Diagnostics & Imaging Week
And D&IWs

The pinchpenny public market is pushing more firms to take the route of Solexa (Hayward, California), which has gained a pledge for $75 million in a stock equity financing from busy Azimuth Opportunity.

"We don't have an immediate need," said Linda Rubinstein, CFO of Solexa, which had about $58 million in cash and cash equivalents as of June 30.

Azimuth, aboard for a two-year commitment, would buy stock from Solexa at what Rubinstein described as "a very modest discount" to the market price, and Solexa gets to decide when and how many shares. SEC paperwork shows the discount is between 3.62% and 5.37%, based on the stock price, near the cost of hiring a placement agent or underwriter.

Solexa plans to use proceeds to push its Genome Analysis System to market, and for general corporate purposes. The system combines Clonal Single-Molecule Array technology and Reversible Terminator chemistry, putting together sequence data at an expected scale of more than 1 billion bases per run, thus making human genome resequencing possible at less than $100,000 per sample.

Three units already have been shipped to two customers as part of an early access program, Rubinstein said, adding that the company would be "tweaking anything we need to. As we get comfortable with that, we'll be selling more broadly over the fall."

Based on today's spending, the market is about $1 billion, Rubinstein said.

"I'm not saying that's all of sequencing or expression profiling," she said, but the amount represents those applications that Solexa can satisfy, and there might be more.

Solexa said it investigated Azimuth carefully before making the deal.

After making a buy, Azimuth "typically hold[s] the shares for a while," Rubinstein said. "They've been very transparent and willing to work with management."

Home Diagnostics (Fort Lauderdale, Florida) reported the pricing of its initial public offering of 6,599,487 shares of common stock at $12 a share. The company will seek to raise about $39.6 million by offering 3.3 million shares, while the remaining shares will be sold by company stockholders.

Certain of the selling stockholders have granted the underwriters an option to purchase up to an additional 990,000 shares of common stock to cover over-allotments. Home Diagnostics will not receive any proceeds from the sale of shares by the selling stockholders.

The company originally filed for an offering of 6.6 million shares at a range of $14-$16.

Home Diagnostics said it will use the proceeds to redeem all of its outstanding preferred stock, purchase manufacturing equipment for new product development and repay indebtedness under its revolving credit, with the remaining balance going to general corporate purposes.

JP Morgan served as sole book-runner of the offering, with Piper Jaffray as joint-lead manager and Deutsche Bank and William Blair & Co., acting as co-managers of the offering.

The company's common stock will trade on the Nasdaq under the symbol HDIX.

Home Diagnostics is a manufacturer of diabetes testing supplies, offering a portfolio of blood glucose monitors.

In other financing news:

• Fisher Scientific International (Hampton, New Hampshire) reported receiving the required consents from note holders to execute supplemental indentures amending the indentures relating to its 6-3/4% senior subordinated notes, due 2014, and 6-1/8% senior subordinated notes, due 2015.

The consents were obtained in accordance with Fisher's consent solicitation, commenced Sept. 6 and expiring at 5 p.m. (EDT) Sept. 20.

On May 8, Fisher Scientific and Thermo Electron (Waltham, Massachusetts) unveiled their agreement to combine the two companies in a deal valued at about $10 billion, with Thermo to be a co-obligor on the notes on a senior subordinated basis. The supplemental indentures executed in connection with the consent solicitation will modify the covenant that requires the company to provide certain information to the applicable trustee and holders such that the filing of periodic reports with the SEC by Thermo, the direct parent of Fisher Scientific after the merger, will satisfy the information requirement and modify the provision addressing the effect of credit ratings on certain covenants, such that the rating necessary for termination or suspension of such covenants will be the rating of the relevant series of notes.

In accordance with the terms of the solicitation, the company will pay to each holder who has validly delivered a consent on or prior to 5 p.m. (EDT) on the expiration date the amount of $1.25 for each $1,000 principal amount of notes. No payment will be made unless and until the merger between Fisher Scientific and Thermo is consummated.

Deutsche Bank Securities acted as solicitation agent; Global Bondholder Services acted as information agent and tabulation agent for the solicitation.

Fisher Scientific is a provider of products and services to the scientific community.

Thermo claims a leading position in providing analytical instruments, with a concentration on advanced measuring instruments such as spectrometers used for chemical and protein analysis. The combined company will be named Thermo Fisher Scientific.

• Elbit Medical Imaging (Tel Aviv, Israel) said that it is examining the possibility of a primary offering of the ordinary shares of its wholly owned subsidiary, Plaza Centers (PC; Europe) and admission of those shares to listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange. Terms of the offering have not yet been finalized.

It is anticipated that, if a decision is made to proceed, the offering will take place "in the upcoming months."

• Laboratory Corporation of America Holdings (LabCorp; Burlington, North Carolina) reported the results of its offer to purchase up to $744 million in aggregate principal amount at maturity of its Liquid Yield Option Notes due 2021 (the LYONs) for cash pursuant to the terms of the LYONs. The holders' option to surrender their LYONs expired at 5 pm, (EDT), Sept. 21.

LabCorp has been advised by the paying agent, The Bank of New York, that about $34,000 in aggregate principal amount at maturity of LYONs were validly surrendered for purchase and not withdrawn. LabCorp has accepted all such LYONs for purchase at a price of $741.92 in cash per $1,000 in principal amount at maturity. The aggregate purchase price for all the LYONs validly surrendered for purchase and not withdrawn was about $25,225.28. LabCorp has forwarded cash in payment of the purchase price to the paying agent to distribute to the tendering holders.

This results in about $743,966,000 in aggregate amount at maturity of LYONS outstanding.

LabCorp commercializes new diagnostic technologies. The company, reporting annual revenues of $3.3 billion in 2005, has about 24,000 employees nationwide and more than 220,000 clients. LabCorp offers assays ranging from routine blood analyses to HIV and genomic testing.

• RedPath Integrated Pathology (Pittsburgh) reported raising $4 million in the first closing of its Series A round of equity financing. NewSpring Capital led the round which includes CID Capital and other investors. A second close is expected within 30 days.

The company said it will use the funds for sales and marketing activities and "to scale operations to meet market demand." Currently, more than two-dozen major cancer centers use RedPath's molecular-based analysis, it said.

The company is a national specialty laboratory that provides cancer diagnostic testing. RedPath says it is "one of a small but growing field of companies that are translating the information gain from the Human Genome Project into everyday patient care through molecular-based diagnostics."

The company's PathFinderTG technology provides a diagnosis for difficult cases where cancer is suspected or pre-cancerous conditions exist.