLINE
Jan 25, 2023
VALUATION
$18.18M
FUNDING GOAL
$10k - $1.07M
Breakdown
MIN INVESTMENT
$250
MAX INVESTMENT
$100,000
MIN NUMBER OF SHARES OFFERED
5,000
MAX NUMBER OF SHARES OFFERED
535,000
OFFERING TYPE
Equity
ASSET TYPE
Common Stock
SHARES OFFERED
Series B-CF Non-Voting Common Stock
Maximum Number of Shares Offered subject to adjustment for bonus shares
*Maximum number of shares offered subject to adjustment for bonus shares. See Bonus Share info below.
Time-Based:
Friends and Family Early Birds Bonus
Invest within the first 72 hours and receive 20% bonus shares. Please note that bonus shares are not cumulative with later time-based bonuses.
Super Early Bird Bonus
Invest within the first 7 days after launch date and receive 15% bonus shares. Please note that bonus shares are not cumulative with later time-based bonuses.
Early Bird Bonus
Invest in the second week after launch and receive 10% bonus shares.
Amount-Based:
Tier 1 | $500-$999
Investor’s Club membership, which provides quarterly updates
Tier 2 | $1,000-$1,999
Receive 5% Bonus Shares + Investor’s Club membership
Tier 3 | $2,500-$4,999
Receive 10% Bonus Shares + Investor’s Club membership. Please note that bonus shares are not cumulative with lower tier bonuses.
Tier 4 | $5,000-$9,999
Receive 15% Bonus Shares + Investor’s Club membership. Please note that bonus shares are not cumulative with lower tier bonuses.
Tier 5 | $10,000-$24,999
Receive 20% Bonus Shares + Investor’s Club membership + meet the founders on a video call (or in person at investor expense). Please note that bonus shares are not cumulative with lower tier bonuses.
Tier 6 | $25,000+
Receive 25% Bonus Shares + Investor’s Club membership + meet the founders on a video call (or in person at investor expense). Please note that bonus shares are not cumulative with lower tier bonuses.
*In order to receive perks from an investment, one must submit a single investment in the same offering that meets the minimum perk requirement. Bonus shares from perks will not be granted if an investor submits multiple investments that, when combined, meet the perk requirement. All perks occur when the offering is completed.
The 10% StartEngine Owners' Bonus
Cytex Therapeutics, Inc. will offer 10% additional bonus shares for all investments that are committed by investors that are eligible for the StartEngine Crowdfunding Inc. OWNer's bonus.
This means eligible StartEngine investors will receive a 10% bonus for any shares they purchase in this offering. For example, if you buy 1000 shares of Series B-CF Non-Voting Common Stock at $2.00 / share, you will receive 1100 shares for $2000. Fractional shares will not be distributed and share bonuses will be determined by rounding down to the nearest whole share.
This 10% Bonus is only valid during the investors eligibility period. Investors eligible for this bonus will also have priority if they are on a waitlist to invest and the company surpasses its maximum funding goal. They will have the first opportunity to invest should room in the offering become available if prior investments are canceled or fail.
Investors will receive the highest single bonus they are eligible for among the bonuses based on the amount invested and time of offering elapsed (if any). Eligible investors will also receive the Owner’s Bonus in addition to the aforementioned bonus.
Important Provisions in your Subscription Agreement
Pursuant to the subscription agreement the Company may require Investors to establish an account with StartEngine Primary LLC so that the Securities can be recorded on the books of the Company as being held by the StartEngine Primary, LLC as “Nominee” in omnibus as legal holder of record of the securities. If this election is made Investors will appear on the books of the Nominee as the beneficial owner of the Securities. Each Investor agrees that in the event it does not provide information sufficient to effect such arrangement in a timely manner, the Company may repurchase the Securities at a price to be determined by the Board of Directors. Each Investors further agrees to transfer its holdings of securities issued under Section 4(a)(6) of the Act into “street name” in a brokerage account in Investor’s name, provided that the Company pay all costs of such transfer. Each Investor agrees that in the event it does not provide information sufficient to effect such transfer in a timely manner, the Company may repurchase the Securities at a price to be determined by the Board of Directors.
