Orthovita completes $10 million financing

Orthovita, a US-based firm that develops orthopedic biomaterials, hascompleted a $10 million financing with Paul Capital Royalty Acquisition Fund, giving the latter a 13% stake in the group. As part of the agreement, Orthovita sold Paul Capital a royalty interest for $5 million and raised the remainder through the sale of almost 2.6 million shares of its common stock.

Specifically, Paul Capital will receive a royalty of 3.5% on the first $100 million of sales, plus 1.75% of turnover in excess of $100 million, of Orthovita's Vitoss, Cortoss and Rhakoss products in North America and Europe, through 2016. The company will use the proceeds realized from the financing for clinical development, marketing programs and working capital relating to the products.

Joseph Paiva, Orthovita's chief financial officer, said the deal was structured "to minimize the issuance of our stock at today's price," which is currently lying at around the $2 mark.