A Medical Device Daily

Correlogic Systems (Rockville, Maryland) reported thatMitsui & Co. (Tokyo) has made a second tranche investment in Correlogic and that the two companies have entered into a research collaboration for the clinical development of diagnostic tests for use in Japan. The amount of the investment was not disclosed.

In 2004, Mitsui made a first-round investment and the companies entered an agreement to explore the application of Correlogic’s pattern recognition technology to the detection of ovarian cancer in Japanese patients. Under the auspices of Jikei University , Japan’s medical institution for gynecologic cancers, Correlogic conducted a “mini-trial” involving the application of Correlogic’s technology to Japanese patient serum samples.

The companies said that the agreement reflects the successful conclusion of the mini-trial and the commitment of both companies to proceed with development of a range of pattern recognition blood tests for Japanese patients, for the detection of ovarian and other cancers, including cancers with particular prevalence in Japan.

Quintiles Transnational Japan K.K., Japan’s largest contract pharmaceutical organization, has been selected to work with Mitsui and Correlogic in the collection of additional research samples and the conduct of clinical trials.

“The R&D agreement represents an enormous opportunity for Correlogic to bring our technology to the world’s second largest market.” said Peter Levine, president/CEO of Correlogic.

Correlogic has developed technology and processes with a wide variety of applications for biomarker discovery, disease detection, and new drug discovery. The technology’s first application has been in the field of proteomics - the study of human proteins.

Pluristem Life Systems (Haifa, Israel) reported that it has completed the conversion of 98% of the $3 million in convertible debentures that were issued on April 3 to common stock of the company. There are now about 254 million outstanding shares.

“This allows us considerably more financing flexibility because until over 75% of the debentures were converted to common stock, we were prevented from pursuing certain types of financing arrangements and our assets were encumbered as collateral security for repayment of the debentures,” said Zami Aberman, Pluristem’s CEO.

“Now that the vast majority of the debentures have been converted our assets are no longer encumbered and we are no longer restricted in the type of financing arrangements we can make. In addition, our balance sheet no longer will show the converted debenture proceeds as a liability.”

Pluristem is a life-sciences-driven company that is developing stem cell expansion technology products for the treatment of severe blood disorders. The company expects its first products to be cell grafts that will provide an alternative to the standard procedure of bone marrow transplantation. Its first adult stem cell product is intended to target a critical global shortfall of matched tissue for bone marrow transplantation.

In other financing activity:Laboratory Corporation of America Holdings (LabCorp, Burlington, North Carolina) reported the results of its offer to exchange a new series of zero-coupon convertible subordinated notes due Sept. 11, 2021, and an exchange fee of $2.50 per $1,000 principal amount at maturity for all of its outstanding liquid yield option notes (LYONs) due 2021.

The exchange offer expired Monday.

LabCorp has been advised by the paying agent, The Bank of New York, that $741,243,000 in aggregate principal amount at maturity of LYONs, representing about 99% of the LYONs, were validly tendered for exchange and not withdrawn. Following settlement of the exchange, $2,662,000 in aggregate principal amount at maturity of LYONs and $741,243,000 in aggregate principal amount at maturity of the new notes will be outstanding.

LabCorp says it is the second largest independent clinical laboratory company in the U.S., based on 2005 revenues. The company offers clinical laboratory tests used in routine testing, patient diagnosis and the monitoring and treatment of disease.

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