A Medical Device Daily

Paracor Medical (Sunnyvale, California), a private venture-backed company developing device-based treatments for heart failure, reported the closing of $44.35 million in its Series D funding. New investor Aberdare Ventures, with the participation of Montagu Newhall Associates, led the financing round. All of the current institutional investors participated in the financing, including Delphi Ventures, Pequot Ventures, InterWest Partners, Alta Partners, DeNovo Ventures, RWI Ventures, Saratoga Ventures, and Palo Alto Investors. The new funds will primarily be used to support the recently initiated PEERLESS-HF pivotal clinical trial of the company’s HeartNet device, Paracor said.

“Based on published results from previously conducted safety and feasibility trials, and the FDA approved pivotal trial design and protocol, we believe that the probability of a successful outcome in the PEERLESS-HF trial is high,” Hamade said. “Completion of the trial and subsequent approval for marketing by the [FDA] could provide millions of heart failure patients access to a long awaited novel and impactful therapy.”

Paracor’s HeartNet device has been implanted in 50 patients worldwide since early 2004 as part of initial safety and feasibility studies at 15 participating clinical centers. The device is implanted in a minimally invasive surgical procedure averaging just more than 70 minutes. Initial indications are that the device has enabled patients to demonstrate substantial improvements in exercise capacity and quality of life measures, key indicators of patient response in heart failure clinical studies, the company noted. The PEERLESS-HF study, currently underway, is intended to compare the impact of the HeartNet therapy versus an optimally medically managed control group in a randomized trial that is expected to involve up to 30 U. S. clinical sites.

“Completion of the Series D funding will bring us closer to our goal of providing a device-based therapy to attenuate the effects of heart failure for a significant portion of the millions of patients worldwide who have been diagnosed with this chronic and debilitating disease,” said William Mavity, president/CEO of Paracor Medical.

Paracor Medical was formed in 1999 with the goal of developing a family of device-based therapies to attenuate the progression of heart failure for the 5 million U.S. and 22 million global patients who have been diagnosed with the disease. An additional 400,000 to 700,000 heart failure patients are diagnosed each year in the U.S., and the mortality rate is reported to approach 50% within five years of diagnosis. The economic burden associated with heart failure is estimated to approach $30 billion a year in the U.S.

In other financing activity:

• Radiation Therapy Services (Fort Myers, Florida), an operator of radiation therapy centers, said it closed a $50 million expansion of its credit facility by exercising the Term B accordion feature. The participants in the credit facility expansion include members of the senior bank lending group, existing institutional investors and other participating financial institutions.

The company used the proceeds of the Term B expansion to pay down its revolving credit facility, after which the outstanding balances of the Term B financing and revolving credit facility were $148.1 million and $29.2 million, respectively. The current availability under the revolving credit facility is $110.5 million.

The company will be reporting the closing of this credit facility on a Form 8-K filed with the SEC on or before July 6.

• Option Care (Buffalo Grove, Illinois) reported that its 2.25% convertible senior notes due 2024 will be convertible during the fiscal quarter ending Sept. 30 due to a conversion condition having been met. The company issued the convertible notes under an indenture that provides that the notes are convertible, at the option of the holders, during any calendar quarter if the trading price of the company’s common stock for each of 20 or more consecutive trading days in the last 30 consecutive trading days of the preceding calendar quarter exceeds 120% of the conversion price then in effect. This conversion condition was met when the company’s common stock price exceeded $14.35 a share for 20 consecutive trading days in the last 30 trading days in the calendar quarter ended June 30.

On conversion, the company will pay, for each $1,000 principal amount of notes being converted, an amount equal to $1,000 in cash plus, to the extent the conversion value exceeds $1,000 shares of the company’s common stock.

OptionCare offers treatment nationwide to patients in their homes, physician offices or other alternate sites, including ambulatory treatment centers.

Picis (Wakefield, Massachusetts) said that, in light of changes in its strategic and financing plan, it has submitted an application to withdraw its registration statement for its proposed initial public offering (IPO) of common stock.

The company reported filing a registration statement with the Securities and Exchange Commission for a proposed IPO of its common stock in August 2006 (Medical Device Daily, Aug. 21, 2006). At the time it said it anticipated raising as much as $86.25 million in the IPO.

“We are in the middle of another very successful year, and our business remains solidly on track,” said Todd Cozzens, Picis president/CEO. “However, we are currently pursuing certain time-sensitive market opportunities that we believe will be advantageous to our shareholders, customers and employees. As a result, we have re-evaluated the timing of our initial public offering.”

Picis is a provider of healthcare information technology solutions designed to transform the delivery of patient care in high-acuity areas of the hospital, including the emergency department, operating and recovery rooms and intensive care units.