The subscription agreement also includes drag-along provisions which limit holders of Securities from voting against or exercising appraisal rights in the event of a change in control of the Company meeting the conditions of the drag-along provisions.
In addition, your subscription agreement provides that, notwithstanding anything contained in the Organizational Documents to the contrary, if the Board of Directors determine in good faith that issuance or delivery of shares of capital stock or other securities (the "Future Securities") to any investor in connection with any recapitalization or change in control of the Company, irrespective of whether it is related to the exercise of any drag-along provisions set forth in the Organizational Documents, would violate applicable law, rule or regulation (including without limitation applicable state law or the Securities Act), then your right to receive the Future Securities (or to make a choice about the form of consideration to be received in such transaction) may be limited and you may be required to accept a cash payment equal to the fair market value of such Future Securities, as determined in good faith by the Board of Directors.
Please review the subscription agreement you will sign in connection with this offering and Company’s Charter and Bylaws (the “Organizational Documents”) for more information. A copy of the Organizational Documents in included as an exhibit.
Irregular Use of Proceeds
The Company may change the intended use of proceeds if our officers believe it is in the best interests of the company. The Company has full discretion to alter the use of proceeds set forth above to adhere to the Company’s business plan and liquidity requirements. For example, economic conditions may alter the Company’s general marketing or general working capital requirements. If we raise more than $2.5 million from this offering in combination with other financings between December 6, 2022 and December 6, 2023, we will be required to repay all or a portion of the outstanding balance on our NC Biotechnology Center loan. These payments may not be triggered by this offering so are not reflected in our discussion of Uses of Proceeds. Some of the proceeds from this fundraising event will be used to pay the salaries of the Company’s executives, officers, and directors along with the rest of its employees. The salaries for these positions vary, but currently fall in the range of $50,000 - $150,000 per year. Some of the proceeds may also be used to pay stipends to our Independent Directors. Independent Directors’ stipends are anticipated to be approximately $10,000 per year. As discussed above, we compensate our executive officers and members of our board of directors and have entered into service contracts with these individuals. The Company has been primarily grant funded since its inception. Due to the nature of grant awards, only a very limited amount of these awards may be used to pay staff salaries, as the majority of each award is intended to fund research endeavors. Because of this, the Company is in need of additional capital to support the salaries of all of its staff, which includes some employees who are also executives, officers, and directors. Therefore, some of the proceeds from this fundraising event will be used to pay the salaries of the Company’s executives, officers, and directors along with the rest of its employees. The salaries for these positions vary, but currently fall in the range of $50,000 - $150,000 per year and may be supplemented with an additional annual bonus equaling 10-15% of annual salaries. Some of the proceeds may also be used to pay stipends to our Independent Directors. Independent Directors’ stipends are anticipated to be approximately $10,000 per year. The Company will also use the proceeds of this fundraising event to pay its vendors, some of whom will be paid in excess of $10,000. These vendors may provide research services to support the advancement of the Company’s products towards commercialization, or they may provide other products or services that the Company needs to conduct business, such a lease payments, health insurance for the Company’s staff, intellectual property fees, or fees to StartEngine.
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0/2500
Don Ortega
8 months ago
I really want to invest. I would feel a lot more confident investing if I knew I was a candidate for this treatment. What makes someone a good candidate? Can the joint be beyond a certain point of damage where a hip replacement would have to be used? Say for someone in their early forties. If you have a link for this information I have no problem reading through it.
thanks!
1
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Linda Grock
9 months ago
You said that this is for younger patients why? Are older patients not good candidates for CytexOrtho?
1
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Roger Austin
a year ago
Congratulation on the $1.2 NIH grant.
1. What FDA indications is CytexOrtho initially seeking?
2. What FDA indications might CytexOrtho eventually seek?
3. Is there an upper age limit to a CytexOrtho patient, and if so, what would that age be (you mention targeting 18-55 yo and an "initial target market)? Will people older than 55 eventually be able to benefit from a CytexOrtho implant?
