CardioNet (San Diego) has closed on $110 million in private financing, making it one of the largest private placements of equity bridge financing in the med-tech sector since January 2000, James Sweeney told Diagnostics & Imaging Week.
That’s even more than most initial public offerings, added Sweeney, CardioNet’s CEO and chairman, speaking to D&IW from the 56th annual scientific session of the American College of Cardiology (ACC; Washington) in New Orleans earlier this week.
So how did CardioNet, a provider of wireless mobile cardiac monitoring technology, raise such a noteworthy round of funding?
“This significant round of funding clearly demonstrates the strong market support that exists for the proprietary CardioNet technology, the highly competitive business model of the company and the future of wireless telemedicine. We expect to be able to leverage our solid financial position to further solidify our leading position in the provision of our services to physicians and their patients nationwide,” Sweeney said.
CitiGroup Global Markets, served as the lead placement agent and Sun Trust Robinson Humphrey served as co-placement agent.
CardioNet said it has raised close to $200 million in private debt and equity over the past seven years to develop its technology platform focused on wireless solutions to a broad array of diseases.
Sweeney told D&IW that the company plans to use the proceeds of this financing to invest in infrastructure so that it can expand from 23 to 49 states in the U.S., and to invest in developing new applications for its technology.
This week at ACC, CardioNet is demonstrating its third generation device and touting a study published this month in the Journal of Cardiovascular Electrophysiology that found CardioNet’s Mobile Cardiac Outpatient Telemetry (MCOT) technology nearly three times more effective at detecting and diagnosing clinically significant arrhythmias compared to existing mobile cardiac monitoring devices typically prescribed by physicians. Cardiac arrhythmia is one of the most common, yet potentially dangerous, heart conditions affecting more than 4 million Americans, accounting for more than 780,000 hospitalizations and 500,000 deaths each year, according to the American Heart Association (Dallas).
Earlier this month CardioNet reported completing its acquisition of PDSHeart (West Palm Beach, Florida), a cardiac event monitoring company. Terms of the acquisition were not disclosed.
CardioNet said it has invested more than $84 million and seven years developing its medical devices and 24-hour monitoring service center. Of that amount, it has invested more than $40 million into developing its integrated patient-monitoring platform that incorporates a wireless data transmission network, internally developed software, and FDA-cleared algorithms.
In other financing news:
• Predictive medicine company PreMD (Toronto) reported that it has entered into an agreement with Midsummer Investment for a private placement of about 2.9 million units at a price of C$1.33 per unit ($1.14), each unit consisting of one common share and one-half of one common share purchase warrant, for gross proceeds of up to C$3.89 million. Each whole warrant shall be exercisable at a price of C$1.66 per share for a period of three years from the closing date.
Several additional existing institutional investors have also agreed to participate. Closing of the placement is subject to certain conditions including approval from the American Stock Exchange.
PreMD’s cardiovascular products are branded as PREVU(x) Skin Sterol Test.
Dr. Brent Norton, president/CEO of PreMD, said, “Following our reacquiring the rights to the PREVU technology, we have been actively evaluating multiple sales and distribution options including having discussions with potential partners. In addition, we are poised to better capture the potential of the PREVU product line, including the use of PREVU(x)LT for the insurance industry, as well as the possibility for an expanded claim for PREVU(x)POC based on our PASA data, which we expected to be reported shortly.”
The company’s cancer tests include ColorectAlert, LungAlert and a breast cancer test.
• GlucoLight (Bethlehem, Pennsylvania), a development-stage company formed in 2003 to focus on blood glucose monitoring, reported closing a $2 million first tranche of “C” round financing, with the second tranche expected to close in late 2Q07.
The financing was led by venture fund Matignon Technologies (Paris). Ben Franklin Technology Partners of Northeastern Pennsylvania, a state-funded economic development organization that links early-stage companies with funding and other resources, also participated in the round. Other individual investors included current shareholders and new investors.
GlucoLight said the funding will enable it to complete development of an optical, continuous glucose monitor (OCGM), a non-invasive monitor designed for the acute care environment. The money will help fund the clinical studies leading up to an expected pivotal trial in 2008, GlucoLight said.
Ray Krauss, CEO of GlucoLight, said, “We have been able to go from concept to working prototype, including initial clinical trials in the field of intended use, on an initial capital raise of $7 million. We expect the next round of financing to bring us through the clinical trials process.”
Using optical coherence tomography (OCT), GlucoLight measures blood glucose levels through an anatomical area in the skin that shows physiological changes correlated to changes in blood glucose. The monitor displays real time glucose measurements with an initial single point calibration.
Krauss said, “We have developed and demonstrated a device that will provide physicians and health care workers with a product that not only provides continuous data, but will help offset labor and supply costs for hospitals. In recent trials, we have been extremely pleased with the device’s accuracy.
“Based on compelling data that reinforces the importance of tight glycemic control in the acute care environment, coupled with the worldwide diabetes epidemic, we estimate the size of our near-term addressable market to be at least $500 million.”