Osteal Therapeutics Secures $50M Series D Funding for Lead Candidate Launch

Osteal Therapeutics, Inc., a clinical-stage biopharmaceutical company specializing in advanced combination drug/device therapies for orthopedic infections, has successfully closed a $50 million Series D equity financing round. This round was led by Zimmer Biomet, with participation from returning investors Johnson & Johnson Innovation – JJDC, Inc., Gideon Strategic Partners, and HM Capital. As part of this financing, Zimmer Biomet will also have a representative join Osteal's Board of Directors.

The funds will primarily be used to support the development of Osteal's treatment portfolio, particularly for the submission of a New Drug Application (NDA) and the commercial launch of VT-X7. VT-X7 is a novel seven-day treatment designed for periprosthetic joint infection (PJI) in the hip and knee. The treatment has been evaluated in two multicenter, randomized, controlled clinical trials, APEX and APEX-2, with APEX-2 recently meeting its primary endpoint and slated for completion by late 2024. These studies, conducted in consultation with the FDA, have already demonstrated safety and efficacy, leading to VT-X7 receiving designations such as Breakthrough Therapy, Orphan Drug, Fast Track, and Qualified Infectious Disease Product. The company aims to seek FDA approval following the completion of APEX-2.

David Thompson, Chairman and CEO of Osteal Therapeutics, expressed that the latest round of financing marks a pivotal moment for the company as it moves closer to introducing VT-X7 to the market. He acknowledged the invaluable support from their financial and strategic partners, particularly highlighting the new partnership with Zimmer Biomet.

PJI is a rare but severe complication of joint replacement surgeries, affecting over 40,000 individuals annually in the United States. This condition involves bacterial colonization on the joint prosthesis, leading to the formation of biofilms which are notoriously difficult to eradicate. Current treatments are extensive, invasive, and often unsuccessful, resulting in high rates of permanent disability and mortality. The most common treatment, two-stage exchange arthroplasty, has a success rate of less than 50% after one year and typically requires 16 weeks, emphasizing the urgent need for more effective solutions.

VT-X7 combines vancomycin hydrochloride and tobramycin sulfate, well-known broad-spectrum antibiotics, delivered directly to the joint area through a specialized irrigation system. This innovative approach ensures therapeutic concentrations of the antibiotics reach the infected area, promoting rapid and effective treatment while minimizing adverse effects. In clinical trials, all patients treated with VT-X7 received a new permanent joint prosthesis within seven days, with over 90% remaining free of infection after one year.

Osteal Therapeutics leverages a low-risk development strategy by utilizing approved drugs with established safety profiles for new delivery methods. This approach minimizes off-target effects and maximizes therapeutic efficacy. The company’s lead candidate, VT-X7, aims to address the significant unmet medical need in treating PJI, representing a potential multibillion-dollar market opportunity.

Osteal Therapeutics remains privately held and dedicated to developing novel musculoskeletal therapeutics to treat orthopedic infections. By focusing on localized, concentrated antimicrobial treatments, the company seeks to improve outcomes for patients suffering from these challenging conditions.