A Medical Device Daily

SonoSite (Bothell, Washington), a developer of hand-held ultrasound for point-of-care medicine, said it has repurchased in the open market an aggregate of $60.3 million of the principal outstanding amount of its 3.75% convertible notes due 2014 for total consideration of roughly $47.4 million in cash, excluding accrued interest. Following these repurchases, convertible notes representing $164.7 million of principal debt are outstanding.

As a result of the repurchases that have occurred to date, SonoSite said it expects to report a pre-tax gain of about $11 million, net of deferred issuance costs, in the fourth quarter.

In connection with the issuance of these convertible notes in July 2007, SonoSite entered into a convertible note hedge transaction and a warrant transaction with an affiliate of one of the underwriters. These transactions were intended to reduce the potential dilution to SonoSite’s shareholders upon any conversion of the notes.

As a result of the recent repurchases, the associated convertible note hedges and a corresponding number of warrant positions will be unwound. The payment received from unwinding the associated convertible note hedges, less the cost of the warrant transaction, will result in net proceeds to SonoSite of about $400,000.

SonoSite currently has in excess of $280 million in cash and investments. Its board has authorized the repurchase of additional convertible notes in the open market or in privately negotiated transactions, as management deems appropriate. In the event of additional repurchases, the company said it would continue to unwind the associated hedges and a corresponding number of warrant positions.

In other financing news, Response Biomedical (Vancouver, British Columbia) said it has completed a second and final closing in respect to a financing reported on Oct. 14 and amended on Oct. 17, raising proceeds of $437,835, an amount in addition to the $4.66 million raised on Oct. 28.

A total of $5.1 million was raised in the private placement of 34,003,335 units at a price of 15 cents for each unit. Each unit consisted of one common share and one-half of one common share purchase warrant. Each full warrant is exercisable for one common share at a price of 20 cents a share.

The warrants may be exercised for a period of 36 months from the closing date.

Response said the common shares issued under the financing will have a hold period under Canadian law until March 1, 2009.

The company said net proceeds of this offering will be used for working capital purposes, in particular toward the launch of the Flu A+B test sold by 3M Medical (see story, p. 1) and the cardiovascular test line to be marketed by Roche Diagnostics (Basel, Switzerland).