Medical Device Daily Associate

Hansen Medical (Mountain View, California) reported that it has priced its initial public offering (IPO) of 6.25 million shares of common stock at $12 a share, the midpoint of its Securities and Exchange Commission (SEC) filing for $11 to $13 a share that was reported on earlier this week (Medical Device Daily, Nov. 14, 2006). At that price, the company could raise up to $75 million before expenses.

The company, which is developing robotic technology for the accurate positioning, manipulation and stable control of catheters and catheter-based technologies, has also granted the underwriters a 30-day option to purchase up to an additional 937,500 shares to cover any over-allotments giving the offering a value of $86.25 million before expenses.

Hansen Medical’s common stock was expected to begin trading on the Nasdaq Global Market yesterday under the trading symbol HNSN. All of the shares in the offering are being offered by the company.

The underwriters of the offering will be Morgan Stanley & Co., and J.P. Morgan Securities as joint bookrunners, and Thomas Weisel Partners and Leerink Swann & Co., as co-managers.

Hansen Medical believes robots can help doctors take better care of their cardiac patients. The company’s Sensei system, which includes an electromechanical robot, assists in guiding the movement of diagnostic catheters for hard-to-reach places in the heart.

Currently in trials for FDA approval, the Sensei system and Artisan control catheters are designed to help simplify cardiology procedures and decrease treatment time.

Chief Financial Officer Steve Van Dick told Medical Device Daily that the company is also working on getting the system approved in Europe.

“We’re expecting to get a CE mark for the disposable catheter part of our [Sensei] system in the first quarter of 2007,” said Van Dick. He added that the company expects to get its U.S. clearance for the system in 3Q07.

“We see the U.S. market as the larger opportunity,” noted Fred Moll, MD, founder and CEO of the company. He added that the company’s most direct competitor in the electrophysiology space is Stereotaxis (St. Louis) via its Niobe magnetic navigation system. “We think we’re very competitive with them and have substantially different economics associated with our system.”

Moll also said he sees the system as a platform technology that has potential uses in several other areas in the vascular field, but he declined to discuss them at this time.

Moll said clearance of the company’s system will enhance the speed and safety of catheter-based therapeutic procedures by offering physicians control over catheter placement, not achievable with existing interventional techniques.

Founded in 2002, the company said it plans to use the IPO funds for product development, research, sales and marketing, and administrative activities. Chairman Russell Hirsch owns about 23% of the company through Prospect Venture Partners and affiliates.

Hansen has a history of net losses and has no regulatory approvals yet from the FDA. In its original filing for the IPO in August, the company noted that it has experienced substantial net losses since its inception in late 2002. It reported net losses of about $4 million in 2003, $7.1 million in 2004, $21.4 million in 2005 and $11.4 million in the six months ended June 30, and as of June 30, the company had accumulated deficit during the development stage of $44.4 million. The company noted that it anticipates continued losses “for the foreseeable future.”

While it has not enjoyed profitability, investors have found its story compelling enough to fund it through three private rounds valued at more than $54 million. The most recent funding round prior to the IPO occurred in November 2005 and was valued at $30 million. Currently, existing shareholders through the private rounds own about 50% of the company’s stock.

In other financing news:

• Performance Health Technologies (Trenton, New Jersey), reported that it filed a registration statement with the SEC on Nov. 14 with respect to an offering of up to 82,699,231 shares of common stock by certain company stockholders.

The company said it expects to apply for listing its common stock on the Over-the-Counter Bulletin Board prior to the commencement of the offering.

The company’s common stock is presently not traded on any market or securities exchange.

Performance Health develops performance evaluation and rehabilitation products that monitor and guide exercise and give real-time motivational feedback.

• Ciphergen Biosystems (Fremont, California) reported that it has completed the exchange of its outstanding 4.50% convertible senior notes due 2008 as previously agreed to by separate privately negotiated agreements with certain holders. $27.5 million aggregate principal amount of the outstanding notes were exchanged for $16.5 million of a new series of 7% convertible senior notes due 2011 and $11 million of cash.

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