A Medical Device Daily
Abingworth Management, a life sciences investment group, reported that it has led a $50 million Series A private debt and equity financing in Magellan Biosciences (Chelmsford, Massachusetts). The clinical diagnostics company develops rapid point-of-care analysers and automated systems for hospital-based labs and near-patient testing worldwide.
Abingworth led the Series A financing with a $14 million investment. Other new investors included Hambrecht & Quist Capital Management and KBL Healthcare Ventures. Existing investors, Ampersand Ventures, Partners Capital, Nexus Medical Partners II SICAR and Boston Community Venture Fund also participated.
As part of the financing, Magellan has acquired TREK Diagnostic Systems (Cleveland) (See Deals roundup p. 4), a maker of automated systems and consumable products for microbiology diagnostic testing, serving the clinical, pharmaceutical, and veterinary laboratory markets.
Aesthetic Sciences (Palo Alto, California) formed in 2004 to develop products in the fields of aesthetic medicine and incontinence, reported the completion of its Series A financing with Domain Associates and New Leaf Venture Partners. The company received $3.2 million last week to complete the total of $6 million raised for the Series A financing.
The company said the Series A financing will allow it to continue the development of breakthrough technology for aesthetic procedures and the treatment of incontinence. The company has an exclusive license fromLandec (Menlo Park, California) for the worldwide use of Landec’s patented materials technology in the fields of aesthetic medicine and incontinence.
Landec holds a minority interest in Aesthetic Sciences and will receive royalties on sales by Aesthetic Sciences in the designated fields of use. It entered into an exclusive licensing agreement with Aesthetic Sciences in December 2005. At that time, Landec received an upfront license fee of $250,000 for the exclusive rights to use Landec’s materials technology in the fields of aesthetic medicine and incontinence worldwide. During the remainder of its fiscal year ended May 2006, Landec received 2.2 million shares of preferred stock in Aesthetic Sciences, initially valued at $1.3 million, which represents a 19.9% ownership interest in the medical device company.
As part of the original agreement, upon completion of a specific milestone by Aesthetic Sciences and completion of the Series A financing, Landec would also receive an additional 800,000 shares while ownership interest would remain at 19.9%.
Aesthetic Sciences has now met the additional contractual milestone, resulting in Landec receiving an additional 800,000 shares currently valued at $480,000.
In other financing news:
• Neurostar Solutions (Atlanta), developer of the Virtual Radiology Network (VRN) and Virtual Radiology Community (VRC) web site, has received $5 million in financing from Eastside Partners, a private equity fund that targets companies in the financial services, healthcare and information technology sectors.
The company said the new funds will allow it to accelerate its expansion into additional vertical markets, such as orthopedics and cardiology, as well as broaden its portfolio of managed services and online communities.
Neurostar Solutions’ technology is designed to power virtual radiology networks and is a leading platform for outsourcing radiology services. The web-based image management solution provides image communication over the Internet to authorized users independent of their location. The VRN pulls images from existing imaging modalities and PACS at multiple locations through an integrated network of on- and off-site servers and makes them available to any authorized user through integrated
• Sirona (Bensheim, Germany), one of the largest global manufacturers of dental equipment and technologies, reported that it entered into a new credit facility on Nov. 22. The new facility provides the company with expanded borrowing capacity, reduced borrowing costs, and less restrictive covenants.
The new facility consists of three five year tranches, a loan of $150 million, a loan of EUR 275 million (about $350 million), and a revolving credit facility that allows the company to borrow up to $150 million.
The revolving credit facility also includes an accordion feature that provides the company the option to pursue up to $150 million of additional capacity.
Initial borrowings under the new credit facility plus excess cash were used to retire the outstanding borrowings under the company’s previous credit facilities, which stood at EUR 326.6 million (about $415 million) and $118.7 million on Nov. 24.
As a result of the refinancing, Sirona will record a non-cash charge of about $20 million (pre-tax) in the quarter ended Dec. 31, as it will expense the remaining unamortized deferred financing fees related to its previous credit facilities as well as an early prepayment penalty of about $1.1 million.
In addition, Sirona will incur financing charges which will be capitalized and expensed over five years, the life of the new debt.
• Primedex Health Systems (Los Angeles), a national provider of diagnostic imaging services through a network of fully owned and operated outpatient imaging centers, reported a one-for-two reverse split of its outstanding common stock effective after the close of business this past Monday. Beginning on Tuesday, the company’s common stock began trading on the OTC Bulletin Board on a split-adjusted basis under the stock symbol RDNT.OB
As a result of the stock split, the number of shares of Primedex’s common stock outstanding will decrease from about 67 million shares to about 33.5 million shares.
Primedex management has determined that it is in the best interest of the company’s stockholders to become listed on the Nadaq Global Market as soon as practical. The company believes being listed on Nasdaq will create a more orderly and liquid market for the company’s securities, increase the visibility and profile of the company and be beneficial in attracting equity research coverage. It said it believes that the consummation of the proposed stock split will assist the company in meeting the requirements for listing on the Nasdaq.
The company reported that it has also changed its corporate name to RadNet , effective immediately. The new name reflects the name of the operating entity, RadNet Management, under which Primedex has been conducting its operations since 1992.
• Real estate investment trust company Ventas (Louisville, Kentucky) reported that it has priced a private offering of $200 million aggregate principal amount of 3-7/8% convertible senior notes due 2011.
The sale of the notes is expected to occur on Dec. 1. An additional $30 million aggregate principal amount of notes may be purchased, at the option of the initial purchasers, within 13 days.
The notes will mature on Nov. 15, 2011 and will be senior, unsecured obligations, ranking pari passu with all existing and future senior unsecured indebtedness of the company. The notes will also be guaranteed, on a senior unsecured basis, by Ventas Realty, Limited Partnership and certain of the company’s other direct and indirect subsidiaries. Interest on the notes will be payable semiannually on May 15 and Nov. 15 of each year, beginning on May 15, 2007.
The company said it currently plans to use the net proceeds of the offering to repay indebtedness under its revolving credit facility and for working capital and other general corporate purposes.
Prior to Sept. 15, 2011, upon the occurrence of specified events, the notes will be convertible at the option of the holder into cash and, in certain circumstances, shares of the company’s common stock at an initial conversion rate of 22.1867 shares per $1,000 principal amount of notes (which equates to an initial conversion price of about $45.07 per share). After that date, the notes will be convertible at any time prior to the second business day prior to maturity at the option of the holder into cash and, in certain circumstances, shares of the company’s common stock at the above initial conversion rate.
On Nov. 27, 2006, the closing sale price of the company’s common stock as reported on the New York Stock Exchange was $37.56.
Ventas is a healthcare real estate investment trust.