Medical Device Daily Executive Editor

Devax (Lake Forest, California) has filed a registration statement with the Securities and Exchange Commission relating to a proposed initial public offering of shares of its common stock.

The amount of the shares to be offered and the pricing range has not been determined.

Devax is a medical device company focused on the development and commercialization of novel drug-eluting stent (DES) systems for the treatment of bifurcation lesions, or vascular disease occurring at the division of one artery into two. It estimates that treatment of these bifurcations results in about 1 million procedures annually, a worldwide market opportunity of $2 billion annually, based on the company's pricing assumptions.

Its three primary products are:

  • The Axxess stent is designed to treat epicardial arteries. It reports having treated 330 patients and now seeking FDA approval of an investigational device exemption to begin a clinical trial in the U.S.
  • The Axxess LM stent is designed to treat left main coronary artery bifurcated lesions. It says it has treated 30 patients with the stent "with favorable clinical outcomes."
  • A third product, currently in prototype phase, targets carotid bifurcation lesions.

The company has no product approvals and as of March 31 reports an accumulated deficit of $39.4 million. Among its listed risks, the company says it relies on another company, Biosensors International (Singapore), "over whom we have little or no control, for the supply of the drug coating we use on our stents and for submitting regulatory documentation to regulatory authorities for the use of this drug coating on stents." It licenses coating materials from SurModics (Eden Prairie, Minnesota).

Bear, Stearns & Co. and Thomas Weisel Partners will act as joint book-running managers for the offering with CIBC World Markets and A.G. Edwards acting as co-managers.

TomoTherapy (Madison, Wisconsin) has filed for an IPO of 10.9 million shares, with the price range of $15-$17 a share.

The company is the developer of the Hi-Art System, a radiation deliver system designed to change the intensity of the radiation beam so that it adapts to the shape of the tumor. Using a computerized tomography scan, the system focuses on killing cancer cells, TomoTherapy says, with "sub-millimeter accuracy" to kill cancer cells while sparing healthy tissue. As of December 31, 2006, it reported an installed base of 108 Hi Art systems worldwide.

The company said the funds will be used to expand marketing, support continued R&D, expand international service and support and for general corporate purposes.

TomoTherapy was founded in 1997 by medical physicist Thomas "Rock" Mackie and mathematician and software engineer Paul Reckwerdt. The company works with the University of Wisconsin (Madison) in researching its technology.

Among the risks the company lists is that it licenses its technology from the Wisconsin Alumni Research Foundation (WARF) and that WARF has the right to unilaterally terminate the agreement if Tomotherapy is not able to pay royalties or satisfy other obligations related to use of the technology.

The company's revenue increased from $75.8 million for the year ended Dec. 31, 2005 to $156.1 million for the year ended Dec, 31, 2006, an increase of 106.1%. Its gross profit increased from 33.9% to 34.2%.

Proposed ticker symbol on the Nasdaq TTPY. Lead managers are Merrill Lynch, Piper Jaffray and Thomas Weisel.

TomoTherapy opened its European headquarters in Belgium in 2006.

In other financing activity:

• Novadaq Technologies (Toronto), a developer of imaging systems and image-guided therapies for the operating room, has priced its previously reported private placement of 2 million common shares at $7.50 a share, for gross proceeds of about $15 million.

Closing of the offering is expected on or about May 23. The company said that net proceeds will be used to fund R&D, for sales and marketing and recent acquisitions. These include acquiring the exclusive distribution rights to the Heart Laser System from PLC Medical Systems (Franklin, Massachusetts) for transmyocardial revascularization in the U.S. (Medical Device Daily, March 22, 2007), and acquiring certain business assets of Xillix Technologies (Richmond, British Columbia) (MDD, May 7, 2007).
The shares will be offered through a syndicate of agents, led by RBC Dominion Securities and including Blackmont Capital and Versant Partners

• Cytyc (Marlborough, Massachusetts) said that through Cytyc Development, it has made a venture investment in Combinent BioMedical Systems (Boston), an early-stage company developing a vaginal implant for delivering a combination of drugs, currently given orally and intravenously. It said the goal of the company's R&D is to improve treatment of a number of women's health diseases with large markets and high unmet needs. The amount of the funding was not disclosed.

Robert Langer, PhD, professor of chemical engineering at Massachusetts Institute of Technology (MIT; Boston), and William Crowley Jr, MD, chief of the Reproductive Endocrine Unit of the Department of Medicine at Massachusetts General Hospital (Boston), are the founders of Combinent. Langer has more than 550 issued or pending patents worldwide, with many licensed or sublicensed to pharma, biotech and medical device companies.

Crowley is a researcher focused on gonadotropin-releasing hormone agonist for the treatment of precocious puberty in children and endocrine disorders in women.

Cytyc said that the financing will be used mainly to fund clinical trials.

Cytyc joins VIMAC Ventures and Commons Capital in this financing. John McDonough, president of Cytyc Development, will become a member of Combinent's board, which will include Langer and Sena Biswas from VIMAC Ventures.

McDonough said, "We believe we are financing a unique delivery platform that will yield multiple products for the treatment of serious reproductive, endocrine, and metabolic diseases affecting women."

Cytyc manufactures diagnostic and surgical products with a focus on women's health.

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