A Naples-based medical device manufacturer has closed on another round of funding to support its rapid growth.
Catalyst OrthoScience has raised $12.3 million in new capital, including $952,000 from local investors.
The homegrown company, founded in 2014, is now in its fourth stage of equity financing.
Including the financing provided earlier, local investors with Tamiami Angel Funds have now put $2.38 million into the local firm. That’s more than they’ve invested in any other company in their portfolio.
Angel investors are usually the first investors in a business, with wealth and knowledge, sort of like those seen on the hit TV series “Shark Tank.” They’re often followed by venture capital firms, then private equity firms.
“When we launched the Tamiami Angel Funds over a decade ago, our goal was to identify and invest in promising Florida companies, and we are proud to say our largest investment to date is in our hometown,” said Timothy Cartwright, the funds’ chairman and a partner in the Fifth Avenue Family Office in Naples, in a news release.
Catalyst OrthoScience and its founder Steven Goldberg — the creator behind its innovative technology — represent “the spirit of entrepreneurship we seek to encourage as an overarching strategy to diversify Southwest Florida’s economy,” Cartwright added.
Catalyst’s latest fundraising campaign netted the company more money than it sought.
The new funding will support its growth and more innovation, said Brian K. Hutchison, the company’s chairman and CEO, in a news release.
“This funding round comes at a pivotal time for the Catalyst OrthoScience team,” he said. “We are experiencing a significant period of growth, and this funding allows us to enhance our innovative product portfolio with further technological advancements in the shoulder arthroplasty space and expand our team across all areas.”
What is arthroplasty?
Arthroplasty involves the replacement or repair of a diseased joint.
A Naples orthopedic surgeon, Goldberg developed the new technology because he didn’t like his other options for shoulder replacements.
His goal is to make the surgery less invasive and more efficient for both surgeons and patients.
Catalyst has a growing portfolio of patents on its surgical offerings, with other patents pending.
Catalyst OrthoScience, a Naples-based company, has developed a new device for shoulder replacement surgery.
According to the company, Goldberg’s first invention has now been used successfully in more than 3,000 surgeries.
The device, which can fit in the palm of a hand, is made of two components that mimic the natural ball and socket of the human shoulder.
The shape of the Catalyst implants better resemble the true shape of a human shoulder, unlike most other implants on the market, and are designed to give a more normal feel and movement to the patient, according to Goldberg.
Used with patented instruments and a new surgical approach, the implant requires less bone removal than other procedures for joint replacement.
Benefits include a reduction in the length of hospital stays, as well as less narcotic use for patients, according to Goldberg.
Catalyst reports that its first patients have shown “excellent results” — more than five years after surgery.
Catalyst OrthoScience adds new products
The company continues to add new products.
Catalyst has introduced 3D imaging software to help with preoperative planning for its products and in March received clearance from the U.S. Food and Drug Administration for a new reverse total shoulder system — a critical step toward final market approval.
With FDA clearance, Catalyst has begun a limited launch of the new system.
Industry analysts forecast that reverse surgery will be the fastest-growing segment of the shoulder arthroplasty market through 2025.
In this type of surgery, the ball and socket parts of the shoulder joint get switched, often to address a torn or malfunctioning rotator cuff, or severe arthritis.
With its growth, Catalyst has also done some rebranding. Its product portfolio now goes under the name Archer.
In the latest financing round, River Cities Capital, a healthcare-focused equity firm, and Mutual Capital Partners, a venture capital fund that invests in early-stage software and medical device companies, led the way.
The same companies led the last round of funding.
In a news release, Carter McNabb, managing director at River Cities and a member of Catalyst’s board of directors, said: “We are happy to support Catalyst’s significant momentum and advancing the efforts in shoulder arthroplasty.”
In 2019, Catalyst raised $12.7 million in its third round of funding, millions more than it sought.
Back then, Cartwright described it as a major milestone.
After reviewing the venture capital database Pitchbook, he said he couldn’t find a bigger investment in a Naples-based business.
Tamiami Angel Funds first invested in Catalyst in 2016. Its second fund put up $930,000, making it the lead investor in an initial $3.3 million capital raise needed to ramp up production of the company’s first breakthrough product.
A third fund made a follow-up investment of $500,000 in 2017.
The latest round from members of the second, third and fourth angel funds totaled $952,000.
“It was a big participation, as you can see all three funds participated in it,” Cartwright said in a phone interview. “We’re all that excited about it.”
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