A Medical Device Daily
Bioheart (Sunrise, Florida), a company working to commercialize cell therapy for regeneration of the heart, has reduced the number of shares and lowered the pricing of its initial public offering, moves that greatly trim its original prospects for the offering.
Bioheart is offering 1 million shares at a price of $6 to $8 a share. The estimated proceeds assume an offering price of $7 a share. And it has granted the underwriters a 30-day option to buy up to another 150,000 shares to cover over-allotments.
It said the net cash proceeds from the IPO would be about $5.5 million, and another $1 million if the over-allotment option is exercised in full. But the company said that because of the prior payment of another $2.8 million and other offering expenses, as of Jan. 1, it will only see proceeds of about $2.7 million, or $3.6 million with the over-allotment sale.
Overall, the new offering terms represents a huge drop from the $46.9 million it had hoped to raise when it first filed for the IPO last October. In that filing the company reported filing with the SEC to raise $46.9 million after expenses from an IPO of 3.6 million shares at an assumed price of $15 a share (Medical Device Daily, Oct. 2, 2007).
Bioheart said in its filing it intends to use the proceeds of the offering to support the growth of its business, including: about $3.1 million needed to begin full-scale enrollment in the MARVEL trial; roughly $900,000 for the repayment of a portion of principal and accrued interest on its BlueCrest loan; and about $150,000 for projected payments on the company’s license agreements.
The company said $3.1 million from IPO proceeds, plus about $3.5 million of cash on hand, should be enough to fund enrollment, randomization and treatment of about 130 of the 330 patients in the MARVEl trial. Bioheart needs to raise at least $9.7 million more to finance the completion of the trial, the company noted.
Bioheart said it expects to use the proceeds of its $5 million BlueCrest loan, which bears interest at a rate of 12.85% and is scheduled to mature in May 2010, for general corporate purposes.
The company’s lead product candidate is MyoCell, a clinical therapy designed to populate regions of scar tissue within a patient’s heart with living muscle tissue for the purpose of improving cardiac function. MyoCell has not received regulatory approval.
According to the risks detailed in its SEC filing, Bioheart acknowledges a limited operating history, limited capital, limited revenue sources, and has incurred losses since its inception. As of Sept. 30, the company has accumulated a deficit during its developmental stage of about $73.7 million. Bioheart said it expects to continue to incur “significant and increasing net losses and negative cash flows from operations for the foreseeable future.”
In other financing activity:
• Pervasis Thearpeutics (Cambridge, Massachusetts), another company developing regenerative cell-based therapies and devices, said it has secured $9.75 million in additional financing through Flagship Venture Partners, Plaris Venture Partners, Highland Capital Partners, and Musket Research Associates.
The investment will support the development of Pervasis’ Vascugel blood vessel repair therapeutic, now in Phase II clinical trials, as well as continuing research into expanding the product’s projected uses into additional vascular and non-vascular applications, including cardiovascular, the company said.
The funding follows a number of recently achieved milestones, Pervasis noted. In September, the company published an animal data study on Vascugel “strongly supporting” its role in promoting healing after blood vessel inujury.
And in August, the company completed patient enrollment for its two Phase II trials of Vascugel in human subjects with end-stage renal disease (ESRD) who require arteriovenous fistula (AVF) and arteriovenous graft (AVG) access for hemodialysis. Initial safety results for Phase I trials of the product, reported in November 2006, showed “encouraging results,” Pervasis said, with all primary safety endpoints of the study achieved.
Vascugel is an allogeneic cell therapy product intended to enhance repair and prevent clinical failure of vascular surgery and intervention.
Pervasis develops technologies designed to restore natural blood flow to critical organs.
• Nymox Pharmaceutical (Hasbrouck Heights, New Jersey), said it has secured a commitment for $15 million in equity financing from institutional investors. The money will be used for general corporate purposes, the company said.
The financing gives Nymox the right to place common stock to the investors at a 3% discount to the market price of its stock. There are no warrants, price resets, and no restrictions on other corporate financing, the company noted.
Nymox is a biotech engaged in the R&D of therapeutics and diagnostics, with an emphasis on products for the aging population.
• Embrella Cardiovascular (Malvern, Pennsylvania) said it has completed its initial round of funding, raising $2.3 million.
The financing round included the MedFocus Funds, BioStar Fund, and Zeke, in addition to the company’s founders and angel investors.
Embrella is an early stage company developing a system intended to enhance embolic cerebral protection, enabling interventionalists to reduce the frequency of embolic strokes during cardiovascular procedures.