A Medical Device Daily
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.
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.
In other financing news:
• Arrowhead Research (Pasadena, California) reported recent moves as part of its initiative to conserve capital while maintaining commercialization progress at its subsidiaries.
Arrowhead said it has raised a total of $2.7 million into majority-owned subsidiary, Unidym, from existing strategic investor, Tokyo Electron Ventures and from the sale of certain non-core assets; it raised $2.7 million into majority-owned subsidiary, Calando Pharmaceuticals; it redirected $1.7 million from wholly-owned subsidiary, Tego Biosciences back into Arrowhead.
Calando and Unidym are Arrowhead's most mature subsidiaries and, consequently, its greatest consumers of capital, the company said. Raising $5.4 million directly into these companies while bringing $1.7 million from Tego back to Arrowhead strengthens the company's cash position for fiscal 2009.
Arrowhead Calando has signed agreements for $2.7 million of capital structured as unsecured convertible notes. These notes have a 2-year maturity, bear interest of 10% per annum, are convertible into Calando common stock and are redeemable at a premium under certain conditions. The goal of this capital infusion is to provide sufficient runway to a liquidity event.
Unidym received a total of $2.7 million from a follow on equity investment from strategic investor Tokyo Electron Ventures and the sale of certain non-core assets. This cash infusion is intended to facilitate key milestones within its initial focus areas of LCDs and touch screens, Arrowhead said.
Arrowhead redirected $1.7 million in cash from Tego back to Arrowhead through a buyback by Tego of Series A-1 Preferred Stock purchased by Arrowhead in November 2007. The move was in connection with Tego's streamlined business model to focus primarily on partnering and licensing its fullerene-based intellectual property rather than developing products internally.
• NewCardio (Santa Clara, California), a cardiac diagnostic and services company, 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.
• Essilor (Charenton-le-pont, France) said it has cancelled 1.6 million shares, in line with its commitment to shareholders to offset the dilutive impact of Oceane bond conversions and the company's stock option plans.
These latest cancellations concerned shares acquired under the 6.9 million share buyback program authorized by the board on July 15 to offset the dilutive impact of converting outstanding Oceane bonds due in 2010. To date, 1.5 million shares have been bought back under this program, Essilor said.
At the same time, in line with its standard practice, Essilor said it has cancelled shares bought back on the market in order to offset the dilutive impact of its stock option plans, and also of its performance share plans which are covered by shares held in treasury stock.
Following these cancellations, Essilor's capital is represented by 210,445,678 shares.
Essilor makes optical products.