A Medical Device Daily

CardioMEMS (Atlanta), which makes wireless sensing devices for cardiovascular patients, expects to raise about $70.6 million in an initial public offering (IPO) of about 6 million shares planned for next week.

According to its Securities and Exchange Commission filing, an additional 900,000 shares will be offered to the underwriters to cover over-allotments.

The expected proceeds assume the stock will price at $13, the midpoint of the expected range. Net proceeds will increase to $81.5 million if the underwriters exercise their rights to the additional shares.

The company said it plans to use the proceeds to support research and product development, sales and marketing activities, working capital and other corporate purposes.

CardioMEMS said it also may use some proceeds for acquisitions, although it has not agreed to any purchases.

The company initially filed for the IPO in January (Medical Device Daily, Jan. 23, 2007).

The company's EndoSure wireless sensing system has been approved by the FDA since 2005 to measure intrasac pressure during repair of abdominal and thoracic aortic aneurysms. The company says it has a pipeline of cardiovascular products building on the sensing technology.

The FDA clearance does not allow the company to promote the EndoSure system as a replacement for traditional angiography or for measuring pressure after the procedure. The company said it plans on conducting clinical trials to seek FDA clearance for measuring pressure after the procedure.

CardioMEMS said it is adapting the EndoSure system for use in patients with heart failure and in patients with hypertension. The heart failure and hypertension sensors are further miniaturized versions of the EndoSure sensor that use the same materials, manufacturing methods and operational concepts as the EndoSure AAA sensor.

In November, CardioMEMS closed on $22.6 million in venture capital, nearly half coming from Arcapita Ventures.

The company, based at the Georgia Tech Advanced Technology Development Center (Atlanta), reports having raised more than $50 million in venture capital since its 2001 launch.

Endosure noted that it has incurred net losses in each year since its inception in 2000, including losses of $3.3 million in 2003, $5.1 million in 2004, $8.8 million in 2005 and $13.3 million in the nine months ended Sept. 30, 2006.

In 2006, CardioMEMS had losses attributable to common stockholders of $105.9 million and revenue of $3.4 million.

CardioMEMS' major competitors include other companies in the heart failure patient monitoring market, including Medtronic (Minneapolis), St. Jude Medical (St. Paul, Minnesota), Proteus Biomedical (Redwood City, California) and Remon Medical Technologies (Waltham, Massachusetts/Caesarea, Israel).

In November 2005, the company entered into a license and development agreement with Medtronic, as well as a related supply agreement, to adapt the sensor technology for use as a wired pressure sensor system capable of working with Medtronic's implantable devices to address impaired cardiac function, hypertension, or both.

Medtronic is funding the efforts under this joint development program through a series of milestone payments totaling $3 million. CardioMEMS also is entitled to receive royalties on sales of Medtronic devices incorporating its technology, subject to the terms of the license agreement including a cumulative royalty cap of $25 million. Medtronic is a 15.1% stakeholder in the company.

The company has applied to list on the NASDAQ Stock Market under the symbol SENS.

Banc of America Securities is serving as the representative of the underwriters, which are CIBC World Markets, Jefferies & Co. and Pacific Growth Equities.

At the closing of the offering, CardioMEMS said it will have about 22.7 million shares outstanding.

In other financing news:

• StageMark (Pittsburgh), a cell analysis company developing research and diagnostic products and services for autoimmune diseases, reported that it had completed a Series B convertible preferred stock financing totaling about $1.6 million in cash and debt conversion. The financing was led by the BioAdvance Ventures, an early stage venture fund managed by Quaker BioVentures, and the University City Science Center. Previous investors, BlueTree Capital Partners, Innovation Works, Meyer Ventures and the Pittsburgh Life Sciences Greenhouse, also participated in the offering.

Additionally, the company reported the appointments of Edward Erickson as chairman of the board and interim president/CEO, and Lorraine LoPresti, CPA, as VP and CFO.

In conjunction with the financing, the board of directors was expanded to five directors who, in addition to Erickson, are newly elected directors Christopher Starr, VP of investments at the University City Science Center, and Geeta Vemuri, PhD, VP, Quaker BioVentures.

• Lifecore Biomedical (Chaska, Minnesota) reported an exclusive license and development agreement with Cleveland Clinic (Cleveland) to develop and commercialize hyaluronan-based products and related applications.

Lifecore has licensed a patented hyaluronan-based cross-linking technology that can be used for products in aesthetics, orthopedics, ophthalmology and other medical fields. It said that Cleveland Clinic physicians and scientists, under the direction of principal inventor Anthony Calabro, PhD, have performed preliminary animal studies in several applications with encouraging results.

The agreement grants Lifecore an exclusive, worldwide license to use the licensed technology in all fields to develop, make, distribute, market or sublicense over the term, which is the life of the patents. Terms of the licensing agreement were not disclosed.

Given the broad number of applications, Lifecore said that it anticipates that it will sub-license the technology for certain applications while retaining manufacturing rights.

"Lifecore believes this technology platform provides an ideal strategic fit for us to expand in our existing markets, as well as a means to enter new markets," said Dennis Allingham, Lifecore's president/CEO.

Lifecore said that costs associated with this agreement and related development activities in the fourth quarter of fiscal year 2007 are already reflected in the recently issued guidance.