A Diagnostics & Imaging Week
InSight Health Services (Lake Forest, California), a nationwide provider of diagnostic imaging services, reported that it intends to offer, subject to market and other conditions, $250 million principal amount of its senior secured floating rate notes in a private offering.
InSight will use the proceeds from the offering to repay all indebtedness under its existing credit facility, pay related fees and expenses and for general corporate purposes. If the principal amount of the offering is increased, InSight contemplates using the additional proceeds to purchase a portion of its existing 9-7/8% senior subordinated notes due 2011 in one or more privately negotiated transactions.
Mediscience Technology (Cherry Hill, New Jersey) reported that it has engaged the services of a U.S. investment banking firm as its exclusive placement agent for a proposed private placement on a “best efforts” basis of between $6 million and $10 million. The private placement is expected to commence during 4Q05.
Mediscience CEO Peter Katevatis said, “We intend to use the net proceeds of the proposed private placement to fund our ingestible optical biopsy capable ‘Camera Pill,’ designed to distinguish cancerous, pre-cancerous, or benign tissues from normal tissue, and initiate FDA clinical trials for our CD Ratiometer, a medical device designed to detect cervical cancer on a molecular level and for general corporate purposes.”
Mediscience and its subsidiary, Mediphotonics Development (New York), develop medical devices that detect cancer and physiological change using frequencies of light that are emitted, scattered and absorbed to distinguish malignant, precancerous, or benign tissues from normal tissues. Mediscience’s protected noninvasive technology combines the advantages of real-time results with enhanced diagnostic sensitivity and specificity compared with other methods of cancer detection.
CLX Investment (Temecula, California) reported that it has “targeted” Zonda (Moraga, California), a diagnostic firm, as its “next potential portfolio investment.”
Zonda develops products serving the medical, bacterial food testing and environmental surfaces testing markets. In 2003, it introduced its self-contained HandiLab rapid test for infectious diseases, which the company markets as superior to competitors in terms of cost, “ease of use, compact design, long shelf-life, rapid results and comparable accuracy.”
“Zonda is estimating significant penetration for its products in markets around the world, particularly in Europe and Asia,” said Tammy Dunn, CEO of CLX. “CLX is completing a thorough due diligence process on this company, with a focus on submitting an investment proposal to the board of directors in the very near future.”
CLX said it seeks to acquire and invest in developing companies. It has acquired a 49% interest in eStrategy Solutions and has recently made an investment in ActionView International, a publicly traded electronic advertising firm.
In other financing activity:
• InforMedix Holdings (Rockville, Maryland) reported that it closed on interim convertible debt financing of $650,000, and that it has entered into a term sheet agreement with a private investment fund for additional equity financing of up to $4 million.
Proceeds from the proposed equity financing will be used to fund the manufacturing of additional Med-eMonitor System devices as the sales pipeline builds, expand sales and marketing activities, and general working capital purposes.
Dr. Bruce Kehr, chairman and CEO, said, “The Med-eMonitor System, InforMedix’ device for improving medication and plan adherence and reducing costs in disease management and clinical drug trials markets, has consistently achieved medication adherence rates of greater than 90% in a variety of clinical settings. As a result, the device is gaining traction in the disease management marketplace, requiring the need to manufacture additional Med-eMonitor devices as our sales pipeline builds.”
InforMedix has developed the Med-eMonitor System as a medication adherence solution for clinical drug trials and disease management markets. It has integrated a portable patient-interactive monitoring device, hardware, software and networked communications system to enable pharmaceutical and biotechnology companies, medical resear-chers, and disease management programs to monitor and manage patients’ medication compliance, protocol adherence, clinical response, and drug safety.
• Biophan (West Henrietta, New York) reported that Biomed Solutions (also West Henrietta), a longtime investor and supporter of Biophan, has made a $1 million equity investment in the company. Biophan CEO Michael Weiner is the manager of Biomed Solutions. The investment represents the conversion of a portion of a recently disclosed $2 million credit facility from Biomed Solutions. The conversion price of $2.12 is calculated at 90% of the average share price for the 20 trading days prior to the date of the loan.
“We’re pleased to announce this transaction, which reflects the continued success of Biophan’s strategic vision and track record in execution of its business plan,” said Weiner. “The transaction converts debt to equity in Biophan, enhancing Biophan’s financial standing and balance sheet at a time when the company’s contributions to biomedical technology and healthcare have begun to transfer from the laboratory to the marketplace, evidenced in part by the recent technology license agreement with leading medical device manufacturer Boston Scientific [Natick, Massachusetts].”
Biophan develops technologies designed to make biomedical devices safe and image-compatible with the magnetic resonance imaging (MRI) environment. The company develops technologies that enable implanted medical systems such as pacemakers, interventional surgical devices such as catheters and guidewires, and devices such as stents to be safely and effectively imaged under MRI.
• Molecular Diagnostics (MD; Chicago) reported that since being named CEO, Dr. David Weissberg has increased his holdings in the company by 1.75 million shares. Weissberg, who replaced Denis O’Donnell, MD, as president and CEO as part of a company restructuring, said that he “truly believe[s] in the company’s technology and look[s] forward to communicating with shareholders about the ongoing progress being made.”
Molecular Diagnostics develops cancer-screening systems, which can be utilized in a laboratory or at the point of care, to assist in the early detection of cervical, gastrointestinal and other cancers. The InPath System is being developed to provide medical practitioners with a highly accurate, low-cost, cervical cancer-screening system that can be integrated into existing medical models or at the point of care.