A Medical Device Daily
Bioconnect Systems (Ambler, Pennsylvania) on Friday reported raising $8 million in a Series A financing.
Bioconnect says that its initial product, the Optiflow, enables surgeons to create precise connections throughout the body. The system is a proprietary anastomotic connector addressing the need for improved access in dialysis patients.
The company notes that vascular access is the "Achilles' heel" of hemodialysis, contributing to mortality rates of 68% at five years, and that about one-third of surgically created access sites never become functional, and another third fail within the first year.
Adam Dakin, Bioconnect co-founder and CEO, said, "This capital enables us to accelerate development of our first product and to license or acquire complementary technology targeting dialysis access."
The financing was led by Cardinal Partners (Princeton, New Jersey) and Fidelity Biosciences (Cambridge, Massachusetts). Charles Hadley, general partner at Cardinal Partners, and Robert Weisskoff, a partner at Fidelity Biosciences, will join Bioconnect's board, as will co-founder Mike Dugery.
Hadley said, "Government initiatives such as Fistula First have raised awareness of the critical clinical need for improving dialysis access. We were attracted by the company's strategy to develop and aggregate products targeting the wide range of access needs in this large and highly underserved patient population."
ReGen Biologics (Franklin Lakes, New Jersey) reported completing an additional $2.7 million private placement.
It said that combined with previously placements (December 2006/March 2007) the funding provides the company about $12.7 million in equity and about $12.7 million more upon exercise of options exercisable upon FDA 510(k) clearance of the company's collagen scaffold product.
The placement was led by Ivy Capital Partners.
The company sold 64,286 shares of restricted Series D convertible preferred stock at $42 a share, for proceeds of about $2.7 million, and it issued five-year warrants equal to 30% of the purchased shares for 19,286 shares of restricted Series D convertible preferred stock at $63 a share, plus options to purchase the number of preferred shares purchased at closing, exercisable at $42 a share within 15 days of FDA clearance of the company's collagen scaffold device.
Once converted to common shares on a one preferred to 100 common share ratio, the pricing per share of $42 for the purchase and option exercise, and the warrant exercise price of $63, convert to 42 cents and 63 cents respectively.
Russell Warren, MD, co-founder of Ivy and surgeon-in-chief emeritus of Hospital for Special Surgery and attending orthopedic surgeon and professor of orthopedics at the Weill Medical College of Cornell University (both New York), said, "We are enthusiastic about the potential benefit to surgeons and patients from the ReGen collagen scaffold device for the treatment of meniscus injury."
ReGen manufactures tissue growth and repair products. Its first approved product using its collagen scaffold technology is the CMI, a meniscus application cleared for sale in Europe and marketed through ReGen's European subsidiary, ReGen Biologics AG (Switzerland).
In other financing news:
• IASIS Healthcare (Franklin, Tennessee) has signed a letter with a syndicate of lenders led by Bank of America and Citigroup to refinance its existing credit facilities, increase borrowing capacity and fund a dividend to equity holders of its parent company.
The financing includes $829 million in senior secured credit facilities and $300 million in holdings senior paid-in-kind loans. The transaction is expected to close later this month.
The $829 million senior secured credit facilities include a senior secured term loan of $439 million; a senior secured delayed draw term loan of $150 million; a senior secured revolving credit facility of $200 million; and a senior secured synthetic letter of credit facility of $40 million.
The company intends to use the funds received to fund capital projects, including completion of its Mountain Vista Medical Center (Mesa, Arizona), to open in June, and general corporate purposes.
The $300 million holdings senior PIK Loans will be borrowed by IASIS Healthcare Co., parent company of IASIS, to fund a one-time cash dividend to equity holders of IASIS Healthcare Corporation.
David White, CEO and chairman of IASIS, said, "We believe refinancing our credit facilities and expanding our borrowing capacity provide greater flexibility in implementing our business strategies."
IASIS is owner/operator of medium-sized acute-care hospitals in high-growth urban and suburban markets.
• Ithaka Acquisition (Miami, Florida) reported that Paul Brooke, its CEO and chairman, and Eric Hecht, its president/CFO have agreed to purchase 200,000 shares of common stock of Ithaka to be split equally between Brooke and Hecht. Ithaka and Alsius (Irvine, California) have entered into a merger agreement for Alsius to become a subsidiary of Ithaka following approval by Ithaka's stockholders. That deal was first disclosed last year (Medical Device Daily, Oct. 5, 2006).
Ithaka was formed in 2005 to effect a business combination with an operating business in the healthcare industry. As of Dec. 31, 2006, Ithaka held more than $49.3 million in a trust account which will be released to Ithaka upon consummation of its merger.
Alsius develops products to control patient temperature in critical care settings.