Luminetx (Memphis) reported Friday that it has raised about $15 million in capital during its most recent financing round.

According to Jim Phillips, company president/CEO, "We saw this as a unique opportunity to not only build our financial resources but to expand our investor pool to include key industry participants."

The funds were raised to provide additional capital for the ramp up of sales and marketing activities for its flagship product, the VeinViewer, a vascular imaging system, and to provide additional resources for the company's R&D and international sales efforts.

With announcement of the new financing, the company also reported that it has received clearance from the FDA for the VeinViewer as a Class I Exempt Medical Device, thus allowing it to begin full commercial roll-out of the system.

The VeinViewer is used to view accessible vasculature (or lack thereof) in real time. The device uses a combination of near-infrared light and patented technologies to image vascular structures and project their location directly on the surface of the skin, according to Luminetx.

The company says that this provides clinicians with a safe, non-invasive adjunct technology for clinical treatments and procedures including, but not limited to IV insertions, PICC line insertions, routine venipuncture (blood sampling), blood and plasma donations and treatment for varicose and spider veins.

Pilot manufacturing of the VeinViewer began this spring, and with the added financing and the FDA clearance, full-scale commercial introduction will begin immediately, Luminetx said.

Investors in the latest round include "selected strategic investors" and existing shareholders who had "expressed a desire to increase their existing stake in the company's success," Luminetx said.

Luminetx raised its first angel round of $4 million in early 2005. It then raised $11 million in a Series A round in September 2005.

Phillips told Diagnostics & Imaging Week that this most recent round was "really just an add-on" to the Series A financing.

He described the strategic investors as "typically people who have been in the business" either as executives or founded medical device companies and "are strategic to us."

In all, the company has raised $30 million with no venture capital involved.

Asked how long he expected this latest funding to carry the company, Phillips said: "Maybe forever."

The company's first pilot marketing efforts involved between 100 and 200 units of the VeinViewer sent to more than 100 hospitals.

In addition to furthering the U.S. marketing efforts, the funding will be used to move the company toward international sales, Phillips said. He added that he wants to move the company from just-in-time manufacturing to be able to produce more units quickly.

"They have done incredibly well," he said. "Every hospital we have talked to in the country has said they want to buy multiple units."

At the time of the initial angel funding in May 2005, Phillips said that the VeinViewer "will change the standard of healthcare delivery in America. It boosts clinician confidence and patient satisfaction" by improving care and "efficiency of delivery."

Luminetx has 50 employees, with about 80 sales representatives with its distributor, Phillips said.

Phillips summarized the mood for the company: "It feels generally real [good] right now."

In other financings news:

  • Ciphergen Biosystems (Fremont, California) reported that it has entered separate privately negotiated agreements with certain holders of its outstanding 4.5% convertible senior notes due 2008, under which such holders have agreed to exchange $27.5 million aggregate principal amount of outstanding notes for $16.5 million aggregate principal amount of a new series of 7% convertible senior notes due 2011, or new notes, and $11 million in cash.

The transactions are contingent on the completion of the sale of the life science research business to Bio-Rad Laboratories (Hercules, California) in a deal that would bring $20 million in cash to Ciphergen, plus a$3 million equity investment in the company by Bio-Rad. The deal has been approved by Bio-Rad's stockholders. The deal was first reported by the companies in August.

The exchange is expected to close on or about Wednesday.

The new notes will mature on Sept. 1, 2011, bear interest at a rate of 7% annually, which may be reduced to 4% per year if the company receives approval or clearance for commercial sale of any of its ovarian cancer tests by the FDA. The new notes are convertible into the company's common stock at an initial conversion price of $2 a share.

  • MedCath (Charlotte, North Carolina) reported the pricing of its public offering of 4.5 million shares of common stock, 1.7 million of which are being sold by the company and 2.8 million of which are being sold by certain selling stockholders, at $25 per share.

The selling stockholders have granted the underwriters the right to purchase up to an additional 675,000 shares at the public offering price. The company said it will not receive any proceeds from the sale of shares by the selling stockholders.

MedCath is focused on the diagnosis and treatment of cardiovascular disease. MedCath owns interests in and operates 11 hospitals with a total of 667 licensed beds, in Arizona, Arkansas, California, Louisiana, New Mexico, Ohio, South Dakota, and Texas. In addition, it manages the cardiovascular program at various hospitals operated by other parties. Further, it provides cardiovascular care services in diagnostic and therapeutic facilities in various states.

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