A Medical Device Daily
NeoMatrix (Irvine, California) reported that it has completed its C2 funding round totaling $15 million.
That figure is, due to overwhelming investor demand, 50% more than the company's initial target of $10 million in new funding, NeoMatrix said.
In addition, NeoMatrix reported a current oversubscription of the C2 round totaling $1.2 million. In order to accommodate those investors who are part of this $1.2 million oversubscription as well as those investors who indicated interest but were unable to participate the company is initiating a small C3 round that will total $2 million to $3 million, under the exact terms and conditions as the C2 round.
The funding will be used to support further commercialization of the company's technology for its Halo Breast Pap Test.
"The success of our efforts is notable in what is obviously a very difficult financial climate," said John Stroh, NeoMatrix's CEO. "Clearly, our investors have recognized the exceptional investment opportunity of NeoMatrix and its Halo technology. Oversubscribing our offering confirms that opportunity and the strength of our Halo technology. "
"Our story resonates with investors on several levels," Stroh added. "The potential to save lives through our Halo Breast Pap Test is obviously compelling. Beyond that, investing in NeoMatrix provides investors the opportunity to diversify their portfolio with an asset that is less volatile and non-correlative to the public financial markets."
He noted that investors understand NeoMatrix has significantly reduced typical risks, in that the company has: cleared FDA regulatory hurdles; built strong intellectual property protecting its technology; completed product development; and placed a substantial number of units at healthcare facilities around the U.S. during the product's launch phase.
Halo is a 5-minute, noninvasive test that helps physicians and their patients determine an individual woman's risk of getting breast cancer.
The test is performed with a proprietary device for collecting nipple aspirate fluid (NAF). The device delivers a combination of warmth, massage, and suction much like a breast pump to collect NAF. The fluid is then examined to identify women with abnormal cells (or atypia) in their NAF, who are at high risk of developing breast cancer. These women can then be guided toward lifestyle changes, increased monitoring, or medical interventions aimed at preventing the disease, or detecting it at its earliest, most treatable stage, NeoMatrix said.
The company noted that women with atypia have a four-to-five times greater risk of developing breast cancer, making NAF a valuable biomarker. Well-tolerated by patients and easy to use, the device is the first means of collecting NAF to be practical for general care, according to NeoMatrix.
In other financing activity, Northfield Laboratories (Evanston, Illinois) said it has obtained a commitment to purchase shares of convertible preferred stock pursuant to a registered direct offering to a single institutional investor, representing gross proceeds of about $1.4 million. The preferred stock is convertible into shares of Northfield's common stock at the option of the investor at a price of $0.265 a share.
The investor also will receive warrants to purchase 5,404,652 shares of Northfield's common stock. The warrants have an exercise price of $0.53 a share and are exercisable at any time after the six-month anniversary of the closing of the transaction and before the fourth anniversary of such initial exercise date.
The offering is expected to close by Wednesday, subject to the satisfaction of customary closing conditions.
Northfield said it plans to use the net proceeds from the offering for general corporate purposes, including general and administrative expenses and expenses in connection with the regulatory review of Northfield's PolyHeme investigative human hemoglobin-based red cell substitute product.
The shares and warrants are being offered by Northfield pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission dated Sept. 1, 2006. Rodman & Renshaw acted as the exclusive placement agent for the transaction.