A Medical Device Daily
CardioDynamics (San Diego), a developer of impedance cardiography (ICG) technology, reported its intent to sell $4 million in convertible debt securities to its largest institutional shareholder.
The company also reported that it will reduce, early in the second quarter, support services, operations and research staff totaling about 12% of ICG personnel to “better balance operating expenses with current revenue levels.“
The company said it expects to save about $3 million in 2006 expenditures through the work force reduction, not filling previously open positions and the deferral of certain project expenses.
The company said that the three-year, subordinated convertible note will bear interest at 8% annually and converts into common stock at $1.15 a share. The investors will have the right to make a follow-on investment of $1.25 million in subordinated convertible notes within 18 months of closing at $1.40 a share.
In other financing activity:
• StemCells (Palo Alto, California) reported closing the sale of 11.75 million shares of its common stock to a limited number of institutional investors at $3.05 a share, for gross proceeds of $35.8 million.
The shares were offered as a direct offering under the company's SEC shelf registration.
StemCells said it received net proceeds of about $33.2 million to be used for working capital, product development and capital expenditures.
Martin McGlynn, president and CEO of StemCells, said, “We have an extensive agenda as we work to expand the clinical applications of our neural stem cell and advance our liver program into clinical development. . . Over the next several years, we look to complete our Phase I clinical trial for HuCNS-SC in Batten disease, to initiate clinical trials in additional neural indications, and to initiate a clinical trial with our candidate liver stem cell.“
StemCells is a clinical-stage biotech developing stem cell-based therapies to treat diseases of the nervous system, liver and pancreas. Its programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury.
• Health Management Associates (HMA; Naples, Florida) reported that due to market conditions, it is discontinuing its planned offering of $400 million of senior notes maturing in 2016, previously reported on April 4. HMA said it is continuing to explore alternative long-term financing arrangements.
HMA owns and operates general acute care hospitals in non-urban communities located throughout the U.S.
Upon completion of the previously reported transaction to acquire the 83-bed Cleveland Clinic Naples Hospital (Naples, Florida) from the Cleveland Clinic (Cleveland) (Medical Device Daily, Jan. 25, 2006), HMA will operate 61 hospitals in 16 states with about 8,628licensed beds.
Altus HealthCare (Palm Desert, California) reported a 5-for-1 forward stock split effective April 13, the action enabling it “to move forward“ with its business model.
Altus provides administrative and patient focused services to healthcare.
It defines its focus as “on the health and wellness vertical, targeting elective weight loss surgery, cosmetic surgery and those forms of outpatient surgery conducive to ambulatory surgery centers.“
• Allergan (Irvine, California) reported the pricing of the previously disclosed concurrent private placements of $700 million aggregate principal amount of 1.50% convertible senior notes due 2026 and $800 million aggregate principal amount of 5.75% senior notes due 2016 (MDD, April 7, 2006).
The company estimates net proceeds from these offerings at about $1.48 billion after deducting discounts, commissions and estimated expenses (or $1.53 billion if the initial purchasers exercise their over-allotment option in full).
The company said it expects to use the net proceeds from the offerings of the convertible senior notes and the senior notes, along with cash from its balance sheet, to repay the roughly $825 million outstanding under the bridge credit facility it entered into in connection with its acquisition of Inamed (Santa Barbara, California) on March 23, pay transaction expenses from its acquisition of Inamed, redeem its currently outstanding zero coupon senior convertible notes due 2022, and purchase about $257.8 million worth of shares of its common stock (or $307.8 million if the initial purchasers exercise their over-allotment option in full), some of which may be purchased contemporaneously with the closing of the sale of the convertible senior notes, including through private block trades with one or more of the initial purchasers and/or their affiliates.
Allergan develops products in the ophthalmology, neurosciences, medical dermatology, medical aesthetics and other specialty markets.
Frontier offering oxygen concentrators
Frontier Airlines (Denver) reported that it is allowing passengers who need access to oxygen to utilize portable oxygen concentrators (POCs) on all of its more than 260 daily flights in the U.S. and Mexico. The policy follows a Special Federal Aviation Regulation, issued in 2005, allowing users of therapeutic oxygen to use an approved POC in the cabin of an aircraft during all phases of flight, if necessary.
Currently, only the Inogen (Goleta, California) One and AirSep (Buffalo, New York)Lifestyle POCs have been approved by the FAA for in-flight use. Frontier said it chose to certify use of POCs because previously, there were only limited and very costly options for supporting passengers who required oxygen in flight.