A Medical Device Daily

Corautus Genetics (Atlanta), developing gene therapy products for the treatment of cardiovascular (severe angina) and peripheral vascular disease, reported that Boston Scientific (Natick, Massachusetts) has converted its $15 million in convertible notes payable by Corautus, plus approximately $1.6 million in accrued interest, into Corautus equity.

In exchange for extinguishing the notes payable and interest accrued through June 30, Corautus has issued to Boston Scientific 2,475,659 shares of Series E preferred stock with a liquidation preference of about $6.71 per share.

The preferred shares are convertible into a like number of shares of Corautus common stock. The agreement was executed and closed on June 30. As a result of the transaction, Boston Scientific holds shares representing 25% of Corautus' voting securities.

In the transaction, Boston Scientific also received the right to appoint a board member and a right of first negotiation for distribution rights for future product candidates.

Richard Otto, president and CEO of Corautus, said, “We are pleased by what we believe is a demonstration of continued confidence in Corautus by Boston Scientific, our development partner since July 2003 and by the significant strengthening of our equity position that results from this conversion of debt into equity.“

Corautus Genetics is a clinical-stage biopharmaceutical company dedicated to the development of gene transfer therapy products for the treatment of cardiovascular and peripheral vascular disease.

The company is developing and testing a gene therapy product candidate using the VEGF-2 gene to promote therapeutic angiogenesis in ischemic muscle. Corautus has a strategic alliance with Boston Sci to develop, commercialize and distribute the VEGF-2 gene therapy products

In other financings news:

• Arcadia Resources (Southfield, Michigan), a national provider of home care and staffing services, respiratory and durable medical equipment, reported completion of a new $15 million debt financing from one of its long-term shareholders, Jana Master Fund, and the filing of the related Form 8-K with the Securities and Exchange Commission.

“We are pleased with the confidence that Jana Master Fund continues to show in Arcadia,“ said Chairman and CEO John Elliott II. “This capital allows us to realign our balance sheet and make ready for certain acquisitions that we are pursuing. We plan to continue along our path of strong internal growth, coupled with other selective acquisitions and the initiation of start up locations. Recently, we agreed to place nine walk-in, routine [non-emergency] medical clinics inside select Meijer supercenter stores in Indiana over the next 12 months.“

• Applied Precision (Seattle), a provider of automated metrology, inspection, imaging and analysis equipment for the semiconductor and life sciences industries, reported that it has filed a registration statement on Form S-1 with the SEC for an initial public offering (IPO) of shares of its common stock. All shares of common stock to be sold will be offered by the company, while the number of shares to be offered and the price range of the proposed IPO have not yet been determined.

• Advocat (Brentwood, Tennessee) reported it has entered into a commitment with Capmark Finance for a “comprehensive refinancing“ of the company's long-term debt.

Capmark will provide mortgage debt of about $22.5 million with a five-year maturity and a term note of about $8.1 million with a four-year maturity to refinance the company's remaining mortgage and bank term debt.

Final terms remain subject to negotiation, and the transaction is expected to close during 3Q06.

Will Council, president and CEO, said, “The completion of this refinancing will be a major milestone in the turnaround of Advocat. The new agreement will bring the remaining debt covenants into compliance and strengthen our balance sheet by providing long term maturities.“

Advocat provides long-term care services to nursing home patients in eight states, primarily in the Southeast. The company has 43 centers containing 4,505 licensed nursing beds.

• Biosite (San Diego), a company commercializing proteomics discoveries for the advancement of medical diagnosis, reported that, in accordance with Nasdaq Marketplace Rule 4350, 37 non-officer employees were granted inducement stock options covering an aggregate of 35,050 shares of common stock. These options were granted pursuant to Nasdaq Marketplace Rule 4350 (i)(1)(A)(iv) with the following terms: each option has been classified as a non-qualified stock option, has an exercise price equal to the fair market value on the grant date, has a 10-year term, and vests in 16 equal quarterly installments over four years.