A Medical Device Daily

The Schumacher Group (Lafayette, Louisiana), an emergency medicine management firm, reported receiving a $75 million senior secured credit facility from GE Healthcare Financial Services (Chicago), which acted as sole lead arranger, book runner and administrative agent.

The company said it will use the credit proceeds to fund its continued expansion and refinance existing debt.

EBR Systems (Sunnyvale, California), a development stage, venture-backed device company, reported completing a Series C financing of $35 million.

The company is developing what it says is the "first leadless pacing system for cardiac stimulation applications."

The financing was led by Delphi Ventures, with participation by all current investors, SV Life Science Advisers, Split Rock Partners, Frazier Healthcare Ventures and De Novo Ventures.

The company said the funding will be used to complete product development and to initiate clinical trials of an implantable pacing device for left ventricular stimulation for the treatment of heart failure.

In other financing news, ReGen Biologics (Hackensack, New Jersey) reported that it has completed a $2.5 million private placement of convertible notes and it has submitted a new 510(k) seeking FDA clearance of its collagen scaffold device for reinforcement and repair of meniscus tissue.

The company said it expects net proceeds from the private placement combined with existing cash will enable it to operate well into 4Q08.

Under the terms of the financing, the company sold about $2.5 million in aggregate principal amount of unsecured convertible notes. The notes accrue interest at an annual rate of 8% and become due and payable on July 24, 2009.

At the option of the holders, the notes may be converted into Series F convertible preferred stock at a price of $15 per share or into the common stock of the company at a price of 15 cents per share if the Series F stock has previously converted to common stock.

In connection with the financing, the company issued five-year warrants equal to 25% of the shares into which the notes may convert, exercisable at a price of $1 per share of Series F stock or 1 cent per share if the Series F stock is converted to common stock.

Each share of Series F stock into which the notes may convert will automatically convert into 100 shares of common stock upon amendment of the company's certificate of incorporation or upon a reverse stock split of the common stock.

The company said it designed the financing transaction to realize sufficient capital to operate through the expected timeframe required for a decision from the FDA on its recent 510(k) submission.

In January 2006, ReGen disclosed that it would pursue a 510(k) instead of the more rigorous premarket approval process for the collagen scaffold device that it had been pursuing up to that point (Medical Device Daily, Jan. 5, 2006).

ReGen is an orthopedic products company that develops tissue growth and repair products for U.S. and global markets. Its collagen scaffold technology includes applications in orthopedics, general surgery, spine, cardiovascular and drug delivery.

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