A Medical Device Daily

Cardica (Redwood City, California) said it has completed its previously disclosed private placement of common stock and warrants to purchase common stock (Medical Device Daily, Sept. 29, 2009). Gross proceeds from the offering were about $10.2 million, which the company said it would use to fund development of its endoscopic microcutter and other general corporate and working capital purposes.

The company issued an aggregate of 8,142,082 newly-issued shares of common stock and warrants to purchase up to 4,071,046 additional shares of common stock. Cardica expects to receive net proceeds of about $10.1 million after deducting offering expenses.

The financing was led by existing investor, Sutter Hill Ventures, who was joined by other existing investors, Wasatch Advisors and Perkins Capital Management, in addition to new investors Prescott Group Capital Management and DAFNA Capital Management.

Cardica provides automated anastomosis systems for coronary artery bypass graft (CABG) surgery. Its C-Port Distal Anastomosis Systems are marketed in the U.S. and Europe and its PAS-Port Proximal Anastomosis System is marketed in the U.S., Europe and Japan. In addition, the company is developing the Cardica Microcutter, a true multi-fire endoscopic stapling device designed to be used in a variety of settings including bariatric, thoracic and general surgery.

In other financing activity:

• SyntheMed (Iselin, New Jersey), a biomaterials company engaged in the development and commercialization of anti-adhesion products and other surgical implants, said it has completed the initial closing of a private placement in which it received $1 million in gross proceeds.

The transaction involved the issuance to investors of five million units at 20 cents a unit. Each unit consists of one share of common stock and one four-year warrant entitling the holder to purchase one share of common stock at 20 cents a share. The transaction was placed through an agent with a consortium of European investors. The company is authorized to raise an additional $1 million in the private placement on the same terms. The proceeds will be used to fund operating expenses including marketing and regulatory costs in support of the Repel-CV Bioresorbable Adhesion Barrier franchise. Repel-CV is a bioresorbable adhesion barrier film designed to be placed over the surface of the heart at the conclusion of an open-heart surgical procedure to reduce the extent and severity of scar tissue that forms between the surface of the heart and opposing tissue surfaces following the surgical procedure.

• Hemagen Diagnostics (Columbia, Maryland) reported the completion of its exchange offer for $4,049,858.01 in principal amount of the outstanding 8% senior subordinated secured convertible notes due Sept. 30, 2009. Those tendering in the exchange offer received new 8% senior subordinated secured convertible notes due Sept. 30, 2014 having the same principal amount as the old notes tendered for exchange. The company said it has accepted all old notes tendered for exchange.

• TechniScan Medical Systems (TMS; Salt Lake City), a developer of ultrasound technology for breast imaging, reported the close of the final tranche of its Series E preferred financing of $1.1 million, bringing the total raised in the financing to just over $6 million.

TechniScan's imaging system, named Svara, after the Hindu goddess of sound, surrounds the breast in a warm bath of water, which allows ultrasound transducers to transmit sound waves into and through the breast, capturing 3-D images of the interior of the breast. The 3-D images potentially give the medical practitioner a clearer sense of the volume and shape of tumors or other abnormalities found in the breast, making it easier to identify structures that may show signs of malignancy, the company said.

Roughly half of the $6 million investment in Series E came from The Esaote Group, an international leader in medical imaging and diagnostic technologies. As a part of this investment, TMS and Esaote executed an original equipment manufacturing agreement, which has allowed TMS to incorporate Esaote's products and technologies in the products developed by TMS, while the TMS technology will be used in future Esaote ultrasound systems. Furthermore, the companies have executed an exclusive distribution agreement for the European market and a commercial cooperation for the American market.

TMS says it has raised more than $24 million in equity financing and $5 million in federal grant funding from the National Institutes of Health and the National Cancer Institute, bringing the total raised to about $30 million.

• Molecular Detection (MDI; Wayne, Pennsylvania), a company developing Detect-Ready assays designed to increase the speed and accuracy of infectious disease diagnosis, reported the completion of a $3.3 million Series C financing. The company says it is preparing to launch its first product, the Detect-Ready assay for the rapid detection of methicillin-resistant Staphylococcus aureus. The company also reported that Todd Wallach has been named CEO.

The Series C financing included both existing and new investors and was more than 300% oversubscribed. It was led by MentorTech Ventures II, and included new investors Ben Franklin Technology Partners of Southeastern Pennsylvania, Robin Hood Ventures and the Mid-Atlantic Angel Group Fund I and II. Private investors and founders, the SVM-Israel Opportunity Fund II and the Chief Scientist Office of the Israeli Ministry of Industry and Trade, have previously funded MDI.

• Imricor Medical Systems (Burnsville, Minnesota), the developer of a system for performing cardiac ablations, said it hopes to raise more than $2.5 million, according to a filing with the Securities and Exchange Commission.

Imricor says it has designed an MRI ablation system that would eliminate X-ray radiation for patients and physicians. The product prototypes are complete and the company is preparing to enter the U.S. regulatory approval process.

The company is raising money through equity and warrants, according to the SEC filing. The funds will be used for working capital and general business purposes.