Cardiovascular products manufacturer Cardica (Redwood City, California) is the first pure device company to enter the initial public offering waters in 2006, last week pricing 3.5 million shares of its common stock at $10 per share.
All of the common stock is being offered by the company. It also granted the underwriters a 30-day option to purchase up to another 525,000 shares to cover over-allotments, if any.
Cardica manufactures proprietary automated anastomotic systems used by surgeons to perform coronary ar-tery bypass graft (CABG) surgery. The company's first two products are the C-Port Distal Anastomosis System (C-Port) and the PAS-Port Proximal Anastomosis System (PAS-Port).
The C-Port system was FDA 510(k)-cleared in November 2005 after receiving CE-marking in April 2004. The PAS-Port system is not yet FDA-approved, but has CE marking and market approval in Japan.
The company says that its products minimize trauma to both the graft and target vessel in coronary artery bypass grafting procedures, thus serving as alternatives to hand-done suture procedures. "Our C-Port system creates compliant anastomoses, which potentially allow the shape and size of the anastomisis to adapt to changes in blood flow and pressure," the company says in its Securities and Exchange Commission filing.
The long line of standard risks cited by the company includes the termination of prior agreements with Guidant (Indianapolis) "which represented 75% of our revenue in fiscal year 2004 and 65% of our revenue in fiscal year 2005."
Under the category of regulatory concerns, Cardica says that because of problems with a previous automated proximal anastomosis device from another manufacturer, that company withdrew its device from the market in 2004.
"Because of the FDA's experience with this prior device, the FDA has identified new criteria for the clinical data needed" to obtain approval for devices such as the PAS-Port, Cardica said in its filing. "We may not be able to show that the PAS-Port satisfies these criteria, and we may therefore be unable to obtain FDA clearance or approval to market the device in the U.S."
The company has begun trading on the Nasdaq under the symbol CRDC.
A.G. Edwards is the sole book-running manager. Allen & Co. is co-lead manager and Montgomery & Co. is a co-manager.
In other financing activity:
• Celsion (Columbia, Maryland) reported that, in accordance with the terms of an agreement reached last August, Boston Scientific (Natick, Massachusetts) has advanced the second installment of a $15 million loan to Celsion. This second installment of $4.5 million increases the amount drawn down under the loan to $10.5 million.
Subject to fulfillment of agreed milestones the final installment of the loan may be drawn down on May 1.
Among other products, Celsion manufactures the Prolieve Thermodilatation system for the treatment of benign prostatic hyperplasia and Thermodox, a heat-activated liposomal encapsulation technology used in cancer treatment.
Dr. Lawrence Olanoff, president and CEO of Celsion, said that release of the loan installment shows Boston Scientific's "continuing satisfaction with the progress that has been made with Prolieve. If Boston does not exercise their option to purchase the Prolieve assets prior to disbursement of the final installment of the loan, we believe that based on current plans, our cash on hand . . . should be sufficient to bridge us through to the initiation of late-stage clinical studies of ThermoDox in combination with radio frequency ablation for the treatment of liver cancer."
Celsion reports having research, license or commercialization agreements with institutions such as the National Institutes of Health (Bethesda, Maryland), Duke University and the Duke University Medical Center (Durham, North Carolina); Massachusetts Institute of Technology (Cambridge); Harbor UCLA Medical Center (Los Angeles); Montefiore Medical Center and Memorial Sloan-Kettering Cancer Center (both New York); and Roswell Park Cancer Institute (Buffalo, New York).
• HealthSouth (Birmingham, Alabama) reported that as a component of its recapitalization plan, it is commencing a cash tender offer for any and all of various securities.
The company is offering to purchase the notes listed for sale at $1,000 principal amount of each series of notes, equal to the applicable price set forth.
HealthSouth is soliciting consents to proposed amendments to each of the indentures governing the notes, which would eliminate substantially all of the restrictive covenants and amend certain events of default.
Holders who tender on or prior to the consent payment deadline will receive the total consideration, which includes a payment per $1,000 principal amount of each series of notes equal to the applicable consent payment set forth in the table above. The consent payment deadline is 5 p.m., EST, Feb. 15.
The tender offer is set to expire at midnight, EST, March 2, unless extended or terminated. Holders who tender their notes will receive payment on or about March 3, unless extended or earlier terminated, and also will receive accrued and unpaid interest from the last interest payment date to the date the holders receive such payment.