A Diagnostics & Imaging Week
ArKal Medical (Fremont, California) raised $17.5 million in a Series B financing round led by Thomas McNerney & Partners. Existing investors Delphi Ventures and MedVenture Associates also were significant investors in this round.
ArKal is developing a novel continuous glucose monitoring system for the management of diabetes. ArKal's monitoring system is designed to eliminate many of the inconveniences of current glucose monitoring technologies.
"There is a lot of room to improve both convenience and ease of use in continuous glucose monitoring in the management of diabetes. ArKal Medical's technology has the potential to make an important advancement and address significant unmet needs in this market," said Pete McNerney cofounder and partner at Thomas McNerney and Partners.
"With this investment, we will fund the next stage of corporate and product milestones," said Arvind Jina, PhD, president /CEO of ArKal.
NewCardio (Santa Clara, California), a cardiac diagnostic and services company, reported that several members of senior management have, in aggregate, purchased about 118,000 shares of the company's common stock in open market transactions in the last three weeks.
Vincent Renz, the company's new president; Ihor Gussak, MD, PhD, the new chief medical officer and VP; and Kenneth Londoner, senior director, business development and corporate finance, each acquired shares of NewCardio's common stock in the open market subsequent to the effectiveness of the registration statement at the end of August.
In aggregate, officers and directors now own about 36% of the outstanding stock in the company.
"I believe the current share price, impacted by the recent registration of shares from our initial financing and broader market conditions, does not accurately represent the long-term value NewCardio is creating," said Renz. "Despite being the most widely used diagnostic tool in cardiology, the ECG is not without flaws and I believe NewCardio's innovative, 3-D cardiac activity modeling software platform is poised to address these issues and add value to diagnostic, screening and drug development initiatives around the world."
NewCardio's 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.
In other financings:
• VentriPoint Diagnostics (Seattle) said it intends to complete a private placement of up to 8 million units, to be issued at a quarter a unit, for proceeds of $2 million.
Each unit will consist of one common share in company capital and one common share purchase warrant, the company said. Each warrant will entitle the holder to buy a common share at an exercise price of 25 cents, at the option of the holder at any time until the second anniversary of its issue date.
VentriPoint said it will use the proceeds of the placement to complete the development and external testing of its diagnostic system, and support the company through the approval process and commercialization of the system in Canada and Europe.
VentriPoint creates diagnostic tools to monitor patients with heart disease.
By using data produced from existing 2D or 3D medical imaging systems, the VentriPoint system creates a 3D model of the right and left ventricles and generates heart measurements in a rapid and inexpensive manner not currently available, according to the company.
The system is based on technology VentriPoint received through its technology license with the University of Washington (Seattle). The VentriPoint diagnostic system, together with its associated online service, is being developed for a variety of heart related disease states, including congenital heart disease.
• Cogdell Spencer (Charolotte, North Carolina) said it has begun an underwritten public offering of 1.85 million shares of common stock. Cogdell said it also will grant the underwriters an option to buy up to another 277,500 shares.
Banc of America Securities, KeyBanc Capital Markets and Citi are joint book-running managers and Raymond James, BMO Capital Markets and Janney Montgomery Scott are co-managers.
The company said it intends to use the net proceeds from the offering to reduce borrowings under its secured revolving credit facility and for working capital purposes.
Cogdell Spencer is a real estate investment trust that invests in specialty medical office buildings, including medical offices, ambulatory surgery and diagnostic centers.
• Illumina (San Diego) reported that a proposed amendment to its certificate of incorporation, designed to increase the number of authorized shares of its common stock from 120 million to 320 million, was approved Tuesday at a special meeting of its stockholders. The company said it now has enough authorized shares to effect the 2-for-1 stock split approved by its board on July 20. The board established Sept. 10 as the record date and Sept. 22 as the date on which additional shares will be distributed to stockholders.
Illumina develops next-generation life science tools and integrated systems for the analysis of genetic variation and biological function. Using its technologies, the company says it provides products and services that currently serve the sequencing, genotyping, and gene expression markets, and it expects to enter the market for molecular diagnostics.
• Signalife (Los Angeles) said its board has approved a consolidation of its common stock in the form of a reverse stock split which will be effected as of 4:30 p.m. EST on Sept. 19. At that time, all outstanding shares of Signalife common stock will be consolidated into such number of shares as would result in a $45 a share stock price based upon the closing price for the common stock as of the record date.
The reverse stock split will be structured in the form of a mandatory share exchange, meaning that each shareholder will be required to first exchange his or her certificate with the company's stock transfer agent in order to change title incident to any sale or other transaction.
Signalife also reported that its principal shareholder, ARC Finance Group, and certain company directors, have agreed to invest a total of $5 million on the first business day after the full implementation of the reverse stock split with the Delaware Secretary of State. The investors will buy a new series of convertible preferred stock, to be designated series B, and will be entitled to a number of such preferred shares equal to the $5 million divided by the average closing market price for the common shares as of the date of the commitment or investment, whichever is higher. This series of stock will be redeemable in five years, together with interest accrued at LIBOR plus 2%. The investors may, after a one-year holding period, convert their investment in the series B preferred shares, including accrued interest, into common shares at the ten-day average closing market price for the common shares as of the date of the conversion.
Signalife is focused on the monitoring, detection and prevention of disease through continuous biomedical signal monitoring.
• Aspect Medical Systems (Norwood, Massachusetts) said it has repurchased an aggregate of $15 million face value of its 2.5% convertible senior notes due 2014, for aggregate consideration of about $9 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, $100 million of the 2.5% notes remain outstanding, the company said.
As of June 28, Aspect had roughly $107 million in cash and marketable securities, without giving effect to the $9 million used by Aspect to repurchase a portion of the 2.5% notes.
Because this repurchase was completed at a discount to face value, Falvey said Aspect would record a one-time gain of about $6 million on a pre-tax basis during its quarter ending Sept. 27, 2008. This gain was not reflected in the company's 3Q08 guidance, he said.
Aspect's Bispectral Index (BIS) technology has been used to assess nearly 27 million patients and has been the subject of about 3,000 published articles and abstracts. The company 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.