A Medical Device Daily
Constitution Medical Investors (CMI; Boston), a private investment firm focused on healthcare sector-related acquisitions and led by senior healthcare executives Patrick Sullivan and Daniel Levangie, reported its formation in partnership with Warburg Pincus.
Sullivan is the former president/CEO of Cytyc (Marlborough, Massachusetts) and, until recently, served as executive chairman of Hologic (Bedford, Massachusetts), which acquired Cytyc in October 2007 for $6.2 billion.
Levangie previously was executive VP of Cytyc and president of Cytyc's Surgical Products Division. He serves as a director of Hologic.
CMI will focus on the identification and acquisition of what it said are "innovative, healthcare-related platform technologies and companies where the principals will be able to leverage their product development, regulatory, clinical and commercial experience."
"Having helped to build Cytyc to its pre-eminent position in women's health, and with the integration of Cytyc with Hologic now complete, we are excited to put our extensive experience to work in a new venture," said Sullivan. "We are proud of our track record of success in creating value in the healthcare marketplace, and we are very pleased to partner with Warburg Pincus, which will provide us with world-class support and resources that will allow us to once again make a real difference in improving medical care."
WorldHeart (Oakland, California) reported that it will sell 300 million shares of common stock for $30 million in a deal to raise money to continue its operations.
The troubled company voluntarily removed its stock from the Toronto Stock Exchange earlier this month and it has been warned it could be delisted by the Nasdaq (Medical Device Daily, May 8, 2008).
The company, which makes mechanical blood pumps, lost $11.5 million on sales of $635,996 in the quarter ended March 31.
Last month World Heart said it was in danger of defaulting on a $5 million loan from Abiomed (Danvers, Massachusetts), which is secured by the company's assets. At that time, the company said it only had enough money to keep operating a few weeks.
In this deal, Venrock Partners will invest $10 million and Special Situations Fund will invest $9 million, both through several associated funds and corporate entities. WorldHeart is talking to other investors about the remainder of the money.
Abiomed has agreed to convert the $5 million debt owed by WorldHeart to 86 million shares.
Venrock and Special Situations Fund have agreed to a bridge loan of up to $1 million to WorldHeart.
This deal has certain closing conditions, but should be wrapped up by July 31, according to the company. The lending parties can terminate their obligations by Aug. 31 if the deal fails.
In other financing news:
• Elron Electronic Industries (Tel Aviv, Israel) reported that it has successfully completed its previously disclosed tender offer to purchase 1,462,640 ordinary shares of Given Imaging (Yokneam, Israel) at $16.54 per share, net to the seller in cash, less any required withholding taxes and without interest.
The tender offer, which commenced on May 16, expired this past Friday.
Elron has been advised by the depositaries for the tender offer that, as of the final expiration of the tender offer, a total of 5,330,044 Given Imaging shares had been validly tendered pursuant to the offer representing about 18.2% of the issued share capital of Given Imaging.
After payment for the Given Imaging shares tendered in the offer and accepted for payment, Elron will own 9,464,820 ordinary shares of Given Imaging, representing about 32.4% of the issued and outstanding shares and voting rights of the company, or 48.5% when taken together with 4,719,528 additional ordinary shares owned by affiliates of Elron.
• Sequenom (San Diego) reported that it has filed a preliminary prospectus supplement to an automatically effective shelf registration statement with the Securities and Exchange Commission relating to a proposed public offering of 5.5 million shares of its common stock.
In connection with the offering, Sequenom plans to grant to the underwriters a 30-day option to purchase up to an additional 825,000 shares of common stock.
All of the shares are being offered by Sequenom, which expects to use the net proceeds of the offering for the development of diagnostic tests for use on its MassArray system and other platforms, and for general corporate purposes.
Lehman Brothers and UBS Investment Bank are joint book-running managers in the offering. Co-managers for are Leerink Swann & Co., Lazard Capital Markets, Oppenheimer & Co. and Rodman & Renshaw.
• Sonic Innovations (Salt Lake City), a manufacturer of digital hearing aids, reported that the company's German subsidiary successfully negotiated an amendment with Commerzbank, a German bank, on a loan related to the 2003 acquisition of the German subsidiary.
The amendment resulted in Commerzbank removing the restricted cash security related to the original loan, freeing up about $5.2 million, and allowing the company to utilize the unrestricted cash for corporate purposes.
Sonic Innovations has guaranteed the remaining loan amount of about €2.75 million ($4.27 million) with the other terms of the original loan unchanged and pursuant to which Sonic will continue to make principal payments of €250,000 ($349,065) each quarter until the end of the loan.
As of March 31, Sonic Innovations had cash and cash equivalents of $14.1 million and a line of credit of $6 million with Silicon Valley Bank that the company has not drawn upon.
• GE Healthcare Financial Services (Chicago) reported that it has provided a $12.7 million three-year, fixed-rate first mortgage to Seavest (White Plains, New York), a boutique investment firm focused on developing, acquiring and managing healthcare real estate properties.
SEacvest said it will use the mortgage to finance the sale/lease-back of a physician group medical office building in Ruston, Louisiana.