Medical Device Daily
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 Medical Device Daily.
That's even more than most initial public offerings added Sweeney, CardioNet's CEO and chairman, who spoke to MDD from the 56th annual scientific session of the American College of Cardiology (ACC; Washington) in New Orleans.
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 said 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 that it completed its acquisition of PDSHeart (West Palm Beach, Florida), a cardiac event monitoring company. Terms of the acquisition were not disclosed (Medical Device Daily, March 14, 2007).
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:
• Orqis Medical (Lake Forest, California), developer of the Cancion and Exeleras systems to treat congestive heart failure, reported the second closing of its Series D round of financing, raising an additional $12 million. This brings the total funds raised in the Series D round to $34.7 million. The company raised $22.7 million in an earlier closing of the round. Investors in the most recent financing include existing investors and three new investors including Wasatch Advisors and its private equity affiliate, Cross Creek Capital, and the Omega Fund.
"We are pleased with the level of support the company has received from both new and existing investors in this financing," said Ken Charhut, president/CEO of Orqis Medical. "These funds will enable the company to complete the MOMENTUM pivotal trial, submit the PMA application for the percutaneous Cancion system to the FDA, and advance the Exeleras implantable device through first human use."
Almost 5 million Americans — and 14 million people worldwide — suffer from heart failure, a condition in which the heart becomes weakened and cannot pump blood efficiently, Orqis said. Heart failure is caused by coronary artery disease, past myocardial infarctions and other underlying cardiovascular disorders, and it is characterized by shortness of breath, wheezing and edema. Improved therapies are crucial to advancing heart failure treatment, a disease that causes more than one million hospitalizations each year and costs the U.S. healthcare system more than $29 billion a year.
Orqis is a privately held, clinical-stage medical device company developing products intended to prevent or reverse underlying disease progression.
The company's percutaneous Cancion system, for the treatment of acutely decompensated heart failure, is CE marked and is currently under an investigational device exemption investigation in the U.S. in the MOMENTUM pivotal trial. The company's implantable Exeleras system, about the size of an implantable cardiacverter defibrillator, is designed to treat mid- to late-stage chronic heart failure patients.
• International Isotopes (Idaho Falls, Idaho) said it has entered into a private placement with Firebird Global Master Fund II, as well as certain other institutional and private investors.
The placement involves a securities purchase agreement according to which International Isotopes has sold 13,333,331 shares of the company's common stock, par value 1 cent a share, Class C Warrants exercisable for 13,333,331 shares of the company's common stock at 10 cents, and Class D Warrants exercisable for 13,333,331 shares at 11 cents.
Firebird is affiliated with New York-based Firebird Management, which manages more than $3 billion.
International Isotopes manufactures a full range of nuclear medicine calibration and reference standards, high purity fluoride gases, and a variety of cobalt-60 products such as teletherapy sources. The company also provides a wide selection of radioisotopes and radiochemicals for medical devices, calibration, clinical research, life sciences, and industrial applications and provides a host of analytical, measurement, recycling, and processing services on a contract basis to clients.
• Boston Life Sciences (Hopkinton, Massachusetts) said that last week it entered into a convertible promissory note purchase agreement with Robert Gipson, Thomas Gipson and Arthur Koenig, existing stockholders of the company, pursuant to which the company may borrow at any time before Dec. 31, 2007, up to an aggregate principal amount of $15 million.
Boston Life Sciences is engaged in the research and clinical development of diagnostic and therapeutic products for central nervous system (CNS) disorders.