A Medical Device Daily

CardioFocus (Boston), a private company focused on developing catheter products for the treatment of atrial fibrillation (AF), reported that it has raised a $21.5 million Series C round to propel the performance of a U.S. pivotal trial for its endoscopically guided catheter ablation system.

H.I.G. Ventures and KBL Healthcare Ventures led the round, joined by new investors Accuitive Medical Ventures and The Aurora Funds, as well as existing investors Oxford Bioscience Partners and SV Life Sciences.

Triggered by rapidly firing stimuli or premature beats arising from within the pulmonary veins, AF is the most common cardiac arrhythmia affecting about 2.3 million people in the U.S. and 4.5 million people in the developed world.

Patients suffering from AF have a severely reduced quality of life and face significantly higher risk of stroke, heart failure and death.

“The effective catheter treatment of [AF] is one of the single biggest unmet needs in the field of cardiology, representing a $2 billion market opportunity,“ said Bruce Robertson, PhD, managing director of H.I.G. Ventures. “CardioFocus has developed a novel device for treating this debilitating condition. The company's management team has significant experience in the field of electrophysiology, and we believe their system will greatly improve the lives of those who suffer from [AF].“

CardioFocus's endoscope, catheter and sheath technology uses adjustable arcs of light energy that can be optimally shaped and individually targeted to each vein's anatomy. The CardioFocus catheter can visualize and isolate pulmonary veins, essential for the treatment of AF, in a procedure expected to take less than two hours, unlike competitive RF energy procedures that can take up to six hours, even in the most experienced hands. To date, the company has treated more than 20 patients in an ongoing feasibility study with excellent acute and chronic results.

New abstracts on the company's clinical progress will be presented at the annual meeting of the Heart Rhythm Society (Washington) May 17-20 in Boston.

“The CardioFocus ablation procedure promises superior efficacy and safety in comparison to competitive devices,“ said Marlene Krauss, MD, managing director and co-founder KBL Healthcare Ventures. “The integral endoscopic visualization gives a remarkable view of the area to be treated and, as a result, will enable a higher cure rate with fewer complications. In addition, the procedure is less complicated and time consuming, which will aid in the adoption by a broader spectrum of electrophysiologists.“

As a result of the financing, Robertson, Krauss, Chris Kroeger, MD, principal for The Aurora Funds, and Charles Larsen, managing director for Accuitive Medical Ventures, will take seats on the CardioFocus board.

Natus Medical (San Carlos, California) reported filing a shelf registration statement with the SEC to register future sales of up to $100 million of Natus common stock. Terms of any future offerings would be determined at the time of any future offering.

Jim Hawkins, president and CEO of Natus, said the company would likely use the proceeds from any offering for general corporate purposes, including acquisitions and working capital, and to reduce debt.

The company said it has no specific plans to issue any securities under the registration statement at this time, and no current commitments or agreements for any specific acquisitions.

The company also said that, pursuant to the exercise of contractual registration rights, it has registered 600,000 shares of Natus common stock that the D3 Family Funds acquired from Natus in October 2005.

Natus is a provider of healthcare products used for screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, newborn jaundice and newborn metabolic testing.

In other financing activity:

• CABG Medical (Minneapolis) reported that it anticipates aggregate cash payments to shareholders of between $1.47 and $1.51 per share pending approval of the company's plan of liquidation and dissolution.

The company halted R&D efforts in February related to its primary product, the Holly graft system, a drug-eluting graft for facilitating a coronary artery bypass procedure (Medical Device Daily, Feb. 10, 2006). It then shut down development efforts for the Holly graft system because of problems found with the product during clinical trials.

Last August the company delayed the launch of clinical trials designed to support CE-marking after it said that the first two of the Holly graft devices implanted in patients in Australia had become occluded (MDD, Aug. 8, 2005). It then reported in September that it restarted the European trial after having made what it called fairly simple corrections in the surgical approach.

It also developed a new process for spraying on the heparin coating used in the device, with that improvement resulting in a more uniform application, it said. Changes in the anticoagulation regimen for patients in the trial, primarily the addition of warfarin, were also made.

In November, however, the company reported that preliminary results in the initial arm of its trial (with 36 patients) of the system had not met the expectations for supporting regulatory approval (MDD, Nov. 28, 2005).

It then suspended further enrollment in the trial, saying that in a group of eight patients treated with an anti-coagulant regimen of aspirin and warfarin, two grafts from that group had occluded prior to patient discharge (MDD, Nov. 29, 2005).

“We have taken swift measures to cut our costs and maximize cash available to shareholders,“ said Manny Villafana, the company's chairman and CEO. “These efforts allow us to revise our range of the potential distribution to shareholders upward. We remain focused on the activities of winding down CABG Medical and will work diligently to ensure financial resources are preserved for distribution to shareholders.“

Upon approval of the plan, the company will close its stock transfer books at the opening of business April 28, and its shares will no longer trade on the Nasdaq.

All shareholders of record at the time the transfer books are closed will be eligible for liquidating distributions.

• Boston Scientific (Natick, Massachusetts) reported that it has increased the interest rate payable on its $400 million 5.50% senior notes due Nov. 15, 2015 and its $350 million 6.25% senior notes due Nov. 15, 2035 each by 0.75%.

The interest rate increase will accrue from Nov. 17, 2005. The company elected to adjust the interest rates due to the closing of the company's acquisition of Guidant (Indianapolis) last week (MDD, April 21, 2006).