A Medical Device Daily
Cardica (Redwood City, California) reportedthat the underwriters of its initial public offering (IPO) of 3.5 million shares of common stock have exercised their over-allotment option, purchasing 200,000 additional shares. Including the over-allotment shares sold, the offering totaled 3.7 million shares at $10 a share, resulting in net proceeds of about $32.6 million.
Cardica was the first pure device company to pursue an IPO this year, launching it in early February (Medical Device Daily, Feb. 6, 2006).
The company manufactures automated anastomotic systems used by surgeons to perform coronary artery by-pass grafting (CABG) surgery. Its first two products are the C-Port Distal Anastomosis System (C-Port) and the PAS-Port Proximal Anastomosis System. The C-Port system received the CE mark in April 2004 and FDA 510(k) clearance in November 2005.
The PAS-Port system received the CE mark in March 2003 and regulatory approval in Japan in January 2004. About 11 months ago, the FDA’s Circulatory System Devices Panel took a look at the device, made no formal vote on it, but recommended that the company develop more data to support regulatory clearance.
PAS-Port is distributed in Europe by Guidant (Indianapolis), which has invested roughly $14 million in Cardica over the past two years.
A.G. Edwards was the book-running manager for the IPO; Allen & Co. was co-lead manager and Montgomery & Co. co-manager.
In other financing activity:
• OrthoLogic (Tempe, Arizona) reported the formation of an alliance with pharmaceutical services organization Quintiles Transnational (Research Triangle Park, North Carolina), to develop and commercialize Chrysalin (TP508), OrthoLogic’s synthetic peptide.
Quintiles will be OrthoLogic’s exclusive provider of clinical research services for the development of Chrysalin and will have the right of first negotiation to promote Chrysalin, following FDA approval, with a specialty sales force.
The agreement also calls for Quintiles PharmaBio Development , the partnering group of Quintiles Transnational, to make an equity investment in OrthoLogic of up to $5 million, consisting of an initial $2 million investment in OrthoLogic common stock and two additional investments, at OrthoLogic’s election, of $1.5 million each at the end of 2Q06 and 3Q06.
OrthoLogic will issue warrants equal to 13% of the equity investment exercisable at a premium of 15% of the stock price at close of the deal, and incentive-based warrants for up to 240,000 shares, upon achievement of certain milestones.
“This alliance demonstrates Quintiles’ ability to provide a tailored package of financial and development solutions to help biotechs succeed,” said C.G. “Chip” Gillooly, global vice president of Quintiles’ Emerging Biotech business.
OrthoLogic will control all decisions on development and commercialization activities for Chrysalin; Quintiles representatives will serve on a joint development committee that will drive planning for the Chrysalin program.
OrthoLogic owns exclusive worldwide rights for Chrysalin and is developing Chrysalin (TP508) in two indications: fracture repair and diabetic foot ulcer healing.
• Cerus (Concord, California) unveiled plans to offer 4.5 million shares of its common stock in an underwritten public offering in accordance with a shelf registration statement previously filed with the Securities and Exchange Commission.
It will grant the underwriters an option to purchase another 675,000 shares to cover over-allotments.
The offering will be marketed by Robert W. Baird & Co. as book-running and co-lead manager of the offering, and JMP Securities as co-lead manager.
Cerus develops products in the areas of blood safety and immunotherapy. In blood safety, the company is developing the Intercept Blood System, based on the company’s Helinx technology, designed to enhance the safety of blood components. In immunotherapy, it is employing its Listeria vaccine platform to develop a series of therapies to treat cancer.
• The $6 million Indiana Seed Fund I reported that it has made its first investment, of $250,000, in SonarMed (Indianapolis), a company developing Smart Tubes, a line of “intelligent” breathing tubes designed to improve the care of patients who cannot breathe on their own.
The company said it would use the funding for market research, validation of product prototypes, preparation for FDA clearance and hiring of a full-time CEO.
The system uses sonar technology to determine endotracheal tube position within the patient’s airway while providing other information for tube monitoring. “Currently, there are no methods that can provide this information quickly, easily or cost-effectively,” according to a statement by SonarMed.
Greg Ayers, MD, PhD, a SonarMed advisor, said the technology provides “an early warning . . . that there is a problem with a patient’s breathing tube that could prevent adequate oxygen delivery.”
SonarMed technology initially was developed at Pur-due University (West Lafayette, Indiana), with the company formed in early 2005.
The Indiana Seed Fund, launched last June, is managed by BioCrossroads, an Indiana life sciences initiative, with funding coming from BioCrossroads, the Indiana Finance Authority and the Indiana Health and Educational Facility Financing Authority.
• Celsion (Columbia, Maryland) reported that its board has authorized a 1-for-15 reverse split of its common stock, approved by Celsion stockholders at its annual meeting on May 19, 2005. The reverse stock split was effective Feb. 28, when Celsion’s common stock began trading at the split-adjusted level.
Since its formation, Celsion initially has focused on the development of systems for treating diseases using focused-heat energy, either administered alone, or in combination with other therapeutic devices, heat-activated genes or heat-activated drugs.
Dr. Lawrence Olanoff, Celsion CEO, said, “This action marks the completion of another milestone in Celsion’s planned transformation from a medical device company into a fully integrated drug development company. We have demonstrated our ability to initiate and execute a development program for our heat-activated liposomal doxorubicin drug, ThermoDox, including starting human clinical studies in two cancer indications and the recruitment of an experienced drug development management team. However, we believe that these achievements as well as the successful commercialization of our Prolieve Thermodilatation system and the funding of the ThermoDox development program are not reflected in our current valuation.”
The number of Celsion shares issued and outstanding will be reduced from about 161.9 million shares to about 10.72 million post-split.