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.
The round was led by new investor Aberdare Ventures, with the participation of Montagu Newhall Associates. All of the current institutional investors participated in the financing, including Delphi Ventures, Pequot Ventures, InterWest Partners, Alta Partners, DeNovo 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’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 over 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 said.
The PEERLESS-HF study, currently underway, is intended to compare the impact of the HeartNet therapy vs. an optimally medically managed control group in a randomized trial that is expected to involve up to 30 U. S. clinical sites.
In conjunction with the financing, Sami Hamade of Aberdare will join the Paracor Medical board of directors.
“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.
Paracor 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 per year in the U.S. alone.
HealthpointCapital (New York) reported the closing of HealthpointCapital Partners II, L.P., at $420 million, representing an increase of more than 2.5 times its prior fund, HealthpointCapital Partners, L.P., which closed in 2004 at $160 million.
HealthpointCapital is a values-driven, research-based private equity firm exclusively focused on the musculoskeletal sector — specifically orthopedics and dental — the fastest growing segment within the medical device field. HealthpointCapital has $640 million of institutional capital under management.
HealthpointCapital reports that it has completed 12 investments, creating five platform companies in the orthopedic and dental industries since 2004. All investments have been made pursuant to the firm’s focus on making investments which capitalize on the most compelling trends in the musculoskeletal industry, in which the firm is able to purchase a controlling or significant equity stake in growth businesses.
To date, more than $325 million in equity capital has been invested.
In other financing news:
• ONI Medical Systems (Wilmington, Massachusetts), developer of an open, high-field extremity MRI system, reported a $12.5 million capital infusion led by Ziegler Meditech Equity Partners. The company said it intends to expand its product development and marketing efforts within the Specialty MRI imaging market.
The transaction also included participation from existing investors Galen Partners and Ivy Capital Partners.
“This additional funding, combined with our team of industry experts and top designers, will allow us to further penetrate the growing needs of both our clinicians and healthcare providers,” said Peter Pellerito, CEO of ONI.
ONI manufactures the MSK Extreme with v-SPEC, which the company said combines superior, high-field image quality in a compact, patient-friendly unit. Unlike whole-body MRI units, the MSK Extreme is designed to enable patients to have a comfortable testing experience where just the impacted extremity is enclosed by the magnet.
• Emeritus (Seattle), a national provider of assisted living and related services to senior citizens, reported the public offering of 11 million shares of its common stock has been priced at $31 per share. The offering includes 500,000 shares of common stock to be offered by selling shareholders Saratoga Partners IV, L.P. and its affiliates.
Proceeds to the company before expenses are about $325.5 million. Emeritus has also granted the underwriters a 30-day option to purchase up to 1.65 million additional shares of common stock to cover any over-allotments.
UBS Securities is acting as the sole book-running manager of the offering. Credit Suisse Securities (USA), Cohen & Steers Capital Advisors, and Stifel, Nicolaus & Co. acted as co-managers.
Emeritus is a national provider of assisted living and Alzheimer’s and related dementia care services to seniors. It currently operates 206 communities representing capacity for about 20,000 residents in 34 states.
• CIT Group (New York), a global provider of commercial and consumer finance solutions, and Care Investment Trust (CIT; New York), a real estate investment and finance company, reported the closing of an IPO of 15 million shares of Care Investment Trust at $15 a common share.
CIT also granted the underwriters a 30-day option to purchase an additional 2.25 million common shares from the company to cover any over-allotments. Care Investment Trust is managed and advised by CIT Healthcare, a unit of CIT.
The proceeds of the offering, after deducting underwriting discounts, commissions and expenses, will be about $209.8 million. Care Investment Trust issued about $78.8 million in common shares and used roughly $204.3 million of the net proceeds of the offering to purchase a portfolio of healthcare-related mortgage assets from CIT Real Estate Holding Corp., a wholly owned subsidiary of CIT.
The shares of Care Investment Trust began trading last Friday on the New York Stock Exchange under the symbol CRE.
Credit Suisse and Merrill Lynch & Co. are serving as joint book-running managers. Banc of America Securities, Bear Stearns & Co., UBS Investment Bank, Wachovia Securities, Piper Jaffray, RBC Capital Markets and Stifel Nicolaus are acting as co-managers.