A Diagnostics & Imaging Week
Aspect Medical Systems (Norwood, Massachusetts) reported it has repurchased, in privately negotiated transactions, an aggregate of $35 million face value of its 2.5% convertible senior notes due 2014, for aggregate consideration of roughly $16 million in cash, including accrued interest. In June 2007, Aspect issued $125 million of its 2.5% notes. As a result of these and prior repurchases, $65 million of the 2.5% notes remain outstanding, Aspect said.
"The repurchase of our notes enables us to continue to favorably restructure our balance sheet by reducing debt while maintaining an adequate level of cash," said Michael Falvey, CFO of Aspect. "As a result of this transaction, we will recognize a one time pre-tax gain of $18 million that was not factored into our Q4 2008 guidance. Together with our repurchases conducted in Q2 and Q3, we have been able to reduce the face value of our debt by $60 million on terms that we believe are favorable to our shareholders. We expect to end Q4 with approximately $80 million in cash and $65 million face value of debt."
Aspect develops brain-monitoring technology. To date, its Bispectral Index technology has been used to assess roughly 29 million patients and has been the subject of more than 3,100 published articles and abstracts, the company noted. Aspect said it is also investigating how other methods of analyzing brain waves may aid in the diagnosis and management of neurological diseases, including depression and Alzheimer's disease.
In other financing news:
• Quidel (San Diego), a provider of point-of-care rapid diagnostic tests, reported that its board has authorized an extension of the company's current stock repurchase program. The extension authorizes the repurchase of up to an additional $25 million in shares of Quidel common stock under the repurchase program.
The Quidel board initially approved $25 million for the repurchase of common stock under the share repurchase program authorized in May 2005 and approved the repurchase of up to an additional $25 million under the program in March 2007. As of Dec. 1, there remains about $6 million available for repurchase of company common stock under the previously authorized repurchase program.
Shares of the company's common stock may be repurchased from time to time in both privately negotiated and open market transactions, including pursuant to a Rule 10b5-1 plan, subject to management's evaluation of market conditions, applicable legal requirements and other factors.
As of Sept. 30, Quidel had roughly 32,530,000 shares outstanding.
Marketed under the brand name of QuickVue, Quidel's portfolio of products includes tests that aid in the diagnosis of several disease or condition states, including influenza, respiratory syncytial virus, fecal occult blood, Strep A, pregnancy, bacterial vaginosis, H. pylori and Chlamydia.
• NewCardio (Santa Clara, California), a cardiac diagnostic and servicescompany, said it has completed a restructure of the going-forward terms of its Dec. 27, 2007, financing. As a result, the investors in the transaction have exercised a portion of their existing warrants, adding $2.8 million in cash to NewCardio's balance sheet.
This will extend the company's cash reserves to past the expectant revenue ramp, based on current and projected cash burns, NewCardio said. The agreement also results in a simplified capital structure that includes a restriction on transfer of certain of NewCardio's securities held by those investors that can extend through Sept. 30, 2009.
NewCardio is focused on the development of a platform technology to provide higher accuracy to, and increase the value of, the standard 12-lead electrocardiogram. Its development-stage software and hardware products and services are intended to improve the diagnosis and monitoring of cardiovascular disease, as well as cardiac safety assessment of drugs under development. The company's three-dimensional ECG platform is designed to reduce the time and expense involved in assessing cardiac status while increasing the ability to diagnose clinically significant conditions which previously were difficult to detect.
• Neoprobe (Dublin, Ohio), a developer of oncology and cardiovascular surgical and diagnostic products, said it has completed a $3 million convertible preferred stock and warrant investment by Platinum-Montaur Life Sciences.
The investment closed following the achievement of favorable initial Phase III Lymphoseek results in patients with breast cancer or melanoma. To date, the results show a concordance rate in excess of 96% for lymph nodes identified with Lymphoseek and patent blue dyes.
Neoprobe received the third funding of $3 million in exchange for convertible preferred stock and warrants to purchase common stock of Neoprobe. The third funding brings Montaur's total investment in Neoprobe to $13 million.
"The completion of the third funding by Montaur enables us to continue the development of Lymphoseek and validates our business strategy," said David Bupp, Neoprobe's president/CEO. "The commercialization of Lymphoseek, in concert with the dominant radiopharmaceutical distributor in the U.S., creates a commercial opportunity for Neoprobe in excess of $250 million annually. The achievement of positive Phase III results for Lymphoseek and the affirmation of the development plan for RIGS coupled with the continuing commercial success of our gamma device products portend an auspicious future for Neoprobe and its shareholders."
Lymphoseek is a radioactive tracing agent being developed for use in connection with gamma detection devices in a surgical procedure known as intraoperative lymphatic mapping. A Phase III multi-center clinical trial for Lymphoseek in patients with breast cancer or melanoma is under way and a protocol for a second Phase III clinical study to evaluate the efficacy of Lymphoseek as a sentinel lymph node tracing agent in patients with head and neck squamous cell carcinoma has been submitted to the FDA and the European Medicines Agency.
Rigscan, a diagnostic tool for colorectal cancer, failed to clinch FDA approval more than a decade ago and the company in recent years has been working to reboot its development.
The preferred shares are fully convertible at the option of Montaur into shares of Neoprobe common stock at a conversion price of 50 cents per share.
In addition, Neoprobe issued Montaur warrants to purchase 6 million shares of Neoprobe common stock at an exercise price of 58 cents per share. WBB Securities acted as the sole placement agent in the transaction with Montaur.