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In what could bring the company $39 million, Rosetta Genomics (Rehovot, Israel) filed for its initial public offering to fund research and development, including work on diagnostic products for prostate, lung, colorectal and breast cancers.

The company said it plans to offer 3 million shares at a price between $11 and $13 per share. It would list the shares on the Nasdaq National Market under the symbol “ROSG.”

Underwriters include C.E. Unterberg, Towbin; Oppenheimer & Co.; and Maxim Group. They have an overallotment option to purchase another 450,000 shares, which would bring the company $5.85 million in additional gross proceeds if priced at the top of the price range.

About $17 million in net proceeds from the IPO would be used for research and development activities, consisting of $1.5 million each for a prostate cancer and a lung cancer diagnostic product; $3 million each for a colorectal cancer and a breast cancer diagnostic product; and $4 million each for a CUP (cancers of unknown primary site) diagnostic product and a liver cancer therapeutic. Another $2.5 million in proceeds would be set aside to fund licensing and protection of intellectual property rights, and $12.6 million would fund business development and cover general corporate purposes.

Rosetta Genomics is studying a group of genes known as microRNAs, which are naturally expressed using instructions encoded in DNA. They are believed to play a role in regulating protein production and could be used to form diagnostics and therapeutics for cancer and infectious diseases. Diagnostic tests based on microRNAs may provide information that result in the earlier detection of diseases and the ability to make individual treatment decisions.

MicroRNAs, Rosetta said, are expressed in different amounts in diseased vs. healthy cells and therefore can be used in diagnostic tests and as targets for therapeutics. Drugs that use microRNAs as targets may be more effective than existing classes of drugs because microRNAs are believed to be closer to the biological origin of the disease.

The idea is that drugs targeting microRNAs might take less time to design than others because they won't require scanning large libraries. MicroRNAs have known sequences, so developing a targeted drug would require a molecule that is a complementary sequence of that particular microRNA.

MicroRNAs also may have broader applications than small-interfering RNAs, which cannot increase protein production and cannot be used as biomarkers of disease because they are synthetically produced. MicroRNAs can be used to decrease or increase the levels of proteins, and because they are naturally produced by cells, can be used as indicators of disease.

As Rosetta works on its diagnostic and therapeutic products, it also is pursuing strategic collaborations. It currently has license agreements with, among others, Applied Biosystems Group (Foster City, California) and Johns Hopkins University (Baltimore). It is collaborating with Asuragen (Austin, Texas), to co-develop diagnostics for prostate cancer; with U.S. Genomics (Woburn, Massachusetts., to incorporate its microRNA profiling technology into Rosetta's development of a lung cancer diagnostic; with Isis Pharmaceuticals (Carlsbad, California), to co-develop therapeutics for liver cancer; and with Sloan-Kettering Institute (New York) for Cancer Research and Hadassah Medical Organization (Jerusalem) to develop microRNA-based products.

Rosetta has filed patent applications with claims that cover about 350 biologically validated human microRNAs and 35 viral microRNAs. Incorporated in March 2000, it has a wholly owned subsidiary, Rosetta Genomics Inc., based in North Brunswick, New Jersey.

Following the offering, the company would have 10.5 million shares outstanding. Major shareholders include Isaac Bentwich, the company's founder and chief architect, who currently holds a 29.4% stake; and Kadima Hi-Tech Ltd., which has a 23.7% stake. Directors and executive officers of the company own about 38.1% of the company.

In other financing news:

RenaMed Biologics (Westborough, Massachusetts) reported that it has successfully completed a $40 million mezzanine financing. The funds will be used to continue the clinical development of the company's Renal Bio-Replacement therapy for acute renal failure (ARF), as well as support its move to a new headquarters and manufacturing facility in Westborough, Massachusetts.

TVM Capital and Lurie Investments co-led the financing and were joined by several new investors, including MDS Capital, Merlin BioMed Group, Dow Employees' Pension Plan and TSC BioVenture Capital Corp. Existing investors who also participated in this round include: Apjohn Ventures Fund, BD Ventures (Becton Dickinson), Bio*One Capital (Singapore), and NorthCoast Technology Investors.

“The funds raised enable us to drive the clinical development of our acute renal failure program through Phase 2 this year and into Phase 3 next year, complete the build-out and commissioning of manufacturing in our Westborough, Massachusetts facility, and expand investment in other programs,” said Greg Phelps, chairman and CEO of RenaMed.

RenaMed is developing Renal Bio-Replacement Therapy (RBT) to temporarily replace lost kidney functions in ICU patients with ARF, as a bridge to survival and full recovery. RBT is administered ex vivo using physiologically active human renal epithelial cells incorporated in a hollow-fiber dialysis cartridge. RBT works in conjunction with current filtration therapies and fits into standard hospital ICU procedures.

HealthSouth (Birmingham, Alabama) reported that it has established a record date and special meeting date for stockholders to consider and vote upon its previously disclosed proposal to approve a one-for-five reverse stock split (MDD, Aug. 15, 2006).

The reverse stock split will coincide with HealthSouth's expected relisting on the New York Stock Exchange. All stockholders of record of HealthSouth at the close of business on Sept. 7 are entitled to receive notice of and to vote at the special meeting of stockholders or at any adjournment or postponement of the meeting. The special meeting will be held Oct. 18 at the Cahaba Grand Conference Center at One HealthSouth Parkway, Birmingham, Alabama.

HealthSouth provides outpatient surgery, diagnostic imaging and rehabilitative healthcare services.