A Medical Device Daily

SonoSite (Bothell, Washington), a maker of hand-carried ultrasound devices, reported its intention to offer, subject to market and other conditions, $150 million aggregate principal amount of convertible senior notes due 2014.

In certain circumstances, the notes will be convertible into cash up to the principal amount. Any conversion value above the principal amount will be settled in shares of SonoSite's common stock. The interest rate, conversion rate and other terms of the notes will be determined by negotiations between SonoSite and the underwriters of the notes.

The company expects to grant to the underwriters a 30-day option to purchase up to $22.5 million aggregate principal amount of additional notes to cover any overallotments.

The company 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.

In connection with the offering, SonoSite said it may use a portion of the proceeds of the offering to enter into a convertible note hedge transaction with an affiliate of one of the underwriters, which would cover about 67% of any notes converted, and would be intended to reduce the potential dilution to SonoSite's common stockholders upon any such conversion. The company may also enter into a warrant transaction with the option counterparty concurrently with the convertible note hedge transaction.

JPMorgan is the sole book running manager for the offering and Piper Jaffray and Savvian are serving as co-managers for the offering.

Light Sciences Oncology (LSO; Seattle) reported the closing of its latest round of funding, $30 million of its Series B preferred Stock. LSO is developing Light Infusion Therapy (Litx) to provide safer and more effective treatment to cancer patients.

The Series B preferred stock financing is the second round of institutional financing for LSO. The company raised $67 million in its first round of financing completed in December 2005 (Medical Device Daily, Dec. 15, 2005).

LSO said it will use the funds to continue development of Litx, including two ongoing pivotal Phase III clinical trials in patients with hepatocellular carcinoma, initiated in August 2006, and colorectal cancer metastatic to the liver, initiated in July 2007. It will also use the funds to continue a Phase II trial of Litx in patients with brain cancer and to initiate a Phase I study in patients with benign prostatic hyperplasia.

In other financing news:

• Neoprobe (Dublin, Ohio), a developer of oncology and cardiovascular surgical and diagnostic products, reported that its President/CEO, David Bupp, and certain members of his family last week purchased a $1 million convertible note and warrants of the company.

The note is convertible into common stock of the company at 31 cents, a 25% premium to the average closing market price of the company's common stock for the 5 days preceding the July 3, 2007 closing of the transaction. The note bears interest at 10% per annum during its 1-year term and is repayable in whole or in part by the company with no penalty. In addition, the company issued the purchasers 500,000 warrants to purchase common stock of the company, also exercisable at 31 cents per share over a period of 5 years.

Neoprobe currently markets the neo2000 line of gamma detection systems that are widely used by cancer surgeons and is commercializing the Quantix® line of blood flow measurement products developed by its subsidiary, Cardiosonix .

• Blue Mountain Hospital (Blanding, Utah) reported that it has secured an additional $2.1 million debt financing from U.S. Department of Agriculture Rural Development . The funds will be used to construct, equip, and operate a new critical access hospital in Blanding, Utah.

The remainder of the $23.1 million was raised through a combination of debt, private equity, lines of credit and private donations.

"Blue Mountain Hospital is the culmination of a historic partnership between the Ute Mountain Ute Tribe, Utah Navajo Health Systems and the city of Blanding to service the healthcare needs of all the residents of the Four Corners region who have had limited access to or simply done without adequate healthcare for far too long," said Manuel Morgan, chairman of Utah Navajo Health System. "Our process will serve as the template for similar communities that seek to develop or update their healthcare infrastructure."

Blue Mountain Hospital is a not-for-profit organization established to construct and operate a 45,000 square foot critical access hospital in Blanding. The 11-bed hospital will have an operating suite containing two operating rooms, emergency department, three labor delivery rooms, state-of-the-art diagnostic center, renal dialysis, primary care clinics, pharmacy, and physical therapy.