A Medical Device Daily

North American Scientific (Chatsworth, California) reported that it has entered into an agreement to raise $24 million in a private placement of common stock and the concurrent issuance of warrants for the purchase of common stock.

The company said the proceeds will be used for new product development, including the company's breast brachytherapy product and for working capital.

L. Michael Cutrer, president and CEO of North American Scientific, said the offering is intended to enable the company “to regain compliance with Nasdaq listing requirements.”

Three Arch Partners is leading the private placement and will invest $10 million, and Three Arch will nominate two members to join North American Scientific's board. CIBC World Markets acted as the sole placement agent for the transaction.

At the closing of the transactions, investors will receive 12,291,934 shares of the company's stock at $1.95 a share, as well as warrants to purchase 6,145,967 shares of common stock at $2.08 a share, exercisable beginning 180 days after the date of closing until seven years after the date of closing.

North American Scientific develops radiation therapy products and services for cancer therapy, including radioisotope-based brachytherapy seeds used in the treatment of prostate cancer, marketed under the trade name Prospera; Intensity Modulated Radiation Therapy; and Image Guided Radiation Therapy.

In other financing activity:

• CS-Keys (Indianapolis), a company formed this past February, reported receiving $285,000 in an Indiana Seed Fund investment to complete several key scientific and business milestones, including validation and clinical studies and completing a market and product strategy study.

CS-Keys says it is developing a new diagnostic tool that can help detect cancer in its earliest stages. It says this technology was developed in the lab of Dr. Linda Malkas, professor of medicine at Indiana University School of Medicine, and Vera Bradley, chair for oncology at the university.

“This technology is expected to impact the way women with breast cancer are diagnosed and treated and potentially lead to more targeted therapeutics,” according to a statement from CS-Keys. “It could also impact the quality of life for patients undergoing treatment.”

The company said that its biomarker “not only distinguishes benign from cancerous cells, but can also detect the diseased cells when there are just a few present. Consequently, the diagnostic may be useful in identifying cancer in its earlier stages.”

“This new diagnostic utilizes current medical practices in use for detecting breast cancer,” said CS-Keys founder Linda Malkas, PhD. “Pathology labs do not have to invest in any additional equipment. They only need a minimal amount of training and a stain that we have developed for this purpose.”

The company is located at the Indiana University Emerging Technologies Center.

The $6 million Indiana Seed Fund is a seed-stage venture fund managed by BioCrossroads, Indiana's life sciences initiative, with financial support coming from the Indiana Finance Authority, the Indiana Health and Educational Facility Financing Authority and BioCrossroads.

“Our mission is to invest in truly novel life sciences businesses, through vehicles like the Indiana Seed Fund,” said David Johnson, BioCrossroads president and CEO. “The other part of our mission is to work with our stakeholders, like the Indiana University School of Medicine, to uncover potential businesses opportunities and match them with the resources they need to grow.”

In related news, the Vera Bradley Foundation for Breast Cancer reported a $6.8 million commitment to the Indiana University School of Medicine for cancer research. With this announcement, the foundation has committed or given more than $10 million to the school to support cancer research.

• Cyntellect (San Diego), a privately held biotech company, reported receiving a $2.2 million equity purchase milestone payment from Sigma-Aldrich (St. Louis), representing Cyntellect's accomplishment of certain goals under the companies' exclusive Cell Xpress service commercialization agreement executed last year.

Sigma-Aldrich said it will use Cyntellect's LEAP system to support its Cell Xpress service business to identify and clone high-producing cells used in manufacturing of biopharmaceuticals and diagnostic antibodies.

Cell Xpress is based upon Cyntellect's Laser Enabled Analysis and Processing (LEAP) platform, which enables a high-throughput process for in situ measurement of protein secretion on an individual cell basis, coupled with laser-based elimination of undesired cells. As a result, Cell Xpress directly clones the cells secreting the highest amounts of protein. The automated capabilities of LEAP also facilitate the integration of culture media optimization with the cell cloning process, in addition to documentation about the clonal and growth history of each cell line that is developed to comply with FDA requirements.

Cyntellect says it combines expertise in high-speed cell imaging and laser-based manipulation to develop products that enable novel cell imaging, purification, and transfection capabilities to enhance the productivity of laboratory research, recombinant protein production, high-content cellular assays, functional genomics and proteomics, and cell purification, including processing of cells for therapeutic transplantation.

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