A Medical Device Daily
Cowen Healthcare Royalty Partners (CHRP; Stamford, Connecticut) and Cowen Group (New York) have reported the closing of CHRP's first investment fund, Cowen Healthcare Royalty Partners LP, with capital commitments of more than $500 million.
The fund was "significantly oversubscribed," CHRP said, far exceeding its initial target size of $350 million and representing one of the largest inaugural healthcare-focused private equity funds ever raised.
Launched in January 2007, CHRP makes long-term investments in commercial and near-commercial-stage healthcare products and companies worldwide through the purchase and monetization of passive royalties, the creation of what the firm terms Synthetic Royalties, and investments in royalties combined with equity or debt securities.
The fund targets investments between $20 million and $100 million across a diversified portfolio of products and therapeutic areas. CHRP said its investment approach and flexible fund structure enable the fund to offer healthcare companies "a variety of financial options in order to fund a commercial product launch or a new development opportunity; acquire a new product or technology; or otherwise unlock unrealized value."
The CHRP team is led by Gregory Brown, MD, Todd Davis and Clarke Futch, healthcare and investment professionals who report having invested close to $600 million together, including more than $80 million on behalf of the fund in the first half of 2008.
The company said this leadership team "has a proven track record of structuring long-term strategic financing partnerships with leading medical device and biopharmaceutical companies."
In addition to an anchor commitment by Cowen Group, the fund's limited partner base consists of a list of investors including public and corporate pension funds, financial institutions, insurance companies, funds-of-funds and university endowments. Eleven of the fund's investors collectively account for more than $470 million in commitments.
Selected investors include affiliates of OMERS Capital Partners, Crestline Management, Nordea, Strategic Investment Group, New York Life Insurance Co. and the Travelers Companies.
In other financing news:
• Integrated Healthcare Holdings (IHHI; Santa Ana, California), a hospital management company that owns four hospital facilities in Orange County, California, has entered into a securities purchase agreement with Kali Chaudhuri, MD, to provide additional equity investment in the company.
Chaudhuri will invest up to $10.7 million in IHHI. He has invested $3,731,732 through the exercise of outstanding warrants to purchase 24,878,213 shares of common stock at 15 cents a share.
In addition, Chaudhuri paid $50,000 for the right to invest up to another $6,968,268 in IHHI via purchase of 63,347,891 shares at 11 cents a share.
The purchase right can be exercised between Aug. 1 and Jan. 10, 2009, subject to IHHI satisfying certain conditions.
IHHI also agreed to register for resale securities owned by Chaudhuri and William Thomas following demand according to the securities purchase agreement. The agreement gives them certain pre-emptive rights to maintain their respective levels of ownership of IHHI common stock by acquiring additional equity securities with future issuances by the company of equity securities or securities or rights convertible into or exercisable for equity securities.
With execution of the agreement, IHHI and its subsidiaries entered into an early loan payoff agreement with Medical Provider Financial Corporation III, which holds a $10.7 million convertible term note issued by IHHI in October 2007.
In March 2005, IHHI acquired from Tenet Healthcare (Dallas) four facilities representing roughly 12% of the hospital beds in Orange County.
• Cardium Therapeutics (San Diego) said it has completed a registered direct offering with investors for the purchase of shares of its common stock, and warrants to purchase additional shares of its common stock.
The transaction resulted in proceeds to Cardium of roughly $3.34 million, before placement agent fees and offering expenses and excluding any future proceeds from the exercise of the warrants issued in the offering. Cardium said it will use the proceeds for general working capital purposes.
Empire Asset Management was financial advisor and placement agent for the transaction.
The securities were offered in accordance with a shelf registration statement filed with the Securities and Exchange Commission.
Cardium and its subsidiaries, InnerCool Therapies and the Tissue Repair Co., are focused on making products and devices for cardiovascular, ischemic and related indications.
The company's lead product candidate, Generx (alferminogene tadenovec, Ad5FGF4), is a DNA-based growth factor being developed for use by interventional cardiologists as a one-time treatment to stimulate the growth of collateral circulation in the hearts of those suffering ischemic conditions such as recurrent angina.