PolarityTE Raises $22.5M for Phase III SkinTE Study on Diabetic Foot Ulcers

On May 20, 2024, PolarityTE, a clinical-stage biotechnology company focused on regenerative tissue products, announced a significant financial milestone. The company has secured $12.5 million in equity financing from both institutional investors and existing shareholders. In addition to this equity financing, PolarityTE has finalized a senior secured credit facility with the Avenue Venture Opportunities Fund, L.P., part of Avenue Capital Group. This new credit agreement offers up to $10 million in total term loan capital, with an initial $5 million tranche funded at closing. The funds will be directed towards progressing SkinTE’s Phase III Pivotal Study, which aims to evaluate SkinTE in treating Wagner 1 Diabetic Foot Ulcers (COVER DFUS II).

John Stetson, CEO of PolarityTE, expressed enthusiasm about the financing and partnership with Avenue Capital, a reputable institutional investor. He emphasized that this financial support solidifies the company's balance sheet and ensures adequate capital to achieve key data readouts for their ongoing trial.

The COVER DFUS II study plans to enroll up to 120 subjects across approximately 20 clinical sites in the United States. Participants will be randomly assigned to one of two treatment groups: one receiving SkinTE in addition to the standard of care (SOC), and the other receiving only the SOC. The primary endpoint of the study is the incidence of DFUs closed at 12 weeks. To date, around 20% of the target population has been enrolled, keeping the company on track to meet its anticipated enrollment goals and an interim readout expected in the first quarter of 2025.

PolarityTE is headquartered in Salt Lake City, Utah, and specializes in developing regenerative tissue products. The company’s flagship product, SkinTE, is a regenerative tissue product currently available for investigational use only. PolarityTE has an active investigational new drug application (IND) for SkinTE with the U.S. Food and Drug Administration (FDA). They are currently pursuing the first of two pivotal studies required to support a biologics license application (BLA) for a chronic cutaneous ulcer indication.

The Avenue Venture Debt Fund aims to provide innovative financing solutions to high-growth, venture capital-backed technology and life science companies. Avenue Venture Debt Opportunities Fund primarily targets companies in the underserved market segment created by the expanding financing gap between commercial banks and larger debt funds. This fund is a part of Avenue Capital Group, a global investment firm managing approximately $12 billion in assets.