4. Which will proceed quicker, human studies or studies in dogs and which will come to market first?
5. What is the "life expectancy" of a joint treated with a CytexOrtho implant? Is it a cure, or a bridge to a hip replacement?
6. What does recovery after receiving a CytexOrtho hip implant in humans expect to look like?
7. Can the same hip receive multiple CytexOrtho implants over time?
8. If a patient meets criteria for a hip replacement, when would that patient also be a candidate for a CytexOrtho hip implant and when would that patient not be a candidate for a CytexOrtho hip implant?
9. How would you estimate the ranking and ballpark size of the market potential of the various joints that could benefit from CytexOrtho (ie hips about 40%, knees 30%, shoulders 20%, etc)?
10. How complicated would the procedure be compared to other procedures orthopedists perform? How long to train and become proficient?
11. What does your current roadmap look like (safety trials, efficacy trials, seeking FDA approval, future fundraising, future grant applications, scaling, liquidity event, etc)?
12. Will human trials occur at Duke or somewhere else?
13. Has a cost comparison analysis been done on a CytexOrtho hip implant vs a hip replacement and, if so, how do they compare?
Thanks, and congratulations again.
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Richard Koch
a year ago
I'm having trouble envisioning the revenue stream in the out years (assuming you receive all the governmental blessings necessary to proceed.) How do you envision revenue sources, aside from the obvious of providing implants. Are there other support tasks and services you plan to provide? (Not that this isn't a swell idea)
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kevin ward
a year ago
would this work for arthritic knees?
1
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Charles Reinwald
a year ago
This might work well in conjunction with Quince Therapeutics bone growth stimulating drug, NOV004, which had good results in animal trials.
1
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Wilbur Robinson
a year ago
Your SEC filing notes several competitors. It appears those competitors focus primarily on knee cartilage. Have you identified competitors in this space who are focused on hip cartilage?
1
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Wilbur Robinson
a year ago
When will recruitment for Phase I trials begin and how long do you anticipate that trial running?
1
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Mark Lehberg
a year ago
I have the following questions:
• Has the Company previously raised any outside capital, e.g., angel investors, friends and family, etc. Or, has the Company been self-funded up to this point in time?
• If the Company has raised any outside capital:
o from whom (e.g., angels, friends and family, etc.), and
o what securities were issued to the investors, e.g., common shares, preferred shares, convertible note, etc.?
• When you say “small raise”, how much are you looking to raise (e.g., $250,000, $750,000 or more than $1M)?
• How long will that amount last? That is, if you raise $500,000 when will you need to raise more money?
• For those investing, what security will they received, e.g., common stock, preferred stock, convertible note, etc.?
o If preferred stock, what are the rights of the preferred stock holder?
o If common stock, what happens to the common stock holders when the Company raises its first round of venture capital when the VCs will want preferred stock? For example, does the common convert to preferred so that the initial investors are in the same position as the preferred shareholders?
• Is there a limit as to a minimum investment or a maximum investment by friends and family at this stage?
• Is the Company an LLC, S-Corporation, C-Corporation or some other legal entity?
• If an LLC, will you please send us a copy of the LLC Operating Agreement?
• Does the Company have written agreements with each founder and each employee and contractor pursuant to which each founder, employee and contractor has assigned to the Company all the intellectual property that he/she developed for or that is related to the Company’s technology and IP?
• Have you applied for any patents? If so, how many?
• Have any animal testing/studies been done to analyze safety, toxicity, and/or efficacy? If so, what were the results?
• Is there a business plan or offering memorandum that you can share that details the Company’s business and business plan?
• If you or Brad or any of the other founders employed by or contracting with other companies and if so does CytexOrtho technology relate to the products or technology of these other employers/companies?
• Who is the Company using for legal counsel to advise on things like FDA, securities, IP protection, etc.?
• Did the technology originate at a University or using University funding, facilities or personnel? If so, does the Company have a license agreement with the University?
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Catherine Kahn
8 months ago
1
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