A Diagnostics & Imaging Week

Allegro Diagnostics (Boston), a developer of molecular diagnostics for lung cancer, reported completing a $4 million Series A financing.

Kodiak Venture Partners led the round and was joined by Catalyst Health Ventures and Boston University.

Allegro said it will develop products based on gene expression technology developed by Jerome Brody, MD, and Avrum Spira, MD, MSc, within the Pulmonary Center at the Boston University School of Medicine. Brody, formerly head of the Pulmonary Center, has joined Allegro as its chief scientific officer.

“The Series A financing will enable us to take our first product, based on intellectual property developed at the Boston University School of Medicine, into the clinic to provide earlier, more accurate diagnosis of suspected lung cancer for patients and their doctors,” said Dan Rippy, president/CEO of Allegro. “The clinical community considers earlier identification of lung cancer a major unmet need in treating the disease so our diagnostic should provide significant benefit.”

Andrey Zarur, general partner with Kodiak Venture Partners, and Josh Phillips, general partner with Catalyst Health Ventures, joined the company’s board.

“Allegro opens a novel alternative to assist physicians in diagnosing and potentially treating lung cancer,” said Zarur, who becomes company chairman.

In other financing news:

• CardioNet (San Diego), which provides real-time outpatient management solutions for monitoring an individual’s cardiac health, recently reported terms for its IPO in a filing with the SEC. The company plans to offer a total of 6.6 million shares, 3.6 million from selling shareholders, at a range of $22 to $24. The company said it stands to raise about $61 million in proceeds if the offering prices at the midpoint. CardioNet first filed for the offering in August. It is expected to price next week.

CardioNet has granted its underwriters a 30-day option to purchase up to 990,000 additional shares of common stock to cover any over-allotments.

The CardioNet system incorporates a lightweight, patient-worn sensor attached to electrodes that capture two-lead ECG data that analyzes incoming heartbeat-by-heartbeat information from the sensor on a real-time basis, transmitting the ECG to the CardioNet Monitoring Center, without patient involvement. At the monitoring center, certified cardiac monitoring specialists analyze the sent data, respond to urgent events and report results in the manner prescribed by the physician.

The company said it intends to use the net proceeds from the offering to repay in full a term loan to Silicon Valley Bank and make required payments to former stockholders of PDSHeart (West Palm Beach, Florida), which it acquired last March. The company also said it would use the funds for R&D; to increase its sales and marketing capabilities for the CardioNet system; to acquire or license products, technologies or businesses and for working capital and general corporate purposes.

The company said it has incurred net losses from its inception through Dec. 31, 2007, including net losses of $11.5 million for the year ended Dec. 31, 2005, $7.6 million for the year ended Dec. 31, 2006 and $400,000 for the year ended Dec. 31, 2007.

The company filed to be listed on the Nasdaq under the ticker symbol BEAT.

• Sleep Solutions (SSI; Pasadena, Maryland) reported that it has secured $20.5 million in additional venture funding.

SSI is developing services for direct-to-patient diagnosis, therapy and compliance of sleep-disordered breathing, including obstructive sleep apnea (OSA).

The company said the additional investment will be used to build a national sales and marketing capability, expand facilities, and continue driving company development of new applications for its NovaSom QSG diagnostic medical device and MediTrack Patient Management System.

Grossman and Ned Brown, also a managing director of TPG Biotech, have joined the company’s board, with Grossman to serve as chairman.

• ProUroCare Medical (Minneapolis) reported that on Feb. 28, it closed a private placement of $240,000 of units consisting of unsecured, subordinated, convertible promissory notes and common stock purchase warrants.

The net proceeds will be used to pay certain existing obligations and for general corporate purposes. Combined with its previous private placement closings since Dec. 27, 2007, the company said it has sold a total of $1.52 million of investment units to date, and has converted an additional $150,000 of debt into investment units.

ProUroCare is developing mechanical imaging technology applications to improve detection and active surveillance of prostate disease.

• Pulse Health (Portland), a company developing a product designed to allow consumers to measure their health status through Exhaled Breath Condensate (EBC), reported that it has secured $2.15 million in Series A financing.

The company said it will use the funds for marketing its first suite of products that target the antioxidant supplement channel, and future product development efforts.

Pulse has invented a method to instantly measure health markers through a breath test. Pulse’s flagship product is a handheld device that detects free radicals through a colorimetric reaction, and reactions are measured using a consumer-accessible spectroscope. Pulse’s method of reading the breath — known in the scientific community as EBC — represents a dramatic scientific advancement, it said.