Orthocon, a medical device firm that focuses on implants, has the distinction of acquiring the largest amount of venture capital in the Greater New York Area so far this year. The four-year-old firm received $25 million in the second quarter of this year. Founded by Arthur Alfaro and Richard Kronenthal, Orthocon outgrew its incubator space at the New Jersey Technology Center and moved in July to an NJIT space in Newark. It has 15 employees.
Considered to be a “late stage” company, Orthocon is working on implantable devices that deliver therapeutics to bone based on synthetic absorbable technology. It hopes to change the way patients are medicated for post-operative pain (U.S. 1, October 26, 2005). Its lead product is designed to both stop bleeding and provide local pain relief.
For seed money for Orthocon, Alfaro and Kronenthal used royalty profits from a previous company they had founded, Eatontown-based Osteotech. Kronenthal opened a laboratory at the Technology Center of New Jersey in 2005. Although Alfaro still owns stock, he is no longer associated with Orthocon’s management. He is now CEO of Orthobond, which has moved into Orthocon’s 2,000-square-foot space at the Technology Center of New Jersey (see accompanying story)
Kronenthal remains with Orthocon, and Paul R. Sohmer joined Orthocon as president and CEO in April. Sohmer, who went to Northwestern University and Chicago Medical School, has been a practicing physician and has had leadership positions in a clinical laboratory, a genetic services firm, and a laboratory supply company. Most recently he was CEO of TriPath Imaging, a North Carolina-based cancer diagnostics company that was bought by BD (Becton Dickinson and Company) in 2006.
According to John Pacifico, vice president of corporate development, the $25 million will be used for clinical trials, slated to start this year, and for pipeline development. It was co-led by ProQuest Investments and Canaan Partners, plus the existing stockholder, BB Biotech Ventures.
Orthobond’s gain stood out against a gloomy investing picture, according to the National Venture Capital Association. In the New York region second quarter venture capital funding dropped nearly 30 percent compared to last year. Nationally it dropped 50 percent.
Orthocon, Enterprise Development Center, 211 Warren Street, Newark 07103. 973-424-0007; fax, 973-424-0033. www.orthocon.com