A Medical Device Daily

BrainCells (San Diego), a company using its neurogenesis technology to identify and develop compounds that promote the growth of new neurons for the treatment of central nervous system (CNS) diseases, reported raising an additional $20 million in an extension of its Series B financing, bringing the total to $50 million.

Neurogenesis is the process by which endogenous stem cells in the adult human brain produce new brain tissue, including neurons. With its predictive screening platform, BrainCells said it can direct the selection and development of neurogenic compounds, increasing the opportunity for successful clinical trials in a variety of CNS indications.

The company said it would use the financing to continue product development, including a Phase II trial with its lead product candidate BCI-540, and to identify additional assets to expand its pipeline.

New investor New Enterprise Associates (NEA), along with current investors and Alexandria Real Estate Equities, participated in the extension. Other investors that participated in the Series B included MedImmune Ventures, Bay City Capital, Oxford Bioscience Partners, Technology Partners, Pappas Ventures and NeuroVentures.

BrainCells recently initiated a Phase II clinical trial with BCI-540 for the treatment of depression. The company said it in-licensed BCI-540 in August 2006 and used its neurogenesis technology to identify the compound's neurogenic profile, which is comparable to antidepressants on the market today, but that has shown in pre-clinical studies to not affect serotonin levels, which could avoid the negative side effects associated with existing drugs.

In other financing activity:

• CryoCath Technologies (Montreal) reported that a syndicate of underwriters led by GMP Securities has agreed to buy 4.19 million common shares for $4.15 a share, resulting in gross proceeds to CryoCath of $17,388,500. The agreement includes an over-allotment option for the underwriters to acquire a total of 628,500 additional shares for total gross proceeds of $19,996,775. The offering is expected to close around May 7.

CryoCath said it would use the proceeds for additional R&D and commercialization of its products, including its pivotal clinical trial aimed at obtaining FDA approval for its Arctic Front system to treat atrial fibrillation.

• VisEn Medical (Woburn, Massachusetts) reported a $5 million expansion of its Series B round, which initially raised $7 million in November, bringing the financing total to $12 million. Merck Capital Ventures and Flagship Ventures co-led the expansion. The company said it would use the additional funds to further advance its fluorescence in vivo imaging product pipelines and to expand its commercial applications and customer support of its marketed products.

• Osteologix (San Francisco) said it has completed its private placement of common stock and warrants. The company sold 4,030,304 shares at $1.32 a share, and warrants to purchase up to 2,015,152 shares of its common stock for gross proceeds of roughly $5.3 million. The warrants have an exercise price of $1.32 a share, subject to adjustment, and they expire Sept. 30, 2009.

Osteologix said it plans to use the proceeds for general corporate purposes, including development of its investigational drug NB S101. Punk, Zeigel & Co. acted as exclusive placement agent in connection with the financing.