A Medical Device Daily

Affymetrix (Santa Clara, California) reported the issuance of an additional $41.25 million of unsecured 3.50% senior convertible notes, due 2038, in accordance with an over-allotment option granted to the company's underwriter in connection with its previously announced offering of $275 million of unsecured 3.5% senior convertible notes, due 2038.

The additional notes were sold in accordance with a previously filed shelf registration statement.

In other financing activity:

  • North American Scientific (NAS; Chatsworth, California) reported entering into a purchase agreement with Three Arch Partners IV and affiliated funds, SF Capital Partners and CHL Medical Partners III, and an affiliated fund for the private placement of 63,008,140 shares of common stock of NAS, value $0.01 a share, and warrants to purchase 3,150,407 shares of common stock for a total of $15.5 million, with net proceeds to the company of about $14,115,000. The purchase price is equal to $0.246 per security, of which $0.01 is allocated to the warrants. The purchase price represents a 40% discount to the volume weighted average price of the common stock on the Nasdaq Global Market for the 20 trading day period ending on the trading day immediately preceding the date of the purchase agreement. The warrants have an exercise price of $0.246 a share, subject to adjustments. The warrants may be exercised no earlier than 180 days from the closing date of the transaction and will expire seven years from the date of issuance. To close the private placement, the company must obtain stockholder approval and also approval for the amendment of its certificate of incorporation to increase the number of shares it can issue. The securities purchase agreement requires that the company file a preliminary proxy statement, information statement or consent statement with the SEC to solicit stockholder approval by Wednesday. Three Arch currently owns 5,121,638 shares of NAS common stock. If the transaction is consummated, Three Arch's percentage ownership of the outstanding common stock will increase from about 17.3% to 49.4% (43.9% of the common stock on a fully diluted basis). NAS develops radiation therapy products to treat various types of cancers.
  • Amicas (Boston), a developer of radiology and medical image and information management solutions, reported board authorization to repurchase up to $25 million of the company's common stock. "This plan also allows us the flexibility to repurchase shares when the company may otherwise be precluded from doing so under insider trading laws," said Stephen Kahane, MD, CEO and chairman. Amicas said that the next update regarding the stock repurchase program will be at its regularly scheduled year end earnings call. Amicas describes its Vision Series of products as providing a "complete, end-to-end solution for imaging centers, ambulatory care facilities, and radiology practices."
  • ArthroCare (Austin, Texas), a developer of minimally invasive surgical products reported board approval of up to $75 million of its outstanding common stock. It said that a majority of the repurchases is expected to be completed by March 31. "We expect this share repurchase to be accretive to our EPS and to enhance shareholder value," said Mike Baker, president/CEO of ArthroCare. The company also commented on a recent press report alleging that one of the company's reimbursement service providers may have engaged in inappropriate business practices, including, it said, "an inaccurate allegation that the Massachusetts Attorney General's office was 'looking into' ArthroCare's relationship with its service provider." ArthroCare said that it contacted the Attorney General's office "and was informed that there was no such investigation." It said it had reviewed the article in question "and found numerous material inaccuracies. The company intends to contact the publisher to request a correction ..." Baker said: "Our FDA-cleared plasma disc decompression products are globally recognized as being among the most clinically successful and cost-effective spinal therapies. We have carefully reviewed the business practices of our service provider and have found no evidence of anything improper in their activities. In fact, we believe that the application of a disciplined diagnostic and treatment algorithm improves patient selection and outcomes, and that the involvement of experienced professionals in the reimbursement process significantly decreases the chance of administrative errors."
  • Alexis Lukianov, CEO and chairman of NuVasive (San Diego), has exercised options for and sold 20,000 shares of company stock, according to an SEC filing. Lukianov exercised the options for $3.75 apiece and sold them all on the same day for $41.97 apiece. The company said that the sale was conducted under a prearranged trading plan allowing a company insider to set up a program in advance for such transactions and proceed with them even if coming into possession of material non-public information. NuVasive manufactures surgical products for spine disorders.
  • The senior VP and general counsel of medical products manufacturer Becton Dickinson (Franklin Lakes, New Jersey) has sold 5,550 shares of common stock, according to a Securities and Exchange Commission filing. In the filing, Jeffrey Sherman reported that he sold the shares for $83.75 apiece.