A Diagnostics & Imaging Week

Sequenom (San Diego), a developer of genetic analysis systems, reported closing its $33 million private placement financing with four institutional investors. The investment included the sale and issuance of about 20 million shares of common stock and warrants to purchase an additional 12 million shares of common stock.

The investors were Pequot Private Equity Fund IV, ComVest Investment Partners II, LB I Group (an affiliate of Lehman Brothers) and Siemens Venture Capital.

"The financing provides Sequenom and its customers, collaborators, employees and shareholders with a solid foundation on which the company can grow its core business, unlock the potential of its noninvasive prenatal diagnostics technology, and provide genetic analysis solutions more broadly and on an accelerated timetable," said Harry Stylli, PhD, president and CEO of Sequenom.

Net proceeds from this financing will be used for general working capital purposes and executing new management strategies in noninvasive prenatal diagnostics, according to the company. The private placement was approved by stockholders at the company's annual meeting held on May 31.

Sequenom is a developer of genetic analysis products that translate genomic science into solutions for noninvasive prenatal testing, biomedical research, molecular medicine and agricultural applications.

Mediscience Technology (Cherry Hill, New Jersey) and an unnamed New York investment group have executed an agreement seeking a minimum of $5 million and a maximum of $10 million on terms favorable to the company's shareholders and providing for a "firm commitment public offering" by the company's wholly owned subsidiary for its ingestible diagnostic pill – called the Com-pact Photonic Explorer (CPE) – presently under joint development with its equity partner, Infotonics Research (Rochester, New York).

The company believes the CPE demonstrates great promise in providing a noninvasive, preliminary means of detecting in vivo precancerous and cancerous tissues in the upper digestive tract with the use of diagnostic photonics molecular data as compared to other scientific technology platforms upon which pill technology is being produced.

Infotonics and Mediscience are jointly developing the CPE for medical applications. The initial focus of the project is developing a pill that would detect cancer and monitor body functions.

Impulse Monitoring (Columbia, Maryland), a healthcare company that provides intra-operative neurophysiological monitoring (IONM) during invasive surgical procedures, reported completing a $9 million round of financing.

New investor Tullis-Dickerson led the round, with additional participation from existing investors. As a result of this investment, Timothy Buono of Tullis-Dickerson will join the company's board of directors.

The company said it would use this capital to differentiate services and rapidly expand its presence in the U.S.

IONM is the application of electrophysiological and vascular monitoring procedures during surgery. Impulse says that IONM reduces neurological injuries to patients during surgical procedures by detecting early warnings of injury and thus enabling intervention.

In other financing news:

• HealthSouth (Birmingham, Alabama) reported that it has priced a private offering of $1 billion aggregate principal amount of its senior notes, which includes $375 million in aggregate principal amount of its floating rate senior notes due 2014 at par and $625 million aggregate principal amount of its 10.750% senior notes due 2016 at 98.505% of par. The floating rate notes will bear interest at a per annum rate equal to six-month LIBOR plus 6%.

The company said it intends to use the proceeds from the issue, along with cash on hand, to repay all outstanding borrowings under its interim loan agreement, which it entered into on March 10.

HealthSouth is a provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services.

• Elbit Medical Imaging (Tel Aviv, Israel) said it has agreed with Israeli investors to issue about NIS 68 million aggregate principal amount of unsecured non-convertible Series A debentures to investors in Israel. These debentures would be in addition to the NIS 400 million in principal amount of Series A debentures and NIS 59 million in principal amount of Series B debentures, issued to Israeli investors in February and March.

Elbit Medical Imaging is a subsidiary of Europe Israel. One of its three subsidiaries is InSightec (Haifa, Israel), doing R&D work in image-guided focused ultrasound.

• Spectral Diagnostics (Toronto), a developer of rapid diagnostic technologies, has signed an agreement with security holders of IDx to settle $10 million of outstanding convertible notes payable.

The company will issue 4,251,258 common shares of Spectral and a $2.5 million non-interest bearing, unsecured, convertible note payable Dec. 31, 2010, as settlement of all obligations related to the debt. In addition, the existing 500,000 Spectral warrants exercisable at $3 a common share until Nov. 3, 2008, will be cancelled, and 500,000 new warrants at a price of 47 cents a common share, expiring June, 2011, will be issued.

Upon closing, expected at the end of June, the company said it will recognize an accounting gain on settlement of debt of about $5 million.

Anthony Businskas, executive vice-president and CFO of Spectral, said, "Our balance sheet will be significantly improved and any uncertainty around the resolution of the IDx debt obligation will be removed.

• StatSure Diagnostic Systems (Framingham, Massachusetts) reported that it has completed the sale of $2.15 million of its Series 2006 A 8% convertible preferred stock to institutional investors.

Chardan Capital Markets was the company's placement agent for this transaction. StatSure's primary business relates to a patented technology that provides point-of-care testing for certain infectious diseases. The company's first commercial introduction of this platform is expected to be in screening for HIV antibodies.

The company said this funding would permit it to commercialize its intellectual property across a broad range of infectious disease testing opportunities beyond AIDS.

"This financing represents an important milestone in our progress toward commercializing our rapid-diagnostic product technology," said Steve Peltzman, CEO and chairman of StatSure. "In addition, these funds will enable us to capitalize on the growing market demand for our oral fluid collection device. StatSure will invest in building the on-going revenue base of this high margin product line and take advantage of the increasing external demand for oral fluid testing for drug of abuse, certain cancers and other novel analytes."

• Crescent Diagnostics (London), a company developing a new test for bone health, reported the completion of a EUR 800,000 ($1 million) funding round.

Seroba BioVentures (Dublin, Ireland), a specialist life science venture capital firm led the round in conjunction with a number of private investors.

Crescent, founded in 2004, is a development stage diagnostic company focused on advancing its Bone Quality Test (BQT). BQT is a method of assessing osteoporosis fracture risk and drug response simply by examining the human fingernail.

The current gold standard method involves exposing the patient to expensive X-ray based DEXA scans. In preliminary clinical studies, Crescent has shown that its BQT was a better predictor of fracture risk than DEXA. Awareness of bone quality as an important factor in bone health and in determining risk of bone fractures is growing.

As part of the financing, Alan O'Connell, a partner from Seroba, will join the board of directors.