A Medical Device Daily
Advanced Medical Optics (AMO; Santa Ana, California), a maker of eye-care products and surgical devices, reported the pricing of a private offering of $150 million principal amount of its 1.375% convertible senior subordinated notes, due 2025.
The notes will be unsecured senior subordinated obligations of AMO and will pay interest semiannually at an annual rate of 1.375%. The sale of the notes is expected to close July 18, subject to customary conditions.
Prior to June 1, 2011, the notes will be convertible, only upon specified events, at the option of the holder into cash and, in certain circumstances, shares of AMO’s stock at an initial conversion price of about $47.60 a share (or an initial conversion rate of 21.0084 shares per $1,000 principal amount of notes).
On or after June 1, 2011, the notes will be convertible prior to maturity at the option of the holder into cash and, in certain circumstances, shares of AMO’s stock at the initial conversion rate, subject to adjustment.
The initial conversion price represents a 12.53% premium to the $42.30 a share closing price of AMO’s common stock on The New York Stock Exchange on July 12, 2005. Beginning July 6, 2011, AMO may redeem any of the notes at a price of 100% of their principal amount.
AMO said it will use the proceeds to repay its outstanding term loan under its senior credit facility.
Solexa (Hayward, California) reported completing a private placement of about $24 million following stockholder approval of the financing at the annual meeting of stockholders July 7. The financing represented the second and final closing of the $32.5 million private equity placement announced in April.
The second closing included the sale of about 6 million shares of common stock at $4 a share and issuance of warrants to purchase up to around 3 million shares of common stock at $5 a share.
The first closing of the placement, completed April 25, generated proceeds of about $8.5 million from the sale of roughly 2.1 million shares of stock and 1.1 million warrants.
Solexa’s prior venture capital investors Abingworth Management, Amadeus Capital Partners, Oxford Bioscience Partners and SV Life Sciences invested a total of close to $10.8 million at the second closing. SG Cowen & Co. served as the exclusive placement agent for the transaction.
Stockholders also elected seven nominees to serve on the Solexa board, including three affiliated with the company’s venture investors and one with ValueAct Capital, the lead investor in the financing.
Solexa is developing a platform for genetic analysis, based on Sequencing-by-Synthesis and Cluster molecular arrays. This platform is expected to support many types of genetic analysis, including DNA sequencing, gene expression, genotyping and micro-RNA analysis, the company said, describing its goal as to reduce the cost of human re-sequencing to a few thousand dollars in applications ranging from basic research through clinical diagnostics. The company anticipates launch of its SBS-Cluster genetic analysis instrument system by the end of 2005.
In other financing activity:
• Inovio Biomedical (San Diego) said it will receive a $2 million milestone payment from Merck & Co. (Whitehouse Station, New Jersey) resulting from the achievement of a clinical milestone by Merck for a plasmid-based vaccine using Inovio’s MedPulser DNA delivery system.
The milestone relates to Inovio’s license and collaboration agreement with Merck that was initiated in May 2004 for the development of certain DNA vaccines. Further development of the product may lead to additional milestone payments and royalties to Inovio, that company said.
Inovio will receive this milestone payment for its contribution to the collaboration, which has demonstrated the high level of gene delivery and expression that is thought to be necessary for the induction of a therapeutic immune response. Merck has funded all clinical development costs of this product to date.
Inovio is a late-stage biomedical company focused on building an oncology franchise based on its electroporation therapy. The therapy is designed to selectively kill cancer cells and locally ablate solid tumors while preserving healthy tissue.
• Kaydon (Ann Arbor, Michigan) reported completion of a new $300 million unsecured five-year revolving credit agreement. The new facility amends Kaydon’s previous $200 million credit agreement which had a maturity date of July 2006.
JP Morgan Securities and Wachovia Capital Markets are lead arrangers of the new credit facility provided by seven banks.
Kaydon may increase the amount of the agreement up to $350 million. The credit agreement provides for borrowings by the company and its subsidiaries in various currencies for general corporate purposes including acquisitions. No borrowings, other than $4.2 million for letters of credit, are initially owing under the agreement.
Kaydon manufactures custom products supplying a range of medical, industrial, aerospace and electronic equipment, and aftermarket customers.
• SurModics (Eden Prairie, Minnesota) and CardioMind (Sunnyvale, California) have entered into a license agreement for the use of SurModics’ Encore drug delivery polymer matrix with CardioMind’s ultra low-profile stent system for the treatment of coronary and peripheral artery disease. Terms of the deal were not disclosed.
The CardioMind stent delivery system is designed for complex lesion applications where standard-sized stent delivery technologies have difficulty reaching.
The companies said they have worked closely to improve SurModics’ Encore system to meet the requirements of CardioMind’s design, and that the polymer system “will provide excellent drug elution performance.”
“The ability to easily access and accurately deliver stents under conditions, where others cannot, are the key benefits of CardioMind’s technology,” said Julian Nikolchev, CardioMind’s founder and CEO. “CardioMind chose to partner with SurModics in order to bring a drug-eluting version of our stent to market as quickly as possible.”