A Medical Device Daily

Osiris Therapeutics (Baltimore) priced 3.5 million shares of stock in its original public offering (IPO) at $11 – at the low end of the original $11-$13 range — in its bid to raise $39 million. All of the shares are being sold by the company.

Up to an additional 525,000 shares have been made available to the underwriters to cover over-allotments, if any.

Trading on the Nasdaq began Friday, opening at $11 and rising to $11.15 a share.

The company first unveiled plans for the IPO in May (Medical Device Daily, May 15, 2006).

Osiris has said that the net proceeds will be used to conduct Phase III trials of its Prochymal to treat graft-vs.-host disease (GvHD) and Chondrogen for the regeneration of meniscus, assuming the latter successfully completes its ongoing Phase I/II trial. Funds also will support other R&D activities and for early repayment of the principal and interest on a promissory note that matures on Nov. 28, 2008.

Osiris currently markets and sells Osteocel for regenerating bone in orthopedic indications.

Its Prochymal product is entering Phase III clinical trials, with Osiris calling it the only stem cell therapeutic currently designated by FDA as both an Orphan Drug and Fast Track product. The company's pipeline of internally developed biologic candidates under evaluation includes Chondrogen, for regenerating cartilage in the knee, and Provacel, for repairing heart tissue following a heart attack.

Osiris lost almost $20 million in 2005 and expects those losses to continue as the company continues R&D work in its products for treating disease, autoimmune disorders and arthritis. The company had an accumulated deficit of $142.5 million on Dec. 31.

EDAP TMS (Lyon, France), developer of the High Intensity Focused Ultrasound (HIFU) technology for treatment of prostate cancer, reported the closing of its private placement of 961,676 ordinary shares in the form of American Depositary Shares (ADS), bringing proceeds of about $6.5 million.

EDAP said that the funds would support additional marketing efforts to accelerate the adoption of Ablatherm-HIFU “in key European markets.”

For the last 12 months, the company said it has transitioned its Ablatherm-HIFU business from equipment sales to “an already successful and growing revenue-per-procedure [RPP] model.” Under the RPP approach, hospitals and clinics are not required to invest capital up-front to purchase the equipment, hence promoting acceptance of the system when combined with training programs that enable specialists to become proficient in its use in 10 to 15 treatment sessions.

The company said that its marketing will target both physicians and patients over the next 30 months, by increasing its web presence, providing support material and resources to third-party patient referral sources, hosting symposia and conversion workshops for medical staff and continuing its clinical activity to support the value of HIFU treatment.

EDAP said that in 2005 it launched 30 new Ablatherm-HIFU treatment centers, and an additional 21 centers in the first six months of 2006. It said that some centers using the Ablatherm-HIFU system are on the way to treating 20% of their localized prostate cancer cases after completion of their launch phase, “typically the first year of operation.”

Company cash at the end of the second quarter stood at about EUR 6.6 million, with proceeds from the financing to increase cash balances by about EUR 5 million.

Hugues de Bantel, CEO of EDAP, said, “We are now able to credibly roll out major marketing campaigns in key countries with the support of the urology community, with the aim of accelerating our growth rates . . . We plan to both launch additional sites and employ marketing programs at our existing sites to help make patients aware of the unique and beneficial therapy available at these centers.”

Ablatherm-HIFU is recommended for patients with localized prostate cancer who are not candidates for surgery or who prefer an alternative option, or for patients who failed radiotherapy treatment. The company also produces medical equipment for treatment of urinary tract stones using extra-corporeal shockwave lithotripsy.

In other financings:

• Aspect Medical Systems (Newton, Massachusetts) reported that its board has authorized repurchase of up to 2 million shares of company common stock.

Mike Falvey, CFO of Aspect, said the repurchases “will allow us to offset dilution associated with employee stock plans and manage our cash balance . . . and that this action demonstrates our commitment to enhancing shareholder value.”

Aspect said the repurchases would be funded using working capital. As of July 1 it reported cash, cash equivalents and marketable securities of about $66 million. As of Aug. 1 it reported about 22.5 million shares of common stock outstanding.

Aspect is a market leader in brain monitoring technology. It reports its Bispectral Index technology is used to assess more than 16.3 million patients and the subject of more than 2,300 published articles and abstracts.

• PainCare Holdings (Orlando, Florida) reported re-negotiation of the terms of its prior private placement transactions, in association with Midsummer Investment and Islandia, providing for a three-year extension on all existing debentures and for an additional $3 million investment in the company by investors.

Investors have agreed to extend the maturity date by three years, beginning Aug. 1 and ending July 31, 2009. Any unconverted debentures outstanding on the maturity date will be redeemed in cash equal to the face amount of the debentures plus all accrued interest.

PainCare also reported completing a convertible debenture financing with investors for convertible debentures of $3 million, with a term of three years and convertible into the company common shares at the rate of one share for each $1.90 of debt converted.

For providing the extension and the $3 million additional investment, the investors will receive 500,000 restricted common shares.

PainCare is a provider of pain-focused medical and surgical solutions and services through a network of acquired or managed physician practices and ambulatory surgery centers, and in partnership with physician practices and medical institutions throughout the U.S. and Canada.