A Medical Device Daily

Cryoablation specialist CryoCor (San Diego) has provided details on its previously reported offering, saying it will offer 3 million shares at a range of $11 to $13, raising up to $39 million.

The offering – being managed by W.R. Hambrecht – was initially unveiled in April (Medical Device Daily, April 12, 2005), with its Securities and Exchange Commission (SEC) filing at that time indicating an offer for up to $46 million.

The company said that proceeds from the offering would be used to continue product development of its cryo- ablation technologies, including support for ongoing trials, build sales and marketing capabilities, provide working capital and for other corporate purposes.

CryoCor makes catheter-based products that treat cardiac arrhythmias. Its cryoablation system involves the insertion of a catheter into a blood vessel that connects with the heart. The catheter then delivers extreme cold to help the heart function normally. The cryoablation system has been approved in Europe; the company is conducting clinical trials in the U.S. for the treatment of atrial fibrillation and atrial flutter.

The shares will trade on the Nasdaq under the symbol CRYO.

In the company’s SEC filing, it enumerated a variety of risks related to approval of its products, none of which has been cleared by the FDA. And the company said it would need “separate FDA approval supported by a separate clinical trial for each proposed indication.”

The filing also noted the existence of “numerous U.S. patents owned or licensed by third parties in areas potentially related to the technology used in our cryoablation system.”

These third parties include CryoCath Technologies (Montreal), Johnson & Johnson (New Brunswick, New Jersey), the Regents of the University of California (Oakland, California) and Spembly Medical (Andover, UK). It specifically cited “statements” by employees of CryoCath, indicating that CryoCath “may believe that aspects of our cryoablation systems may be covered by one or more U.S. patents [related to cryosurgery] owned by CryoCath.” This offers the risk of expensive litigation, CyroCor said.

For 2004, CryoCor posted a net loss of $15.77 million, compared with a loss of $11.17 million for 2003.

MPM Capital controls about 40% of the company, which operates from offices in both the U.S. and Germany.

Life Science Angels (LSA; Palo Alto, California) reported that it has closed on its first three investments and met its mid-year funding goal, having invested a total of $1 million.

“We set out to build the premier life science angel group actively funding early stage biotechnology and medical device companies,” said Allan May, chairman of LSA. “With the closing of our first three investments, we are pleased to say we are on a course to accomplish exactly that.”

The companies receiving early-stage capital from Life Science Angels are: Athenagen, Pegasus Biologics (Irvine, California) and Uptake Medical (Seattle).

Athenagen is developing therapeutics to treat disorders of inadequate or pathological angiogenesis. Athenagen was founded by scientists at Stanford University (Palo Alto, California) who discovered a new pathway for angiogenesis. LSA advised the company and participated in the seed funding.

Pegasus Biologics is developing bio-implants for use in soft tissue reinforcement for orthopedics, sports medicine, neurosurgical and spine applications. Its UltiFix and UltiSter technologies have applications for the stabilization and sterilization of biological tissue, of animal or human origin for use in orthopedic, spine and neurological applications. LSA participated in this $10.2 million Series B funding with Three Arch Partners and Frazier HealthCare Ventures.

Uptake Medical is focused on treatments for emphysema and chronic obstructive pulmonary disease. It is developing a bronchoscopic lung volume reduction treatment aimed at improving lung function. LSA participated in the angel round.

Founded by senior life science executives and angel investors and formally launched in January, LSA has the backing of 15 industry sponsors, including BC Tech (Santa Cruz, California), Boston Scientific (Natick, Massachusetts), Genentech (South San Francisco, California), Pricewater-houseCoopers and Silicon Valley Bank.

In other financing activity, LTC Properties (Malibu, California) said it has agreed to sell 1.5 million common shares in a registered placement to institutional investors, expecting to receive net proceeds of about $32.6 million. The sale is slated to close on Friday. Prior to closing the company had nearly 21.65 million shares outstanding.

LTC said it would use the proceeds for general corporate purposes, including investments in and acquisitions of healthcare properties and the funding of mortgage loans secured by healthcare properties.

Cohen & Steers Capital Advisors acted as placement agent.

The company is a self-administered real estate investment trust investing primarily in long-term care and other healthcare facilities through mortgage loans, facility lease transactions and other investments.

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