A Diagnostics & Imaging Week

Flexible Medical Systems (FMS; Rockville Maryland) reported completing a private placement of $1.2 million of common equity to accredited investors.

The company said it will use the proceeds to conduct human proof-of-concept trials, to pursue additional intellectual property filings and for general working capital.

“The proceeds from this investment will provide us with funding to pursue our business plan. We intend to demonstrate our proven animal study results in humans which will allow us to go to the next level,” said Richard Smith, company president.

FMS also said that Paul Brown, MD, has been elected to the company’s board. Brown is the founder and chairman of HearUSA, which operates more than 170 hearing care centers.

“Paul’s extensive experience as a doctor, entrepreneur and business leader within the challenging life science service business makes him an ideal member of FMS’s board,” said John Currie, PhD, founder and chief science officer of FMS.

FMS develops bio-monitoring products and technologies that it says are designed for health and fitness needs.

TomoTherapy (Madison, Wisconsin) a company developing radiation treatments for cancer, reported filing a registration statement for a proposed secondary offering of 8.5 million shares of its common stock solely by certain selling shareholders.

The shareholders also will grant the underwriters an option to acquire another 1,275,000 shares to cover over-allotments. The company won’t receive any proceeds from the sale of the shares but will pay the expenses of the offering, excluding underwriting discounts.

Merrill Lynch & Co. is acting as book-running manager, and Piper Jaffray & Co., Thomas Weisel Partners, Robert W. Baird & Co. and William Blair & Company, are directors.

In other financing news:

• Elbit Medical Imaging (EMI; Tel Aviv, Israel) reported that it has completed a classified investors bidding in connection with public offerings of units consisting of a new Series E Notes and units consisting of a new Series F Notes, through two separate and independent tenders on the annual interest rates to be borne by each of Series E Notes and Series F Notes.

EMI offered 350,000 units of Series E Notes and Series F Notes, each consisting of NIS 1,000 par value, for a principal amount of NIS 350 million. The maximum annual interest rate offered for the Series E Notes was 6.5%, and the maximum annual interest rate offered for the Series F Notes was 5.9%.

During the Classified Bidding, EMI received early commitment offers for the purchase of 157,920 units of Series E Notes for a total consideration of about NIS 157.9 million (around $38.7 million) and early commitment offers for the purchase of 448,164 units of Series F Notes for about NIS 448.2 million (around $109.9 million).

Following the Classified Bidding, EMI accepted orders for 53,100 units of Series E Notes for a total of NIS 53.1 million (about $13 million) and orders for 295,867 units of Series F Notes for a total of NIS 295.9 million (about $72.5 million). The annual interest rate for Series E Notes and Series F Notes, linked to increases in the Israeli consumer price index, was determined in the Classified Bidding to be 6.3% and 5.7%, respectively.

• Cepheid (Sunnyvale, California) reported an agreement to license the Human Papillomavirus (HPV) patent portfolio held by Quantovir (Uppsala, Sweden) for the measurement of high-risk HPV types using DNA-based detection.

Quantovir said it believes it is the first to demonstrate that a molecular diagnostic test measuring the quantity, or viral load, of HPV DNA present in cervical specimens can be used to predict a woman’s risk of developing cervical cancer. Cepheid said it plans to use Quantovir’s technology to develop a new type of HPV test for the GeneXpert System.

Deal terms were not disclosed.

“The GeneXpert System is ideal for the rapid diagnosis of infectious organisms like Methicillin-resistant Staphylococcus aureus [MRSA], but it can also be used to generate actionable, treatment-determining results in other medical areas including oncology and pharmaocogenetics,” said John Bishop, CEO of Cepheid. “With the GeneXpert System, molecular diagnostics is no longer reserved solely for the highly complex laboratory setting; it is also enabling the benefits of this technology to be realized in moderately complex settings.”

Given the correlation of the presence of HPV with cervical cancer, HPV DNA testing has become a diagnostic determinant of cancer risk. However, current tests approved by the U.S. FDA do not measure sample adequacy, and thus cannot accurately quantitate HPV viral load, according to Cepheid. Cepheid said that its potential HPV test for the GeneXpert System will be designed to measure HPV viral load to identify high-risk patients, “making it unique among current HPV DNA testing products. “

Professor Ulf Gyllensten of the Rudbeck Laboratory (Uppsala), said, “Early detection delivers greater opportunities for improving patient outcomes.”

Quantovir is based on the R&D work of Gyllensten at the department of Genetics and Pathology at the Rudbeck Laboratory, and is owned by Innovationsbron I Uppsala, Uppsala Universitets Holdingbolag, together with a research group led by Gyllensten.

Cepheid manufactures systems for genetic analysis for the clinical, industrial and biothreat markets.

• American Shared Hospital Services (ASH: San Francisco) a provider of technology solutions for advanced radiosurgical and radiation therapy, reported that it is suspending any cash dividend.

“While our cash flow is solid and our cash position remains substantial, this step will increase the financial resources we can put to work to take full advantage of the many attractive investment opportunities in PBRT that have become available to us,” said Ernest Bates, MD, CEO and chairman of ASH. “We believe this strategy is the best way to deliver growth and value to our shareholders for the long term.”

The company’s offerings include Gamma Knife radiosurgery services, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and facial pain. The company also offers IGRT and IMRT systems, as well as its Operating Room for the 21st Century concept.