A Medical Device Daily
Neoprobe (Dublin, Ohio), a developer of oncology and cardiovascular surgical and diagnostic products, said it has signed agreements for a $13 million financing from Platinum Montaur Life Sciences.
The first funding under the securities purchase agreement is for $7 million, which will be used to repay in full $5.7 million in notes that were due in January 2009, Neoprobe said. In addition, funding from the first closing will retire more than 10.12 million in warrants to purchase shares of Neoprobe common stock that were associated with the notes due in 2009.
Neoprobe said that Montaur has committed to additional funding, aggregating to $6 million, that will be used to support the development of Lymphoseek.
Lymphoseek (Technetium Tc99m DTPA-mannosyl-dextran) is a radioactive lymphatic mapping targeting agent being developed by Neoprobe for use with handheld gamma detection devices, such as Neoprobe’s neo2000 system. After achieving positive efficacy results in recently completed Phase II multi-center clinical trials for Lymphoseek, Neoprobe has said it will move forward with preparations for two Phase III clinical trials; one in breast cancer and one in melanoma.
David Bupp, Neoprobe’s president/CEO, said that the financing “provides us with the financial resources to complete the clinical and other development activities associated with Lymphoseek. Coupled with the recently completed marketing and distribution agreement for Lymphoseek in the United States, and the recently extended marketing agreement for our gamma detection device products ... Neoprobe is prepared to take the next steps in our evolution as a multiple product biomedical company, with both device and drug revenues.”
The first funding of $7 million is in the form of a secured note, due December 2011, partially convertible at the option of Montaur into shares of Neoprobe common stock at a negotiated fixed conversion price of 26 cents. If Montaur converts all of the first note into common stock Neoprobe would issue 13,461,538 shares of common stock to Montaur.
In addition, Neoprobe issued to Montaur warrants to purchase 6 million shares of common stock at 32 cents a share.
A second funding of $3 million will occur upon the commencement of the Phase III clinical studies of Lymphoseek. The second funding will be in the form of a secured note payable December 2011. The second note will be convertible at the option of Montaur into shares of Neoprobe stock at the lesser of 40 cents a share or the closing price of Neoprobe common stock prior to closing. At the second closing Neoprobe will issue to Montaur warrants to purchase an amount of shares of Neoprobe common stock equal to the number of conversion shares at 115% of the conversion price of the second note.
Finally, a third funding of $3 million will occur upon the completion of the enrollment of 200 evaluable patients in the Phase III clinical studies of Lymphoseek.
This funding will be in the form of convertible preferred stock of Neoprobe, fully convertible at the option of Montaur into shares of Neoprobe common stock at the lesser of 50 cents a share or the closing price of Neoprobe common stock prior to closing. In addition, Neoprobe will issue to Montaur warrants to purchase an amount of shares of Neoprobe common stock equal to the number of conversion shares at 115% of the conversion price of the preferred stock.
WBB Securities served as the placement agent on the transaction with Montaur.
In other financing news: Biomaterials company Artimplant (Vastra Frolunda, Sweden) reported that it has signed a licensing agreement with Small Bone Innovations (SBI; New York) related to all joints in the hand and wrist domain.
Artimplant said that the license is exclusive and global (except for the Nordic countries) and covers resurfacing with Artelon, a concept that contributes to regenerating function in joints degenerated due to osteoarthritis.
Artimplant will receive an up-front payment of $500,000 for the license, and SBI will absorb all expenses for development and regulatory registration of new Artelon implants for the hand and wrist. The companies also have granted each other an option to transfer the ownership of existing product clearances to SBI for an aggregate amount of $400,000.
Artimplant said it will develop at least three new products in the hand and wrist domain, the first development project to start immediately. The licensing agreement refers to all resurfacing products for joints in the hand and wrist not previously been out-licensed to SBI.
The Artelon Resurfacing concept creates the preconditions for the body to heal itself.
Artimplant in a statement, said, “The thought is pioneering: a minimal resection of the joint afflicted by osteoarthritis creates the preconditions for integration of tissue in the Artelon-implant, thus creating a new joint surface. The patient regains a functional joint.”
In addition to the license for joints in the hand and wrist, in accordance with reciprocal “call” and “put” options, Artimplant is entitled to transfer to SBI, and SBI is entitled to require Artimplant to transfer the ownership of existing product clearances of Artelon CMC Spacer, Artelon CMC Spacer Arthro, Artelon STT Spacer and Artelon DRU Spacer to SBI for $400,000.
Artimplant is focused on solutions to problems in orthopedic and oral surgery. It produces implants for treatment of osteoarthritis in hands and feet, for shoulder and other soft tissue injuries as well as oral applications.
Artimplant is listed on the OMX Nordic Exchange Stockholm in the Small Cap segment, in the healthcare sector.