A Medical Device Daily
Galen Partners (Stamford, Connecticut), a private equity firm focused solely on the healthcare industry, reported the close of its fifth fund, Galen Partners V, with $250 million in limited partner commitments.
Consistent with its earlier funds, Galen Partners V will continue to focus on investments in healthcare information technology/outsourcing, medical devices and specialty pharmaceutical companies, the firm said.
The fund provides expansion capital to healthcare-related companies with established revenue that have the potential for rapid growth and market leadership. The partnership seeks opportunities to actively participate as a lead investor in which it can provide between $10 million to $30 million of equity capital.
"Since our founding in 1990, Galen has pursued a differentiated investment strategy that has proven to be a formula for generating superior, risk-adjusted returns in healthcare private equity," said David Jahns, managing director and partner of Galen.
Galen Partners V will be managed by a team of eight investment professionals. Members include managing directors, David Jahns, Zubeen Shroff, Toby Wesson and John Wilkerson, as well as David Azad, Stacey Bauer, Andrew Isaacson and Michael Koby.
The firm has made investments in more than 60 companies since 1990. In its most recent fund, Galen was the lead or co-lead investor and served on the board of directors in 100% of its investments. With the new fund, Galen Partners has nearly $1 billion under management.
SurModics (Eden Prairie, Minnesota) and Paragon Intellectual Properties (Charleston, West Virginia) said they have signed a license agreement under which the companies will collaborate on the development of a stent system for the treatment of coronary artery disease.
The stent system, which incorporates SurModics' Finale Prohealing coating technology and Paragon's low-profile coronary stent system, is designed to address late stent thrombosis, a serious complication occurring in a small percentage of coronary stent cases.
In addition, SurModics reported that it has made a $3.5 million equity investment in Paragon and its newly formed subsidiary, Apollo Therapeutics . SurModics has agreed to invest an additional $2.5 million upon successful completion of specified development milestones.
"We firmly believe that SurModics' Finale prohealing coating technology will speed recovery of the normal vessel architecture and inner cell lining, with the potential to not only eliminate late thrombosis but also reduce restenosis," said Mark Bates, MD, CEO of Paragon and Apollo. "By combining this innovative technology with Paragon's low-profile stent system, we move closer to the panacea of a highly deliverable coronary stent with a biologic coating that has the efficacy of a drug eluting stent without the long-term concern of late stent thrombosis."
SurModics' Finale prohealing coating technology incorporates extracellular matrix (ECM) proteins designed to improve and accelerate tissue healing of implantable medical devices through the body's own healing mechanisms.
Apollo's coronary stent utilizes Paragon's Inversion Point technology, resulting in a stent with a significantly lower profile when mounted on the balloon of a delivery catheter, improving deliverability and ease of use, the company said.
In other financing news:
• SonoSite (Bothell, Washington) reported that it has the upped the amount of its previously disclosed offering of convertible senior notes due 2014 from $150 million to $200 million (Medical Device Daily, July 11, 2007).
The notes will pay interest semiannually at a rate of 3.75% per annum. In certain circumstances, the notes will be convertible based on an initial conversion rate of 26.1792 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of about $38.20 per share. Conversions will be settled in cash up to the principal amount of the notes, with any conversion value above the principal amount settled in shares of SonoSite's common stock.
Holders of the notes may require SonoSite to repurchase the notes for cash equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest upon the occurrence of a fundamental change. SonoSite has granted the underwriters a 30-day option to purchase up to $25 million in aggregate principal amount of additional notes to cover any overallotments.
The company, a maker of hand-carried ultrasound devices, said it intends to use the net proceeds from this offering to fund acquisitions from time to time of one or more complementary businesses or product lines. Any net proceeds that are not used for acquisitions will be used for general corporate purposes, which may include repayment of debt, capital expenditures, investments in its subsidiaries or as additions to working capital. Net proceeds may be temporarily invested prior to use.
• Isolagen (Exton, Pennsylvania) reported that it has filed registration statements with the Securities and Exchange Commission (SEC) relating to a proposed exchange offer involving holders of its currently outstanding 3.5% subordinated convertible notes due 2024 and a proposed offer to the public of an additional $30 million in principal amount, of new senior convertible notes due 2024.
In the proposed exchange offer, Isolagen said it intends to offer up to $90 million aggregate principal amount of its new senior convertible notes due 2024 for up to the entire $90 million aggregate principal amount of its currently outstanding subordinated convertible notes due 2024. In addition, the company said it also intends to offer to the public up to an additional $30 million in principal amount, of the new senior convertible notes due 2024.
In the registration statements, Isolagen said it believes the exchange and new money offerings will reform the company's capital structure in order to better execute its business strategy.
Thomas Weisel Partners is serving as the dealer manager for the exchange offer and the placement agent for the new money offering.
Isolagen is an aesthetic and therapeutic company. Its technology platform includes the Isolagen Process, a cell processing system for skin and tissue rejuvenation which is currently in clinical development for a broad range of applications including facial rejuvenation and wrinkles, acne scars, burn scars and periodontal disease. Isolagen also commercializes a line of skincare systems through its majority-owned subsidiary, Agera Laboratories (Wilmington, Delaware).