A Medical Device Daily
ReGen Biologics (Hackensack, New Jersey) reported that it has completed a private placement of convertible notes resulting in gross proceeds of about $500,000. This incremental bridge financing follows the Nov. 14 findings of the FDA Orthopedic Advisory Panel that ReGen's collagen scaffold device is as safe and effective as the predicate devices.
The financing is designed to enable the company to operate through the expected timeframe required for a decision from the FDA on its 510(k) submission, following which ReGen has in place a financing strategy designed to support launch of the collagen scaffold device in the U.S. should it receive a favorable decision from the FDA.
Under the terms of the financing, the company sold about $500,000 in aggregate principal amount of unsecured convertible notes. The notes accrue interest at an annual rate of 8% and become due and payable on July 24, 2009. At the option of the holders, the notes may be converted into the common stock of the company at a price of $3 per share.
In connection with the financing, the company issued five year warrants equal to 25% of the shares of common stock into which the notes may convert, exercisable at a price of 20 cents per share.
ReGen is an orthopedic products company that develops tissue growth and repair products for U.S. and global markets. ReGen's first approved product using its collagen scaffold technology is the Menaflex collagen meniscus implant, which is cleared for sale in Europe and other countries and marketed through ReGen's European subsidiary, ReGen Biologics.
QLT (Vancouver, British Columbia) reported that it would mail an offer to purchase and issuer bid circular to its shareholders today in connection with a modified Dutch auction tender offer for up to $50 million of common shares, previously reported on Dec.1.
The circular is being filed with the securities regulatory authorities in the U.S. and Canada. Under the terms of the tender offer, shareholders will have the opportunity to tender all or a portion of their shares at an individually selected price that is not less than $2.20 per share and not greater than $2.50 per share. The offer to purchase shares will expire on Jan. 15, 2009, unless withdrawn or extended.
If the tender offer is fully subscribed at the lowest price, 22.7 million common shares will be repurchased, representing about 30% of the roughly 74.6 million shares outstanding as of Nov. 28, the business day before the tender offer was first reported. If the tender offer is fully subscribed at the highest price, 20 million common shares will be repurchased, representing about 27% of the company's outstanding shares.
Goldman, Sachs & Co. and BMO Capital Markets are dealer managers for the tender offer.
QLT's research and development efforts are focused on pharmaceutical products in the field of ophthalmology. In addition, the company utilizes three technology platforms — photodynamic therapy, Atrigel and punctal plugs with drugs — to create products such as Visudyne and Eligard and future product opportunities.
In other financing news:
• Sunrise Senior Living (McLean, Virginia) reported the receipt of about $8.3 million of proceeds resulting from the refinancing of the existing debt of one of its joint ventures. Ventas (Louisville, Kentucky), a venture owned 85% by Ventas and 15% by Sunrise, closed eight first-mortgage loans with Freddie Mac, secured by eight senior housing communities managed by Sunrise, aggregating $126 million. Proceeds of the new $126 million Freddie Mac loan were used to repay in full $71 million of existing debt of the venture which was secured by the same eight assisted living communities and was scheduled to mature in mid-2009.
The balance of the new loan proceeds was distributed pro-rata to Ventas and Sunrise, with Sunrise's portion totaling about $8.3 million.
"We are pleased that Freddie Mac recognized the strength of this portfolio of our core management product in this difficult economic environment," said Sunrise CEO Mark Ordan.
On a preliminary basis, Sunrise expects to recognize about $8.3 million in equity in earnings as a result of this transaction in 4Q08.
Sunrise employs about 40,000. As of Sept. 30, it operated 448 communities in the U.S., Canada, Germany and the UK, with a combined capacity for about 55,000 residents.
• Triple-S Management (San Juan, Puerto Rico), the largest managed care company in Puerto Rico, reported that it has converted 7 million issued and outstanding Class A shares into Class B shares effective immediately, in conjunction with the expiration of the lockup agreements signed by holders of Class A shares at the time of the company's initial public offering.
It is expected that the newly converted Class B shares will gradually become tradable in the public market over the following weeks, as Class A shareholders surrender their certificates and complete the conversion process. This conversion will not affect the total outstanding common stock of the company, which remains at about 32.15 million shares.
In addition, the company's $40 million share repurchase program, which will use available cash and was authorized by the board in late October, will commence immediately.
The company noted that about 9 million Class A shares remain outstanding and will not be converted to Class B shares until the earlier of the date that all potential claims specified in its articles of incorporation are resolved or five years from the date of the initial public offering (Dec. 6, 2012).
Triple-S is an independent licensee of the Blue Cross Blue Shield Association. It is the largest managed care company in Puerto Rico, serving about 1.2 million members, or about 30% of the population, and has the exclusive right to use the Blue Shield name and mark throughout the country.