Diagnostics & Imaging Weeks

A bit of financial maneuvering last week by biophotonic imaging specialist Xenogen (Alameda, California) has helped the firm secure fiscal footing that will move its business into the black.

On Friday, the company raised $15 million through a stock-and-warrant sale, just four days after securing $18 million in loans. Such added funding will supplement its existing fiscal reserves, which stood at $12.8 million as of June 30.

“This year, we saw that we had the potential to become profitable in 2006,” Xenogen President Pamela Contag told Diagnostics & Imaging Week’s sister publication, BioWorld Today. “Combined, these transactions will carry the company through to profitability and allow us to function so we don’t have to slow down any of our growth.”

Xenogen manufactures in vivo biophotonic imaging systems designed for speedier drug discovery and development. Its in vivo biophotonic system, the IVIS Imaging System, adds luciferase, which produces a light-emitting enzyme, into tumor cells. Highly sensitive cameras capture the emitted light, and its Living Image software helps rec-ord and analyze the data.

The company has licensed its imaging technology to such firms as AstraZeneca, Bayer, Chiron and Pfizer.

In May, Xenogen released an advanced 3-D software package that enables researchers to better analyze and track biological processes in living animals, non-invasively and in real time. The Living Image Software 3D Analysis Package features tools that enable the more accurate location of bioluminescent reporters, or glowing “tags” that light up targeted biological processes, in living animals.

The software introduces a 3-D analysis method called DLIT, which the company calls the first of its kind for determining the location, size and brightness of the bioluminescent reporters and thus, creating a more spatially accurate image.

DLIT processing takes place in two steps. First, a laser-scanned structured light image is acquired, which the software processes to determine the surface shape (or topography) of the animal. Second, a sequence of luminescent images is acquired through different light filters ranging in wavelength from 560 nanometers to 660 nanometers. Since the absorption of light in tissue is dependent on its wavelength, this spectrum or range helps spatially orient the location of the light source. Combined with the surface topography information, the software then analyzes and processes these images to determine the three-dimensional location and shape of the bioluminescent reporter.

The software, Xenogen said, is its first release in a developing platform of 3-D imaging capabilities.

Xenogen is moving forward aggressively these days. Several new product releases are scheduled for next month, including a 3-D imaging system to provide tomographic analysis of bioluminescent reporters in mice, in addition to related reagents and a tomographic software package.

Contag, who co-founded the business a decade ago, said she was pleased that the amount raised was equal to what had been sought. Proceeds will be used for working capital and general corporate purposes, including next month’s planned product launches.

The new funding “allows us a nice cushion of working capital,” Contag said.

Near-term profitability at the company, whose wholly owned Xenogen Biosciences subsidiary provides genetically modified custom mouse models, is evidenced by its latest quarterly financial report. Its revenue grew 30% to $9.7 million in the period ended June 30, while its net loss narrowed to $3.7 million. Contributing to the improved numbers were increased sales in all areas of the company’s business, including its VivoVision Systems that use real-time biophotonic imaging technology to explore genes, proteins, pathogens and tumor cells in living animals through the use of inserted bioluminescent genes that make fireflies glow.

Prior to the latest financial transactions, Xenogen had about 14.8 million shares outstanding. The company went public a year ago with a $29.4 million initial public offering.

“It’s been four quarters since our IPO,” Contag said, “and we’ve met our projected numbers each time. We’re pretty confident that we’ll continue to grow at a nice rate.”

3i (Menlo Park, California), a venture capital and private equity firm, in partnership with Sanderling Ventures, re-ported completing a $3 million Series A financing in Triage Wireless (San Diego). Financing proceeds will be used for R&D by Triage and pursuit of FDA regulatory clearance, 3i said.

Triage, founded in 2004, is developing the AdvancedBPM System that measures blood pressure along with other vital signs without using a cuff. AdvancedBPM System collects and transmits medical information wirelessly to a web site for continuous monitoring, alarms and connection into information management systems. A patch sensor is worn during a patient’s sleep and day-to-day activities and makes continuous, cuff-less measurements. A mobile device receives data from the sensor and wirelessly sends the data to a web site that provides physicians with information to aid in management of hypertension.

Its applications are for cardiac disease management, 24-hour ambulatory monitoring and in-hospital monitoring.

“Hypertension affects close to 90 million Americans, and about 1 billion individuals worldwide,” said David Aslin, partner with 3i, “but the shortcomings of conventional cuff-based blood pressure monitoring make it difficult to detect and monitor ... [Triage] has an extraordinary team with a platform that can be applied to multiple clinical applications.”

David Aslin, partner with 3i, and Tim Wollaeger and Tim Mills, managing directors with Sanderling, will join the Triage board.

Robert Murad, MD, head of internal medicine at Scripps Medical Clinic (La Jolla, California) and chief medical officer of Triage, said, “in the future, AdvancedBPM System may be used for patients with CHF, sleep apnea, pneumonia and cardiac arrhythmias.”

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