A Medical Device Daily
Innovative Biosensors (IB; Rockville, Maryland), a company developing tests to identify harmful pathogens, reported the completion of an $11.5 million Series B financing which included equity and debt.
The Series B was led by Life Sciences Partners (LSP) and involved $9.5 million in equity capital. The company also increased its existing debt facility to $2 million from Silicon Valley Bank.
This financing follows on the prior Series A financing of $6.25 million raised in 2005. Previous Series A investors, including Harbert Venture Partners, Chart Venture Partners, New Markets Growth Fund and CNF Investments, participated in this round.
The new proceeds will be used to accelerate the commercialization of IB's sensitive, and rapid biosensor-based technology for the detection of hospital and community acquired infections. Based on the Canary technology developed at the Massachusetts Institute of Technology's (Cambridge, Massachusetts) Lincoln Labs, IB's technology is designed to allow for highly accurate and sensitive diagnostic tests with results available in minutes.
In conjunction with the additional financing, IB added two new members to its board, Dr. Jorg Riesmeier and Dr. Caroline Popper.
"Completing this round of financing with LSP and Silicon Valley Bank will ensure the rapid commercialization of our technology in the clinical diagnostic arena. Our success in the environmental marketplace and commercial potential in the IVD space has enticed the interest of additional investors, who may yet join this round," said Joe Hernandez, IB's president and CEO.
Early-stage venture firms DFJ Gotham Ventures and Draper Fisher Jurvetson reported that Widetronix from Cornell University (both Ithaca, New York) secured first place at the second annual DFJ East Coast Venture Challenge at Columbia (New York) Business School.
Widetronix's plan to market a pacemaker power supply with a 25-year life span won the competition's prize of $250,000 in seed funding, the largest purse of any student business plan competition in the country, the group said.
Teams participating in the challenge came from Columbia, Cornell, NYU, Yale, the University of Pennsylvania, Princeton, Brown, Carnegie Mellon, and Harvard.
"All of the teams' business plans demonstrated a tremendous amount of thought, effort, creativity and energy," said Ross Goldstein, Managing Director of DFJ Gotham Ventures. "However, we felt the Cornell team's idea for a long-lasting pacemaker power supply was the best investment opportunity presented, and deserving of the winner-take-all prize."
"Winning the DFJ East Coast Venture Challenge is extremely gratifying," said Widetronix president/CEO, Jonathan Greene. "The $250,000 in financing is obviously important, but we're also very excited to join the portfolios of DFJ Gotham and DFJ and enjoy all the advantages that entails."
In other financing news:
• EndoChoice (Lawrenceville, Georgia), a developer of GI Endoscopy products and services, reported that River Cities Capital Funds led its Series A financing round. The amount of the round was not disclosed.
The company said it will use the funds to accelerate their growth as they provide an efficient marketplace to the clinical staff within the highly fragmented medical market of GI endoscopy.
As part of the funding, Rik Vandevenne, principal of River Cities joined EndoChoice's board. Joining Rik on EndoChoice's board is Ed McCarthy, a managing partner of River Cities.
River Cities manages $390 million in four private equity funds that focus primarily on providing expansion-stage equity to healthcare and information technology companies.
"With more than 20 million endoscopy procedures in the U.S. each year, and thousands of products used daily, we have a great opportunity to make our customer's lives much more efficient." said Mark Gilreath, founder and CEO of EndoChoice.
• Prospect Medical Holdings (Santa Ana, California) which manages the medical care of about 240,000 HMO enrollees and operates four community hospitals in southern California, reported that it has obtained covenant waivers and other credit agreement amendments from all participating lenders in its $155 million senior secured credit facility.
Prospect entered into this facility in connection with the August 2007 $103 million acquisition of Alta Hospitals System (Los Angeles) (Medical Device Daily, Aug. 10, 2007).
Prospect said it has substantially completed the work necessary to file its Form 10-K for the fiscal year ended Sept. 30, 2007 and Form 10-Q for the quarter ended Dec. 31, 2007. However, as previously disclosed, these filings have been delayed pending the completion of discussions between the company and its lenders with respect to the amendments. With the signing of these amendments, the company said it can now complete the process of filing both Form 10-K and 10-Q reports. The company said it continues to expect to file its fiscal 2007 Form 10-K by the end of May, and its first and second quarter 2008 Form 10-Q filings shortly thereafter, with full completion of all filings on or before June 16, 2008.
Prospect operates four community-based hospitals in the greater Los Angeles area and manages the medical care of individuals enrolled in HMO plans in Southern California, through a network of more than 9,000 specialist and primary care physicians.