A Diagnostics & Imaging Week

Illumina (San Diego), which filed for a 3.5 million share offering last week, reported that it pulled down net proceeds of about $83.6 million at an offering price of $25.50 per share, and said it aims to use the money partly to boost diagnostics work.

"You can see the direction we're going by the deCode [Reykjavik, Iceland] deal we announced [last] Monday," Jay Flatley, president and CEO of Illumina, told Diagnostics & Imaging Week's sister publication BioWorld Today. With deCode, Illumina plans to co-develop and commercialize DNA-based diagnostic tests in several major disease areas, including heart attack, diabetes and breast cancer.

The deal will use Illumina's platform for high-multiplex single-nucleotide polymorphism genotyping to develop tests for gene variants deCode has investigated. Under the terms, Illumina gets access to disease-related biomarkers for joint validation as diagnostic panels to be sold by Illumina on its forthcoming BeadXpress platform. The companies will share development costs and split the profits from sales of the tests.

The deCode agreement is "certainly going to keep us busy, but we have others that we're talking about," said Flatley. "If our business plans are met, we would be sufficiently cash flow positive that we would not have to raise money in any time frame we could think about," he added.

Money from the current offering also will go toward general corporate purposes. Before the offering, as of April 2, Illumina had about $49 million in cash and cash equivalents.

Goldman, Sachs & Co. and Merrill Lynch & Co. are acting as joint bookrunning and co-lead managers of the offering. Cowen and Co. is co-lead manager of the offering. Robert W. Baird & Co., of Chicago, is co-manager.

Aspyra (Calabasas, California), a provider of clinical and diagnostic information systems, reported that it has raised $4.5 million through a private placement of its common stock with a group of accredited investors.

Under the terms of the agreement, which was effective May 4, investors received 2.25 million shares of common stock and 1.35 million warrants.

The per unit purchase price was $2, for an aggregate consideration of $4.5 million and the exercise price under the warrants is $3 per share.

The company said the funds will be used for completion of the integration plan associated with its recent merger, marketing, and general working capital purposes.

"The capital infusion will provide funding to help ensure the successful execution of our strategic integration plans associated with our recent merger with StorCOMM and to accelerate the marketing of our new products," said President and CEO Steven Besbeck.

In other financing activity:

• CytoCore (Chicago) reported that a large European institutional investor in CytoCore, Monsun, has chosen to convert its note into equity in the company.

"We are very pleased with the decision by Monsun to convert," said CytoCore CFO Robert McCullough Jr. "They have been a long term note holder in the company, and their conversion helps us on a number of fronts. Their conversion eliminates a substantial amount of debt in our restructuring and cleanup work which helps strengthen the balance sheet."

CytoCore develops cancer screening systems, which can be utilized in a laboratory or at the point-of-care, to assist in the early detection of cervical, endometrial, and other cancers. The InPath system is being developed to provide medical practitioners with a cervical cancer screening and treatment system that can be integrated into existing medical models or at the point-of-care.

• Biophan Technologies (Rochester, New York) reported that it has exercised a call requiring SBI Brightline XI to purchase 1 million shares of Biophan common stock at a price of $2 per share, as part of its financing agreement with SBI.

Under the financing agreement, Biophan has the right, at any time at its sole discretion, to require SBI to purchase up to 9 million more shares of common stock at prices ranging from $2 to $4 per share. If the facility is fully utilized, the company would receive aggregate proceeds of $30 million, at an average price of $3 per share.

"We are pleased to finally be moving forward with this critical component of our business plan," said Michael Weiner, Biophan CEO. "It will give us access to the capital needed to meet our development objectives in several critical markets and to continue the expansion of our marketing efforts."

The activities to be supported by this funding will advance Biophan's internal research and development for safe and image compatible products and will further enhance the company's strategic relationships, the company said.

These initiatives include a licensing agreement with Boston Scientific (Natick, Massachusetts); a cooperative research and development agreement (CRADA) with the FDA to research and define methods for measuring MRI safety of medical implants; focusing on the leads used with cardiac pacemakers, defibrillators, and neurostimulators; and Myotech's (Dedham, Massachusetts) Myo-VAD, a ventricular assist device (VAD), which does not contact blood, reducing the potential for complications that plague existing VADs.

Biophan's technologies are designed to enable medical systems such as pacemakers, interventional surgical devices such as catheters and guidewires, and implants such as stents to be safely and/or effectively imaged under MRI.

• Clinical Data (Newton, Massachusetts) reported that Third Security Staff 2001, an affiliate of Randal Kirk, chairman of the company's board of directors, purchased 100,000 shares of the company's stock from Israel Stein, MD, the company's executive vice chairman and interim CFO, for $20 per share in a private transaction.

Clinical Data provides molecular and pharmacogenomics services as well as genetic tests to improve patient care.

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