A Medical Device Daily

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.

"We are pleased that we are able to take advantage of this opportunity to repurchase a portion of our debt at a discount to face value. Our cash position remains strong while we continue to favorably restructure our balance sheet," said CFO Mike Falvey.

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.

In other financing activity:

• Cardica (Redwood City, California) said it received a $1 million milestone payment from Cook Medical (Bloomington, Indiana) for the development of a specialized automated device used to close holes in the heart known as patent foramen ovales (PFO), a relatively common heart defect present in up to 20% of the general population.

Last year Cardica and Cook agreed to develop a PFO closure device (Medical Device Daily, June 20, 2007). Cardica is responsible for the design, production and manufacturing, which is directed by a development committee with representatives from both companies. Cook is responsible for preclinical and clinical development, as well as regulatory approval of the product, and, subject to regulatory approval will have exclusive worldwide commercialization rights to market the PFO closure device. Cardica has received a total of $3.1 million to date under the agreement. Cardica also is eligible to receive additional payments, of up to $500,000 over the next year if specified milestones are met, as well as royalties on future worldwide sales.

• 7 Health Ventures (Herzelia, Israel), a professional venture capital fund dedicated to investing in healthcare technologies and products, said it had joined a deferred closing of Tulip Medical's (also Herzelia) round A financing. Dr. Dalia Megiddo, founder and managing partner at 7 Health Ventures, will join Tulip's board of directors.

Tulip is developing a next-generation solution for the worldwide overweight and obesity epidemic, focusing on the overweight and mild obesity markets. Its flagship product is a orally taken biodegradable solution wherein patients will experience a long term feeling of satiety free of the severe complications associated with existing solutions. The company has developed a disposable medical device that is swallowed as a regular capsule. The device's mechanism of action is purely mechanical and does not involve any chemical activity, Tulip said.