Editor’s note: This article was updated on April 30 to replace information about the osteoporosis market with information on the osteoarthritis market.

Cytonics is a biotech company that is focused on developing diagnostics and therapeutics for osteoarthritis. The company is also raising money through a crowdfunding campaign on SeedInvest. The minimum investment amount is $1,000.

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The founder and chairman of the board is Gaetano Scuderi, who is a medical doctor. He has practiced as a spine surgeon since 1993 and has served as clinical assistant professor in the Department of Orthopedic Surgery of Stanford University. He has published over 45 scientific papers and has lectured across the world.

The CEO and CFO of Cytonics is Antonio Carvalho. Before this, he was a vice president of finance for the global oncology business at Novartis (NYSE:NVS). He oversaw the financial management of 20 product launches during a five-year period.

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Cytonics also has an impressive advisory. The members include professors, medical doctors and business leaders such as David Yeomans, associate professor of anesthesiology, perioperative and pain medicine at Stanford, neurosurgery expert Wayne Olan and orthopedic surgeon Thomas San Giovanni.

Background on Cytonics

The inspiration for Scuderi to create Cytonics was his belief that the source of joint pain was due to some compound that is formed when cartilage degrades because of arthritis. To test this hypothesis, he examined joint fluid from colleagues, employees and family members to identify biomarkers. With this, he published a paper in 2006 that garnered considerable of attention.

This work would become the basis of Cytonics’ main treatments and diagnostics: APIC, CYT-108 and Fibronectin-Aggrecan Complex Test (FACT), which are backed by a portfolio of eight issued patents and nine that are pending. Let’s take a look:

APIC: This is based upon alpha-2-macroglobulin (A2M), which is a naturally occurring molecule in the body. It is located in the joints and blood – helping to deal with breakdowns in cartilage. The problem is that there are low amounts in the joints. So with APIC, it is possible to improve the levels via an injection. The impact is often within hours or days and can last up to one year or so. There are only one or two injections required.

So far, APIC has been used on more than 7,000 patients.

CYT-108: This is the next-generation treatment based on A2M. The innovation is the creation of a new region within the protein that allows for a more potent result. Currently, CYT-108 is in preclinical trials.

FACT: This is a system that detects the Fibronectin-Aggrecan Complex in joint fluid. If there is a positive result, then the patient would likely benefit from an APIC treatment. Note that Cytonics has licensed FACT to Synthes, which is a Johnson & Johnson (NYSE:JNJ) company.

No doubt, the market opportunity for these offerings is sizeable. ReportLinker suggests that “The global osteoarthritis therapeutics market is projected to reach USD 11.0 billion by 2025 from USD 7.3 billion in 2020.” Osteoarthritis in the knee is expected to make up the lion’s share of that market.

Bottom Line

Cytonics has already raised $15 million and $4 million came from Synthes. Regarding the crowdfunding offering, it is for a Series C round. The company has set the valuation at $46.7 million and the equity is preferred stock, which has a 1x liquidation preference. This means that if there is a sale or bankruptcy, the investors will get first dibs on the available proceeds up to the initial investment.

Now there are certainly notable risks with Cytonics. The FDA approval process is expensive and time-consuming. So there will likely need to be further rounds of capital.

Next, the market for treatments is highly competitive. Some of the players include Eli Lilly (NYSE:LLY), Amgen (NASDAQ:AMGN) and AstraZeneca (NYSE:AZN).

Granted, it is encouraging that Cytonics has been able to commercialize its treatments. This is no easy feat, especially for a relatively small company. But Cytonics is still in the early stages (with sales last year at $365,169) and it will probably take time for it to get critical mass.

On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Tom Taulli (@ttaulli) is an advisor/board member for startups and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.