A Diagnostics & Imaging Week

Tm Bioscience (Toronto) reported that it has closed its previously announced debt financing resulting in the issuance of a secured convertible term note in the aggregate principal amount of $9 million (C$10.7 million) to Laurus Master Fund.

The note is secured by a first general charge over the company’s assets and carries a variable coupon interest rate of the greater of Wall Street Journal prime plus 2% and 8.5%.

The coupon rate will decrease in relation to increases in the company’s share price over the term of the note to a minimum interest rate of 0%. The note is repayable in equal principal installments plus interest over 32 months beginning next April, with three payments of interest only beginning in January.

Under certain conditions, Laurus will convert current and future principal repayments into common shares at an aggregate average conversion premium of 20% to the company’s five-day weighted average share price at closing.

As additional consideration for the loan, Laurus has been issued a common stock purchase warrant exercisable for 738,723 common shares of the company at a price of $2.61 per share and expiring five years from the date of closing.

“This transaction permits us to retire our existing debt, ensuring that we have suitable working capital to maintain momentum as we grow our business,” said Jim Pelot, CFO of Tm Bioscience. “Through the financing instrument we have chosen, we will ultimately shift the debt Tm incurred as an earlier stage company into equity as the company matures and gains further sales traction for its products.”

Tm Bioscience is a DNA-based diagnostics company developing a suite of genetic tests. Its product pipeline includes tests for genetic disorders, drug metabolism, and infectious diseases.

Naviscan PET Systems (San Diego), a privately held company that makes high-resolution positron emission tomography (PET) scanners, said it has completed a $6.5 million Series B round of financing, led by Sanderling Ventures. Mayo Medical Ventures also participated in the financing.

Proceeds from the financing will be used to further clinically validate and commercialize the company’s high-resolution PET scanner. The company said it also would use the proceeds to develop imaging agents, including several licensed from the Mayo Foundation for Medical Education and Research, affiliated with the Mayo Clinic (both Rochester, Minnesota).

Naviscan said the Mayo agreement would allow it to clinically validate and commercialize a dynamic patented molecular imaging agent for use with PET and other imaging modalities. Mayo Clinic has licensed the vitamin B-12 molecular imaging agent technology to Naviscan PET Systems, and will receive royalties from the license. Researchers at the Mayo Clinic have published studies that cancers have high uptake of radioactive B-12, especially in breast tumors.

Naviscan is planning clinical trial work with the Mayo Clinic and other sites in the U.S. to prove the value of the PEM Flex in breast cancer patients, as well as for evaluating PEM’s role with high-risk patients.

Naviscan PET Systems said it is the first company to obtain FDA clearance of a high-resolution PET scanner designed to image small body parts. The PEM Flex device was developed to help physicians and researchers diagnose and locate cancer, guide interventions, and advance new clinical therapies.

“The combination of proprietary molecular imaging agents and Naviscan’s high-resolution PET scanner presents a great market opportunity combining two patented technologies that will potentially yield the most effective early detection of cancer tumors,” said Paul Grayson, CEO of Naviscan. “We are excited to plan clinical trial work with the Mayo Clinic and other luminary sites in the U.S. to prove the value of the PEM Flex in breast cancer patients and to evaluate PEM’s role with high-risk patients.”

A managing director of Sanderling Ventures, Grayson also is the chairman of Naviscan’s board of directors. Other new board members include Timothy Mills, managing director at Sanderling Ventures, and Jeffrey Torborg, new ventures manager with Mayo Medical Ventures.

In other financing activities:

Guava Technologies (Hayward, California), a developer of cell-analysis systems for life science research, drug discovery, development and clinical diagnostics, reported the closing of a $7 million private venture financing from existing investors Abingworth Life Science Investment, Granite Global Ventures, HLM Venture Part-ners, MDS Capital, ProQuest Investments and Skyline Ventures.

“This is an exciting time for Guava. The growth of our programs is accelerating at a pace we believe will make Guava Technologies cash-flow positive within 12 months,” said Larry Bruder, Guava Technologies’ newly appointed CEO. “This growth stems from new product introductions, sales to new customer bases within the overall cell analysis market, and penetration of foreign markets as well. The current financing will enable us to continue our growth initiative, bringing us more rapidly to self sufficiency.”

Bruder was promoted to CEO recently after serving as president and chief operating officer. He also was elected to the company’s board of directors. Before joining Guava Technologies in 2004, Bruder served as vice president in the functional proteomics division of Applied Biosystems (Foster City, California) and at BD Biosciences (San Jose, California).

Adnavance Technologies (Vancouver, British Columbia), a privately held nanobiotechnology company, reported that it has completed a Series A round of financing totaling $3.85 million.

Combining biotechnology and nanotechnology, Adnavance is developing product applications that use the electrical conductivity properties of both DNA and metallic forms of DNA (M-DNA), for the healthcare and nanotechnology industries.

Adnavance said it also has secured substantial non-dilutive funding from the National Research Council’s Industrial Research Assistance Program (NRC-IRAP) and the Natural Sciences and Engineering Research Council of Canada (NSERC; both Ottawa), to support its research and development programs.

“This financing provides the company with a stable foundation for continued growth, enabling us to accelerate our lead product development programs on the healthcare diagnostics side of our business, and progress our efforts to produce prototypes for industrial applications,” said Dr. Henry Geraedts, CEO of Adnavance.

The investment syndicate for this financing was led by the Working Opportunity Fund, managed by GrowthWorks Capital, with additional financing support from BC Medical Innovations Fund, managed by MDS Capital; Canadian Medical Discoveries Fund, advised by MDS Capital; and the Business Development Bank of Canada.

The proceeds from the financing will be used to advance the company’s core M-DNA technology for a number of commercial applications, with a primary focus on the development of ultra-high-sensitivity biosensors, molecular detection devices used to improve medical diagnosis and predict disease outcome.

• Cytyc (Marlborough, Massachusetts), a women’s health company, reported that its board of directors terminated the company’s existing stock repurchase program and approved a new repurchase program.

Under the new program, the company is authorized to repurchase up to $200 million of its common stock. The repurchases will be made through open market purchases or private transactions that will be made from time to time as market conditions allow.

The new program is expected to be in effect for a maximum of four years. Shares repurchased under the new program will be held in the company’s treasury and will be available for a variety of corporate purposes.

Cytyc products cover a range of women’s health applications, including cervical cancerscreening, breast cancer risk assessment, treatment of excessive menstrual bleeding, and treatment of breast cancer.