A Medical Device Daily

EnteroMedics (St. Paul, Minnesota), a developer of devices using neuroblocking technology to treat obesity and other gastrointestinal disorders, reported that it has closed a new $20 million working capital loan, replacing its existing debt agreement.

Silicon Valley Bank, Western Technology Investment and Horizon Technology Management are providing the financing.

Proceeds from the loan will supplement the company's $28.6 million in cash, cash equivalents and short-term investments as of Sept. 30, and will be used to repay the existing balance of the company's working capital loan, to fund clinical studies and for general corporate needs.

The loan requires interest-only payments until June 2009, followed by principal and interest payments amortized over the next 30 months.

The loan agreement is part of EnteroMedics' long-range capital plan, including additional cash financing in 2009, which allows the company to reach its projected FDA approval date for use of the Maestro System in obesity, following positive data from the EMPOWER pivotal trial.

"These steps to add capital allow us to fund operations well into 2010, a period of significant consequence which includes pivotal data from the EMPOWER study in obesity as well as additional data in diabetes and hypertension, and reduce our dependence on the volatile capital markets over the next 12 to 18 months," said President/CEO Mark Knudson, PhD.

IRIS International (Chatsworth, California), a manufacturer of urinalysis systems and consumables for use in hospitals and commercial laboratories worldwide, reported that, effective immediately, its board has approved a new repurchase program for up to $10 million in shares of the company's common stock over a 12-month period.

"The board believes that reactivating a share repurchase program at this time is a prudent use of the company's cash and reiterates our commitment to enhancing shareholder value," said C sar Garc a, president/CEO and chairman.

The company said the repurchase program will be funded through its existing strong cash position. As of Sept. 30, IRIS had about $30 million in cash with no debt and is expecting strong cash flows from operations through the remainder of 2008 and 2009.

Share repurchases under this program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions or otherwise, or by any combination of such methods.

Under the company's previous share repurchase program disclosed in March, it repurchased about 490,000 shares at a cost of about $5.7 million.

In other financing news, Healthnostics (New York) said it has approved a reverse split of its Class A common stock at a ratio of 100-for-1, with a planned effectiveness by the end of the year. Each 100 shares of issued and outstanding common stock will be converted into one share of Class A common stock.

The company said the action is being taken "so that Healthnostics' stock price can return to a level more in line with the value of the company and to encourage greater interest in the stock by the investing community."

It also allows Healthnostics to increase shareholder value by capitalizing on and highlighting the continued growth and expansion of Global Medical Direct, in which Healthnostics has a major ownership interest.

Healthnostics is a medical and biotechnology analytics company. It provides comprehensive patient clinical monitoring and risk management systems to acute-care hospitals and utilizes its Internet portals to deliver medical and biotechnology resource information both to industry professionals and the public.