Carisma Therapeutics Inc. (Nasdaq: CARM) and OrthoCellix, Inc., a wholly-owned subsidiary of Ocugen, Inc. (Nasdaq: OCGN), have announced a definitive merger agreement that will create a publicly-traded company focused on regenerative cell therapies for orthopedic diseases. The all-stock transaction positions the combined entity to advance NeoCart®, a first-in-class autologous cartilage implant technology, into Phase 3 clinical trials.
NeoCart® Technology Platform
OrthoCellix is developing NeoCart® as an innovative approach to treating knee articular cartilage defects using patient-derived cells. The technology platform combines a fortified 3D scaffold with patented bioprocessing technology to cultivate chondrocytes—the cells responsible for maintaining cartilage health—to produce adolescent-like cartilage at the time of implant.
"We believe NeoCart® has tremendous potential to deliver a truly transformative approach to cartilage repair, and we've established OrthoCellix with dedicated resources to bring this revolutionary technology to the patients who desperately need it," said Dr. Shankar Musunuri, Chairman, Chief Executive Officer, and Co-founder of Ocugen.
The therapy is designed to accelerate healing and reduce pain by creating a functional joint surface that helps patients return to normal activities while preventing complications associated with articular cartilage damage. NeoCart® has received Regenerative Medicine Advanced Therapy (RMAT) designation from the FDA and has obtained concurrence on a single, confirmatory Phase 3 clinical trial to enable submission of a Biologics License Application.
Clinical Development Timeline
OrthoCellix anticipates launching its Phase 3 clinical trial by the end of 2025. The FDA-endorsed Phase 3 study represents a critical milestone for the technology, which has already demonstrated its potential through earlier clinical development phases.
Transaction Structure and Financing
Under the merger agreement terms, OrthoCellix will merge with and into a wholly-owned subsidiary of Carisma, with OrthoCellix continuing as a wholly-owned subsidiary of the surviving company. The transaction includes a concurrent $25.0 million private financing with Ocugen and other select investors, designed to enable the combined company to complete the Phase 3 trial of NeoCart® without additional cost or investment from Ocugen.
Upon closing, OrthoCellix's stockholder and other participants in the concurrent financing are expected to own approximately 90% of the combined company, while existing Carisma stockholders will own approximately 10% on a fully diluted basis. The combined company will be renamed "OrthoCellix, Inc." and trade on the Nasdaq Capital Market under the ticker symbol 'OCLX.'
"Carisma evaluated a range of strategic alternatives, and we believe this proposed transaction represents an opportunity to deliver significant value to our stockholders," said Steven Kelly, President and Chief Executive Officer of Carisma. "OrthoCellix is strongly positioned with its NeoCart® platform, a dedication to developing regenerative cell therapies, and a well-credentialed management team to lead the combined company."
Manufacturing and Development Infrastructure
OrthoCellix will utilize the Good Manufacturing Practice facility established by Ocugen to support the initial development of NeoCart®. The company has developed a pipeline of additional treatments based on its proprietary scaffold bioreactor and adhesive technologies, positioning it as a comprehensive regenerative cell therapy platform focused on cartilage defects and other orthopedic diseases.
Regulatory Approvals and Timeline
The transaction has received unanimous approval from the board of directors of both companies and is expected to close in the second half of 2025, subject to customary closing conditions. These include approvals by stockholders of each company and the effectiveness of a registration statement to be filed with the Securities and Exchange Commission.
Directors and officers of both Carisma and OrthoCellix's stockholder have executed support agreements, committing to vote their shares in favor of the merger or the issuance of Carisma equity in the merger, as applicable.
The merger represents a strategic consolidation in the regenerative medicine space, combining Carisma's public market presence with OrthoCellix's advanced cartilage repair technology to address what the companies describe as considerable unmet medical needs in orthopedic diseases.
