A Medical Device Daily

Emphasys Medical (Redwood City, California), which developed a medical device to treat emphysema, reported that it has canceled its plans for an initial public offering, citing unfavorable market conditions, according to a Securities and Exchange Commission filing.

In September 2007 when Emphasys filed for the IPO, the company estimated that the offering price could total up to $86.3 million (Medical Device Daily, Sept. 25, 2007).

The same month, Emphasys filed for premarket approval of its first product, the Emphasys endobronchial valve. The product is a one-way silicone valve that is inserted into airways to prevent air from entering the diseased portion of the lung during inhalation.

The company is currently responding to a letter from the FDA noting deficiencies in the application related to testing and other issues.

The company sells its product on a limited basis in Europe and plans a full commercial launch there by mid-2008.

In 2007, Emphasys reported a loss of $11.9 million on revenue of $1.4 million.

The company had planned to use its net proceeds from the IPO for sales, marketing and administrative activities, as well as for research and development, capital equipment purchases and the commercial scale-up of its manufacturing facility.

Morgan Stanley, Thomas Weisel Partners, Leerink Swann and Canaccord Adams were expected to underwrite the offering.

In other financing news: Citing the continued increasing sales of its PathFinderTG, RedPath Integrated Pathology (Pittsburgh) reported its expansion and relocation into new headquarters in Pittsburgh and the growth of its work force which now totals 50, up from 20 a year ago.

The company also reported that it has closed an insider round of financing for $3 million. The proceeds of the transaction will support the company's continued growth and expansion in the region, it said.

The company recently moved into its new 20,000 square foot headquarters at 2515 Liberty Avenue in Pittsburgh's Strip District.

"NewSpring Capital has been an investor in RedPath from the beginning and we are pleased to lead in this latest investment round," said Brian Murphy, chairman of RedPath's board and a partner in NewSpring Capital, which invests in biopharmaceutical, medical devises and healthcare services companies. "RedPath has seen significant returns on its groundbreaking work and is well-positioned to help change the way cancers are diagnosed."

The company said its PathFinderTG represents a significant advance in minimally intrusive and early diagnosis of cancer.

RedPath said it has quadrupled its sales force and expects sales to triple over the next 12 months.