A Medical Device Daily

Aradigm (Hayward, California) said that it has entered into a definitive agreement with an investor to sell 4 million shares of its common stock for gross proceeds of $400,000, before deducting placement agent fees and estimated offering expenses, in a registered direct offering.

This offering is in addition to the offering Aradigm reported on Feb. 23, relating to the sale of roughly 41 million shares of common stock for gross proceeds of some $4.1 million. The investor has agreed to purchase the shares of common stock at a negotiated purchase price of $0.10 per share.

The shares of common stock are being offered by Aradigm pursuant to a previously filed registration statement, which was declared effective by the Securities and Exchange Commission on Jan. 25, 2008. The transaction is expected to close on or about Feb. 26, 2009, subject to customary closing conditions.

Piper Jaffray served as sole lead placement agent for the offering and Ladenburg Thalmann served as co-placement agent for the offering. Reedland Capital Partners, an institutional division of Financial West Group, served as financial advisor to Aradigm.

Aradigm is focused on the development and commercialization of drugs delivered by inhalation for the treatment of severe respiratory diseases by pulmonologists. Current activities include partnered and self-initiated development programs addressing the treatment of cystic fibrosis, bronchiectasis, pulmonary hypertension and COPD, inhalation anthrax infections and smoking cessation.

In other financing news:

• NotifyMD (Franklin, Tennessee) secured $6.5 million in bank financing and reported a tender offer, through which it will offer to repurchase all of its outstanding shares, other than those held by its two lead institutional investors and its management team.

David Swenson, managing partner at Coleman Swenson (also Franklin) and NotifyMD's chairman, said, "The tender offer announced today creates a market for those shareholders who wish to liquefy their position in NotifyMD and allows those shareholders to do so at what the Board of Directors believes to be a fair price."

NotifyMD provides call management services to physician group practices, hospitals and integrated health systems.

• Clinical Data (Newton, Massachusetts) reported that it has completed a $50 million convertible debt financing with New River Management and another affiliate of Randal Kirk, chairman of Clinical Data's board of directors.

The primary use of the capital will be to advance the company's two late-stage therapeutic programs through key milestone events anticipated this year including the completion of its second Phase III registration trial and planned new drug application filing for vilazodone, a first-in-class drug candidate for the treatment of depression. The funds will also be used for the initiation of its Phase III clinical program for Stedivaze, a potential best-in-class cardiac stress agent.

The transaction consists of unregistered convertible notes payable eight years from the date of issuance, bearing interest at a rate of 9.72% annually. The company may not prepay the notes for the first two years from the date of issuance without prior approval from the investors. The outstanding principal balance of the notes may be converted into 6,110,600 shares of Clinical Data common stock at the option of the investors, at any time, at a price equal to the closing market price on Feb. 25 of $8.12 plus $0.0625 per share.

• LifePoint Hospitals (Brentwood, Tennessee) reported that its board of directors has amended and restated the rights agreement by and between the company and American Stock Transfer & Trust as rights agent, which was adopted on April 15, 2005. Among other changes, the Feb. 25 agreement extends the current term to Feb. 25, 2019, adjusts the exercise price of the rights and amends the definition of beneficial owner and beneficially own to clarify that a person will be deemed to beneficially own any securities that are the subject of specified derivative transactions.

As a result of the amended agreement, each preferred stock purchase right entitles the holder, if and when the rights become exercisable, to buy one one-thousandth of a share of the company's Series A junior participating preferred stock for $125. Initially, the rights will be represented by the company's common stock certificates and will not be exercisable.

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