A Medical Device Daily

Theragenics (Buford, Georgia), a device company serving the surgical products and prostate cancer treatment markets, reported entering into a new unsecured credit agreement with Wachovia Bank, National Association. Wachovia is a Wells Fargo company.

The new credit agreement consists of a $30 million revolving credit facility and a $10 million term loan. Maximum borrowings under the revolving credit facility can be increased to $40 million under an accordion feature. This new credit agreement replaces and refinances the $40 million revolving credit facility with Wachovia that was set to expire in October 2009. Borrowings of $32 million were outstanding under the old credit facility. The financial covenants in the new credit agreement are substantially similar to the previous credit agreement, except that the requirement to maintain at least $20 million in liquid assets has been reduced to $10 million.

"Obtaining our new credit agreement is a significant accomplishment," said M. Christine Jacobs, chairman/CEO of Theragenics. "The credit markets continue to be difficult to navigate for all companies. We believe that our ability to obtain this new credit agreement is a testament to our strategy, our focus on quality cash flows and the strength of our balance sheet. With our new credit agreement in place, we can continue to focus on organic growth and building momentum towards 2010 in the short term, and continue our long-term strategy of diversification."

The $30 million revolving line of credit matures on Oct. 31, 2012, with interest payable at LIBOR plus 2.25%. Subject to the approval of the bank, the maximum available borrowings under the revolving line of credit can be increased to $40 million under an accordion feature. The $10 million term loan requires equal monthly principal payments plus interest at LIBOR plus 1.75% over three years, beginning July 1, 2009. The company also entered into interest rate swaps to hedge the interest rate on the entire amount of the term loan and a portion of the revolving credit facility. The credit agreement is unsecured, but provides for a lien to be established on substantially all assets of the company if certain events of default occur. Provisions of the new credit facility require the company to maintain a minimum cash and investment balance, as defined in the agreement, of $10 million. The terms also require the maintenance of certain minimum financial covenants, including a minimum fixed charge coverage ratio and a maximum debt to tangible net worth.

Theragenics operates two business segments: its surgical products business and its brachytherapy seed business. Its surgical products business makes wound closure, vascular access, and specialty needle products. Its brachytherapy business manufactures its premier product, the palladium-103 TheraSeed device and I-Seed, an iodine-125 based device, which are used primarily in the minimally invasive treatment of localized prostate cancer.

In other financing activity:

• The Ben Franklin Technology Partners of Northeastern Pennsylvania's (BFTP/NEP; Bethlehem, Pennsylvania) board of directors has approved the investment of $567,245 in support of regional economic development. BFTP/NEP is a state-funded economic development organization that links early-stage technology companies and established manufacturers with experts, universities, funding, and other resources to help them prosper through innovation.

BFTP/NEP plans to invest $42,941 in InfraRed Imaging Systems (Bethlehem), maker of the FDA-cleared VascularViewer, an imaging device designed to allow clinicians to better visualize veins and arteries in the human body in accurate detail, in real-time, and non-invasively; According to the company, the device is intended to enable clinicians to "more painlessly and efficiently" insert needles and catheters. It is now being placed in hospitals, the company noted.

BFTP/NEP also plans to invest $30,000 in Third Eye Diagnostics (Bethlehem) to conduct prototype development and clinical studies for its Cerepress non-invasive intracranial pressure (ICP) monitor. According to Third Eye, the monitor gathers pressure measurements externally from the eye of patients with a head injury or who have suffered a stroke. Existing standard-of-care devices that monitor ICP are invasive and require drilling a hole through the patient's skull to measure pressure, which can expose patients to significant complications and poses a significant and preventable cost to the healthcare system, Third Eye noted.

Ben Franklin also plans to invest $32,494 in Puritan Products's (Bethlehem) university partner, Lehigh University, to assist Puritan in attaining "Current Good Manufacturing Practices" compliance from the FDA. This will allow the company to expand in the pharmaceutical and biotechnology markets. Puritan custom formulates chemicals to customer specifications.

• gloStream (Bloomfield Hills, Michigan), a healthcare software company that develops and sells certified, Microsoft Office embedded electronic medical record (EMR) and practice management solutions, said it has closed on a $7.5 million Series B financing round co-led by Beringea and members of gloStream's executive management team. Capital will be used to bolster virtually all areas of gloStream including development, marketing and sales, and deployed immediately as the company looks to hire for nearly all-internal teams, gloStream said.

The financing round comes after passage of the American Recovery & Reinvestment Act (AARA), which was signed into law by President Obama in February. The ARRA allocates $20 billion toward healthcare IT, including up to $64,000 per doctor – through the Centers for Medicare and Medicaid Services – for implementing EMR technology.