A Medical Device Daily
Accumetrics (San Diego), developer of the VerifyNow System designed for measuring an individual's response to multiple antiplatelet agents, reported that it has completed a round of financing that will raise $16.5 million in new capital.
Accumetrics' VerifyNow System helps physicians assess their patients' response to life-saving antiplatelet therapies, such as aspirin, Plavix, Effient and GP IIb/IIIa inhibitors. Patients respond to antiplatelet medications differently; patients with impaired response may be at significantly greater risk for death, heart attack or stroke. The VerifyNow System helps physicians rapidly determine an individual patient's response to his or her therapy, without the usual time lag for laboratory analysis. Doctors use this information to ensure their patients are receiving the optimal treatment.
The capital will be funded in two closing transactions, with the first in 2009 and the second in 2010. Accumetrics reported that these proceeds will fund the completion of a number of key milestones planned for 2010 including expanded claims for existing products, new product development and continued expansion of its commercialization efforts both internationally and within the U.S.
The capital infusion, which will fully finance the company into 2011, came from the company's existing investors, including Arnerich Massena, BBT Fund/Apothecary Capital, Essex Woodlands Health Ventures, Kaiser Permanente Ventures and RiverVest Venture Partners.
In other financing news:
• ReGen Biologics (Hackensack, New Jersey) reported that it has entered into a bridge financing agreement for up to $3 million aggregate principal amount of secured convertible notes and closed on the first tranche of the agreement with one of its principal investors. In the first closing under the bridge financing, the company received $250,000 in immediately available funds and initial commitments for $1.5 million to be provided to the company in increments to be established with the investors.
In order to reduce its cash requirements, the company has initiated various personnel and other expense reductions and implemented a temporary employee furlough program for U.S. based employees. These initiatives are expected to have a significant impact on the company's ability to conduct certain aspects of its operations. The company said it is currently working on a restructuring plan and will provide further updates regarding its plans and liquidity position as they become available.
"A protracted FDA review and recent report by the FDA indicating that a re-review of the clearance of the Menaflex device was going to be undertaken, has severely reduced our financing options," explained Gerald Bisbee, Jr., PhD, chairman/CEO. "This is unfortunate because it appears from the report that the FDA came to that conclusion due, not to any scientific issues, but to a number of internal FDA departures from processes, procedures and practices; including as stated in the report, '... the presence of widespread internal disagreement and confusion about the legal standard for 510(k) review ... ,' and an admission from the FDA's Office of Chief Counsel that certain aspects of the Menaflex review, ... 'supported ReGen's long standing argument that the Center was holding the CS device to the wrong review standard.'" Bisbee concluded, "The science and resulting publications solidly support the safety and clinical benefit associated with the use of the Menaflex device."
The company said that several ongoing events are believed to have contributed to the company's current situation, including: conflict at the FDA between management and a group of "whistleblowers" that began well before clearance of the Menaflex device; pressure from certain members of Congress to investigate the whistleblowers' accusations regarding the FDA's Device Center; and long-standing congressional interest in changing the 510(k) program.
The bridge financing provides for the issuance of up to $3 million aggregate principal amount of notes due April 2, 2010, accruing interest at 8% until the due date and 12% thereafter until paid, and secured by a lien on the Company's assets. In connection with the bridge financing, the company also issued five year warrants to purchase common stock. The notes and warrants are convertible upon the consummation of a future private placement or at the due date at the prices and upon the terms set forth in the agreement of the bridge financing, which the company intends to file with the SEC.
ReGen is an orthopedic products company that develops tissue growth and repair products for U.S. and global markets. ReGen's Menaflex collagen meniscus implant employs proprietary biological collagen scaffold technology to facilitate tissue growth, thereby reinforcing and repairing the damaged meniscus of the knee. The FDA cleared the Menaflex device to be marketed in the U.S. in 2008 (Medical Device Daily, Nov. 18, 2008).
• ALung Technologies (Pittsburgh) reported that it has raised $2.5 million from a group of current ALung investors. The investment will allow the company to fund its Indian and German clinical trials as well as support working capital needs.
ALung is developing a device designed to replace or supplement ventilators in hospitals. The company's Hemolung device is expected to positively impact clinical outcomes and reduce the length of hospital stays by several days, resulting in a significant reduction of total medical costs for providers and insurers.
The Hemolung system is designed to remove carbon dioxide and deliver oxygen directly to the patient's blood via a small catheter, inserted into the jugular or femoral vein, similar to acute kidney dialysis. This treatment is expected to provide a significant benefit over intubation and mechanical ventilation, in that it will allow the patient to talk and eat, and avoid sedation, while giving the lungs the opportunity to heal.
"ALung has the potential to improve care greatly for the target patient group over the current methods used in intensive care units, achieving both improvements in clinical outcomes and major savings in cost of care," said Peter DeComo, ALung's chairman/CEO and an investor in the company.