A Medical Device Daily

Alphatec Holdings (Carlsbad, California) reported that it plans to offer 8 million shares of its common stock in a public offering.

The company, which makes products for the surgical treatment of spine disorders, said it expects to give the underwriters a 30-day option to buy up to an additional 1.2 million shares of stock to cover any over-allotments. Alphatec has about 34 million shares outstanding.

The company’s stock has traded in a 52-week range of $2.77 to $6.75 and closed Tuesday at $3.52 a share, giving the offering an approximate value of $25.8 million, or about $29.7 million if the underwriter exercises its option to purchase additional shares in full

The company said it intends to use the net proceeds of this offering for general corporate purposes and working capital, including to obtain the right to use products or intellectual property that are complementary to its business; to acquire businesses, products or intellectual property that are complementary to its business; to support its research and development efforts; and to fund the clearance or approval and subsequent commercialization of its near-term product candidates.

Canaccord Adams will serve as the sole book runner of the public offering.

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 reported yesterday that it has entered into an exclusive worldwide license with the Stout Medical Group (Perkasie, Pennsylvania) for a vertebroplasty technology system that is focused on providing a solution for vertebral compression fracture indications (see Deals roundup, p.3).

Alphatec’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.

Vital Therapies (San Diego) reported the completion of a $28.1 million Series C financing. The company said the new capital will support continued developed of ELAD (Extracorporeal Liver Assist Device), its human cell-based artificial liver.

The financing was led by Versant Ventures which was joined by new investors Delphi Ventures, HBM BioMed China and DFJ DragonFund China. Also participating were existing investors MedVenture Associates, Valley Ventures, Toucan Capital and Heights Capital.

Ross Jaffe, MD, of Versant Ventures has joined VTI’s board of directors, representing the Series C investors.

According to the company, pivotal human trials at two hospitals in Beijing have confirmed ELAD is a promising therapy for serious, acute liver failure. To date, only liver transplantation has been shown to increase survival. However, demand for liver transplantation far exceeds the supply of donor livers, creating a need for an alternative life saving therapy such as ELAD. In China alone, an estimated 160 million people suffer from chronic liver infections such as Hepatitis B and C, according to the company.

The ELAD system is designed to provide important metabolic support for patients with liver failure, enabling a bridge-to-transplant or recovery, depending on the type and severity of liver disease. The system consists of four cartridges containing cells that function like a normal human liver. The cells metabolize toxins and remove waste products while delivering essential proteins into the plasma. These cartridges are incorporated into a blood pumping system at the patient’s bedside and enable continuous treatment for up to 12 days. According to the company, the key to ELAD’s performance is a human hepatocyte cell line that can be grown, stored and shipped worldwide.

In other financing news:

OpGen (Madison, Wisconsin) said that it has raised $23.6 million in equity financing. The round was led by CHL Medical Partners, Highland Capital Partners and Versant Ventures, with previous investor Mason Wells also participating.

In conjunction with the financing, CHL’s Ron Lennox will become chairman of the board of directors and will also be joined on the board by Corey Mulloy and Bijan Salehizadeh from Highland, and Versant’s Brian Atwood.

OpGen said it delivers capabilities to identify microorganisms using a method to analyze DNA extracted directly from the microbial cells. “Optical mapping” has been used by organizations worldwide for comparative genomic analysis of a range of organisms of importance to human health, including tracing the origins of food-poisoning cases such as the recent outbreak linked to contaminated spinach. With this new financing the company said it will develop commercial instrumentation systems for the clinical microbiology marketplace.

“Currently, clinical microbiology laboratories depend on isolating and growing microorganisms from clinical samples,” stated Ron Lennox. “This is a lengthy process and provides only a simple taxonomic identification. The results are rarely timely enough to influence choice of therapy and can lead to excessive use of expensive broad-spectrum antibiotics. OpGen’s new system will provide data capable of identifying bacteria down to the strain level, within a single shift.”

The company said the applications of the new commercial optical mapping systems include clinical microbial analysis, forensic microbiology and the development of new molecular diagnostic products.

• Sermo (Cambridge, Massachusetts) developer of an online physician community, reported that it has secured $26.7 million in Series C financing, led by investor Legg Mason Capital Management who was joined by Allen & Co. Other investors in the company include Longworth Venture Partners and SoftBank Capital.

With this latest investment, Sermo said it will accelerate its development efforts to better handle the influx of new content into the community and continue to improve the site experience for physicians. It will also focus on creating new opportunities to give physicians a greater voice in shaping the future of healthcare. The company recently entered into agreements with both the American Medical Association (Washington) and the FDA.

• AWT (Somerset, New Jersey), a distributor of medical equipment to the healthcare industry, reported that it has signed a definitive agreement with Empire Equity Consultants for institutional working capital equity financing of up to $750,000. Terms were not disclosed.

This financing, the company said, will be used not only for general administrative purposes, but also as part of the companies’ acquisition terms for certain acquisition targets.