A Medical Device Daily

Conor Medsystems (Menlo Park, California) has priced its previously reported public offering of 3.5 million shares of newly issued common stock at $27.50 a share, to produce estimated net proceeds of about $89.9 million.

Conor and a selling stockholder also have granted the underwriters a 30-day option to purchase up to an aggregate of 525,000 additional shares of common stock to cover over-allotments, if any.

Conor develops vascular drug delivery technologies, and has initially focused on the development of drug eluting stents to treat coronary artery disease.

Citigroup Global Markets and Morgan Stanley & Co. are joint book-running managers of the offering, and, together with Lehman Brothers, Cowen and Company and CIBC World Markets, are the managing underwriters.

Diomed Holdings (Andover, Massachusetts), a developer of minimally invasive technologies, including its EndoVenous Laser Treatment (EVLT) system for treatment of varicose veins, reported an agreement with investors for a $10 million private placement of a new series of preferred stock.

The shares are exchangeable into about 8.7 million shares of Diomed common stock, resulting in a price of $1.15 per common share. The new series will be issued without warrants attached and provide for no dividends, except in the event of a future dilutive equity issuance.

Diomed also agreed to issue shares of its new series in exchange for about 4 million shares of existing preferred stock to be tendered at closing by existing preferred stockholders. The existing preferred shares are exchangeable by their terms on a 1-for-1 basis for 4 million shares of Diomed common stock, while the new series of preferred stock will be exchangeable for an aggregate of 8.7 million shares of common stock.

David Swank, CFO of Diomed, said that “subject to review by the AMEX, this transaction addresses the minimum stockholders equity concern noted by the exchange last month. Investors may be pleased to see that, under this financing, we have been able both to strengthen and to simplify our balance sheet.”

The company also agreed to register with the Securities and Exchange Commission, within the 120 days after closing, about 17.4 million shares of its common stock that underlie the shares of the new preferred shares.

Diomed's EVLT laser vein ablation procedure is used in varicose vein treatments. It also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications.

In other financing news:

• EDAP (Lyon, France) reported entering into a securities purchase agreement for 961,676 of its ordinary shares in the form of American Depositary Shares, expected to be issued at a per-share price of $7.75. The closing is expected on or about Aug. 3, subject to certain conditions. Net proceeds will total about $6.5 million after expenses.

EDAP said the proceeds would be used primarily for marketing of its Ablatherm High Intensity Focused Ultra-sound treatment for prostate cancer in Europe.

• Sontra Medical (Franklin, Massachusetts) reported board authorization of a 1-for-10 reverse split of its common stock – approved by shareholders at the company's annual meeting May 23 – to regain compliance with the Nasdaq's $1 minimum bid price listing requirement.

The reverse split is effective Aug. 11, when the company's common stock begins trading at the split-adjusted level.

The total number of shares outstanding will be reduced from about 27,207,995 shares to about 2,720,799 shares. No fractional shares will be issued in connection with the reverse split. Shareholders who would be entitled to fractional shares will receive cash in lieu of fractional shares.

Thomas Davison, PhD, Sontra's president/CEO, said the action “is in the best interests of our shareholders, continues our appeal to a broad range of investors and puts our company in an advantageous position to consider future financing opportunities.”

For a period of 20 trading days, the company's common stock will trade on a post-split basis under the symbol SONTD, and after this period, the stock will resume trading under the symbol SONT.

Sontra has developed the SonoPrep ultrasound-mediated skin permeation technology, combining it with transdermal drug formulations, delivery systems and biosensors to target continuous glucose monitoring and the transdermal delivery of large molecule drugs and vaccines.

• QLT (Vancouver, British Columbia) reported board authorization to purchase up to 13 million common shares in a modified Dutch Auction tender offer. Fully taken up, the offer represents 15% of the outstanding shares for a price of about $104 million. Shareholders will have the opportunity to tender all or a portion of their shares at not less than $7 and not greater than $8 from about Aug. 3 to Sept. 8.

The company's existing normal issuer bid, under which it said it has returned about $51 million to shareholders, has been terminated.

The company said the tender offer would be financed from its existing cash reserves.

Bob Butchofsky, president/CEO of QLT, said, “This tender offer represents an efficient return of capital to our shareholders and demonstrates our confidence in our future.”

Based on the number of shares tendered and the prices specified by tendering shareholders, QLT will determine the lowest price per share within the range that will enable it to buy 13 million shares properly tendered.

QLT develops treatments for eye diseases as well as dermatological and urological conditions.

• Steris (Mentor, Ohio) reported board authorization of the purchase of up to 3 million shares of its common stock, thereby replacing a previous authorization under which about 11,000 shares remained.

Steris develops infection prevention, decontamination and health science technologies, products and services.

• Health Care REIT (Toledo, Ohio) reported closing an expanded $700 million unsecured revolving credit facility that replaces an existing $500 million facility, scheduled to mature June 2008.

The credit facility was arranged by KeyBank National Association as lead arranger and administrative agent and Deutsche Bank Securities as lead arranger and syndication agent. UBS Securities, Bank of America and JPMorgan Chase Bank were the documentation agents.

Health Care REIT invests in healthcare and senior housing properties. At June 30, 2006, the company had investments in 464 facilities in 37 states with 57 operators and had total assets of approximately $3.1 billion.