A Medical Device Daily
Artes Medical (San Diego) reported that it has filed a registration statement with the SEC for a proposed initial public offering of its common stock. The number of shares to be offered and the price range of the proposed offering have not yet been determined, but the company's filing shows a maximum offering price of $75 million.
All of the shares of common stock will be offered by the company, it said.
Artes is a fully integrated medical technology company focused on developing a new category of permanent aesthetic micro-injectable products for the dermatology and plastic surgery markets.
The company's initial product candidate, ArteFill, is currently under review by the FDA for the correction of facial wrinkles known as smile lines, or nasolabial folds.
One potential risk factor listed in the company's filing was the potential for dermatologists, plastic surgeons, cosmetic surgeons and other practitioners who administer ArteFill, as well as patients who have been treated with ArteFill to bring product liability and other claims against the company.
Specifically, the company noted that in August 2005, Elizabeth Sandor, an individual residing in San Diego, filed a complaint against the company and Drs. Gottfried Lemperle, Stefan Lemperle and Steven Cohen in the Superior Court of the State of California for the County of San Diego.
The complaint, as amended, set forth various causes of action against the company, including product liability, fraud, negligence and negligent misrepresentation.
The complaint also alleged that Gottfried Lemperle, the company's co-founder, former chief scientific officer and a former member of the company's board of directors, treated Sandor with Artecoll and/or ArteFill in violation of medical licensure laws, that the product was defective and unsafe because it had not received FDA approval at the time it was administered to Sandor, and that she suffered adverse reactions as a result of the injections.
In addition, the complaint alleged that Gottfried and Stefan Lemperle, the company's other co-founder, current CEO and a director, falsely represented to Sandor that the product had received an approvability letter from the FDA, and was safe and without the potential for adverse reactions.
In July 2004, the company said it received a letter from the FDA's Office of Compliance indicating that the FDA had received information suggesting that Artes may have improperly marketed and promoted ArteFill prior to obtaining final FDA approval. In addition, it received a Med Watch letter from the FDA on April 21, 2005, which included a Manufacturer and User Facility Device Experience Database, or MAUDE, report. The text of the MAUDE report contained similar facts as those alleged by the plaintiff in the Sandor litigation.
Cowen and Co. and Lazard Capital Markets will act as joint book-running managers of the proposed offering. Stifel, Nicolaus & Co. will act as co-manager of the proposed offering.
As of Dec. 31, 2005, the company said it has raised $34 million through private placements of preferred stock, $6.9 million in subscriptions for the purchase of Series E convertible preferred stock and $6 million through the issuance of convertible debt that remained outstanding as of Dec. 31, 2005.
In addition, as of March 31, the company said it raised an additional $36.1 million in a private placement of Series E convertible preferred stock. Since inception, the company said it has raised a total of $77 million through private equity financings. As of March 31 its cash and cash equivalents were $24.5 million.
Life Therapeutics (Sydney, Australia/Atlanta) said it has secured funding facilities of about A$35.3 million (US$26.88 million) with U.S.-based investment fund Cornell Capital Partners Offshore.
The funding consisted of a convertible loan of US$4 million, with funds to be used immediately to open five new collection centers.
It also included a standby equity line of credit facility of A$30 million available over five years to provide funding certainty for new opportunities as they become available.
“The US$4 million proceeds from the convertible loan will allow us to accelerate the opening of at least five new collection centers immediately,” said Dr. Hari Nair, CEO of Life Therapeutics. “In addition, the equity line represents a flexible funding option for the company moving forward.”
Life Therapeutics is an international company with 479 employees. The company's four divisions are all headquartered in Atlanta and include: Life Sera, Life Gels, Life Diagnostics, and Life Manufacturing.
Life Sera collects specialty plasma, including Anti-D and Hepatitis B from a donor base of more than 5,000 in fourteen U.S. collection centers. The plasma is then sold to blood fractionators who process it into hyperimmune therapeutic products.
Life Gels offers pre-cast gels for use in biological research and diagnostic testing, including a variety of electrophoresis systems. It also offers ultra-sensitive and rapid stains, molecular weight markers, and specially formulated buffers.
Life Diagnostics provides highly specific diagnostic tests for blood-clotting disorders and source plasma products for blood-borne diseases. Technologies include specialized blood coagulation tests to predict the risk of thrombosis and bleeding disorders. It also collects high-titer source plasma and serum used to make diagnostic kits.
Life Manufacturing incorporates the Gradiflow technology with the manufacture of therapeutic and diagnostic products. Gradiflow is a patented process that simultaneously purifies proteins and removes all viral pathogens, and infectious prion proteins.
In other financings activity:
• Mercator MedSystems (San Leandro, California), a privately held company focused on commercializing catheter-guided, microfluid infusion systems for site-specific delivery of therapeutic agents for applications to vascular disease, oncology and regenerative medicine, reported that it raised $2.25 million in a follow-on financing to advance clinical development of its MicroSyringe infusion catheter system, a new approach to delivering therapeutics that may revolutionize the treatment of a variety of diseases.
Led by Palo Alto Investors, the funding also came from existing investors that included Crocker Capital. Mercator also named Charles Crocker, of Crocker Capital, and A. Joon Yun, MD, a partner at Palo Alto Investors, to its board of directors.
According to Thomas Loarie, Mercator's chairman and CEO, the funds will be used to expedite the MicroSyringe's development aimed initially at treating restenosis, as well as to expand the product line to accommodate a range of blood vessel diameters. The financing also will be used to increase the number and scope of agreements with therapeutic companies seeking a safe method for delivering treatment directly to a disease site using the company's technology.
The MicroSyringe infusion catheter is a catheter-guided infusion system that incorporates traditional endovascular catheter technology with a balloon- deployable microneedle to deliver therapeutic agents anywhere in the body that can be accessed by a blood vessel. Cleared for marketing by the FDA, the device is designed to directly deliver drugs, stem cells, and genes to increase the therapeutic efficacy, yield, and safety of a variety of treatments.
• DaVita (El Segundo, California) has reported that it is seeking an amendment and restatement to its existing senior secured credit facilities primarily to reduce the margin over LIBOR that the company pays as interest under the existing Term Loan A and Term Loan B.
The outstanding balances on the senior secured Term Loan A and senior secured Term Loan B are about $279 million and $2,400 million, respectively.
The amendment and restatement will be led by J.P. Morgan Securities.
DaVita is a provider of dialysis services for patients suffering from chronic kidney failure. The company provides services at kidney dialysis centers and home peritoneal dialysis programs domestically in 41 states, as well as Washington. As of March 31, DaVita operated or managed more than 1,200 outpatient facilities serving about 98,000 patients.