A Medical Device Daily

Delcath Systems (New York) reported completing the sale of about 3.8 million shares of its common stock, plus warrants to purchase 1.9 million shares of common stock, with an exercise price of $4.53 a share.

Selected institutional investors, led by Winslow Management of Boston, purchased units via a registered direct offering. Each unit consisted of one share of common stock and one warrant to purchase 0.5 shares of common stock, and was priced at $3.70 a unit. Gross proceeds were about $14.2 million.

The company said it will use the net proceeds to fund advancement of its Phase II and Phase III clinical trials currently underway, to fund new R&D activities, and for general corporate purposes. The company said that with these proceeds it will have the capital to fund operations through the completion of its pivotal Phase III clinical trial.

The financing “allows us to continue to expand enrollment in our pivotal Phase III trial as we look towards regulatory approval and the commercialization of our core chemotherapy delivery platform,” said Richard Taney, CEO of Delcath. “In addition, it gives us an improved capital position to pursue strategic opportunities for our company in the pharmaceutical and licensing areas.”

Delcath has 25.2 million shares outstanding, 950,000 options, and about 2.5 million warrants. Including the proceeds from this offering, Delcath said it has about $20 million in cash and no debt.

Assuming exercise of all currently outstanding options and warrants, the company would have 28.6 million shares outstanding and would receive another $15 million in cash proceeds, it said.

Canaccord Adams and ThinkEquity Partners acted as placement agents for the offering.

Delcath develops percutaneous perfusion technology for organ- or region-specific delivery of therapeutic and chemotherapeutic agents.

Nephros (New York) reported that it has entered into subscription agreements in which Lambda Investors, GPC 76, Lewis P. Schneider and Enso Global Equities Partnership will purchase about $12.7 million of the company’s Series A 10% secured convertible notes, due 2008.

With the subscription agreements, Nephros entered into an exchange agreement with Southpaw Credit Opportunity Master Fund, 3V Capital Master Fund, Distressed/High Yield Trading Opportunities, Kudu Partners, and LJHS, each agreeing to exchange the principal and accrued but unpaid interest under the outstanding $5.2 million in initial principal amount of the 6% secured convertible notes, due 2012, of Nephros, for new Series B 10% secured convertible notes due 2008 valued at $5.3 million.

The company also reported that a majority of stockholders approved an amendment to its fourth amended and restated certificate of incorporation to increase its authorized shares of common stock to 60 million.

When the approval becomes effective, all principal and accrued but unpaid interest under the new notes will convert to Nephros common stock at a per-share price equal to $0.706. In the case of the Series A notes, Class D warrants also will be issued for the purchase of common shares in the amount of 50% of the number of new shares issued at conversion, at 90 cents a common share.

In conjunction with the closing of the financing, William Fox resigned as executive chairman and director of the board, and Judy Slotkin, W. Townsend Ziebold Jr, and Howard Davis resigned as directors. Paul Mieyal and Arthur Amron were appointed company director. Mieyal and Amron are employed by Wexford Capital, an investment advisory firm that manages Lambda.

Nephros develops products for treating end-stage renal disease. The company also markets a line of water filtration products.

In other financing news:

• Alphatec Holdings (Carlsbad, California) reported that Canaccord Adams, the underwriter of its recent public offering, exercised in full its option to buy up to another 1.2 million shares of common stock.

On Friday, the company priced its public offering of 8.8 million shares at $3.45 each. The company estimated net proceeds of about $25.8 million.

The company, which makes products for the surgical treatment of spine disorders, disclosed its offering earlier this month (Medical Device Daily, Sept. 13, 2007).

Alphatec’s initial public offering in June 2006 was, perhaps one of the larger disappointments of that year. The company had filed a registration statement to raise up to $149.5 million but settled on a $9-a-share valuation which netted it about $83.1 million after the exercise of over-allotments.

The company’s product portfolio and pipeline includes a variety of spinal implant products and systems focused on solutions addressing the cervical, thoracolumbar, intervertebral, minimally invasive, motion preservation, and allograft markets.

• Cardiosolutions (Stoughton, Massachusetts) reported that it has closed a $7 million Series A convertible preferred stock financing led by BioVentures Investors.

Cardiosolutions is developing a minimally invasive system for repair of a regurgitant mitral valve. The company said the financing will fund pilot human trials of the technology, expected in 2008.

Mitral regurgitation (MR) is the most common type of heart valve insufficiency in which the valve that separates the atrium from the ventricle does not close properly. The company said that debilitating chronic MR affects 6% of women and 3% of men and normally requires open heart surgery for restoration of valve function.

“If successful, our system can provide an interim option for patients who are too ill for open heart surgery and ultimately, the system may provide an effective preventative therapy for patients with very early stages of mitral regurgitation.” said Jon Wilson, COO of Cardiosolutions.

Cardiosolutions was incubated and founded in 2006 by STD Med (Stoughton, Massachusetts), a developer of medical technologies.