A Medical Device Daily
At a time when medical device companies are struggling to keep afloat it is refreshing to see there are still some companies out there that have managed to bring in some significant cash.
Small Bone Innovations (SBi; New York), an orthopedics company focused on technologies and treatments for the small bones and joints, says it has sold a total of $108 million of Series D preferred stock in a series of private equity financings. The most recent of these financings closed on April 2009. According to SBi, the Series D financings is believed to be one of the largest private equity capital investments in an orthopedics company.
"In view of the extremely difficult conditions in the global capital markets during the past 18 months, the scope and quality of this investment round represent both a vote of confidence in our business model and a recognition of the small bone and joint market as the fastest growing sector in the orthopedics market," said Anthony Viscogliosi, SBi's CEO/chairman. "The size of the investment in SBi is significant in view of the 51% decline this year in medical device investing by venture capital firms according to VentureSource (a DowJones database)."
The Series D funding included substantial investments from Goldman, Sachs & Co., Khazanah Nasional Berhad, the investment firm of the Government of Malaysia, Malaysian Technology Development Corporation, an integrated Malaysian-based venture capital company, The Family Office of Bahrain, and certain other substantial investors, SBi said.
The Series D financing also included investments from existing investors Trevi Health Ventures, NGN Capital, 3i Group, and TGap Ventures.
In addition to the Series D financing round, SBi completed in 2008 its Series C Preferred Stock financing, raising a total of $36 million. This financing was led by Viscogliosi Bros., and included new investor Trevi Health Ventures, and follow-on investments by NGN Capital, 3i, TGap Ventures and Axiom Venture Partners.
The proceeds from the Series C and Series D financings were used in part to complete the acquisition of the Scandinavian Total Ankle Replacement (S.T.A.R.) system from Waldemar Link (Hamburg, Germany), to fund operations, to support the launch of the S.T.A.R. Ankle in the U.S. and to retire a $20 million credit facility, arranged in 2007 by Fortress Investment Group.
In other financing activity:
• Lumenis (Yokneam, Israel), a developer of laser, light-based and radio-frequency devices for surgical, aesthetic and ophthalmic applications, said it has completed an equity financing in which a new investor, Agate Medical Investments, together with two existing significant shareholders LM Partners and Ofer Hi-Tech Group, have invested $15 million in the company.
In addition, the company said it completed a restructuring of its bank debt allowing for a convenient loan repayment plan spread over 8 years until 2017.
"We are delighted that we were able to raise new capital despite the current, challenging global economic environment," said Lumenis CEO Dov Ofer. "This will enable freeing of Lumenis' cash resources for expanding its business, and improving the company's overall balance sheet."
Lumenis says it invests heavily in R&D and has more than 250 patents worldwide, more than 75 FDA clearances, worldwide presence in more than 100 countries, and an installed base of over 70,000 systems.
• NMT Medical (Boston), a company that makes implant technologies designed to allow interventional cardiologists to treat structural heart disease through minimally invasive, catheter-based procedures, reported entering into a $4 million, two-year credit facility with Silicon Valley Bank, a unit of SCB Financial Group (Santa Clara, California).
• Medidata Solutions (New York), a provider of hosted clinical development solutions, said that the underwriters of its initial public offering exercised in full their over-allotment option to purchase an additional 945,000 shares of Medidata's common stock at a public offering price of $14 a share, less underwriting discounts and commissions, from certain selling stockholders. The option was granted in connection with Medidata's IPO of 6.3 million shares of its common stock, which priced on June 24 (Medical Device Daily, June 26, 2009). The closing of the sale of all of the 7,245,000 shares by Medidata and the selling stockholders to the underwriters occurred last week.
Citi and Credit Suisse Securities acted as joint bookrunning managers for the proposed offering. Jefferies & Company, and Needham & Company, acted as co-managers.
• eCardio Diagnostics (The Woodlands, Texas) said it has received a significant minority investment from Sequoia Capital. This is eCardio's first round of institutional funding since the company was founded in 2004.
"The investment by Sequoia Capital marks a milestone in the growth of eCardio," said President/CEO Larry Lawson. "This partnership will strengthen our technology offering and accelerate our ability to develop fast, flexible and accurate solutions for remote cardiac monitoring."
The investment from Sequoia Capital comes after several years of profitable growth and industry recognition for eCardio, according to the company.
eCardio provides comprehensive and advanced technologies, devices, services and solutions for the diagnosis, monitoring and subsequent clinical management of cardiac arrhythmias, predominantly in an ambulatory setting.
• Neuralstem (Rockville, Maryland) said that Vicis Capital Master Fund has purchased 800,000 shares of Neuralstem common stock at $1.25 a share, reflecting an approximate 20% premium to the closing price of the stock on June 29. The company also issued to Vicis warrants to purchase 2.4 million shares of Neuralstem common stock at $1.25 a share, a third of which must be exercised within a year from the date of issuance, a third within three years, and the final third within five years from the date of issuance. Neuralstem plans to use these proceeds for working capital.
Midtown Partners & Co. served as exclusive placement agent for the offering.
Neuralstem says its technology enables, for the first time, the ability to produce neural stem cells of the human brain and spinal cord in commercial quantities, and the ability to control the differentiation of these cells into mature, physiologically relevant human neurons and glia.