A Diagnostics & Imaging Week

Minrad International (Buffalo, New York) reported completing the sale of somewhat more than $7 million of convertible preferred stock and warrants in a private placement. KeyBanc Capital Markets and Chadbourn Securities acted as co-placement agents.

Minrad said it plans to use the estimated $5.6 million in net proceeds from the offering to expand its anesthesia and analgesia plant in Bethlehem, Pennsylvania; to launch and support new real-time image guidance products; to develop a conscious sedation system; repay certain outstanding indebtedness and obligations; and for other working capital and general corporate purposes.

The company issued 7,035 shares of preferred stock, convertible into somewhat more than 3.51 shares of common stock, together with three-year warrants to purchase another 1,758,750 shares of common stock at a price of $3.85 a share. The preferred stock has a quarterly dividend of 6%, payable in cash or common stock, and is subject to mandatory conversion or redemption at the option of the company after four years.

Minrad is an acute-care company with product lines in real-time image guidance and anesthesia and analgesia. The real-time image guidance products have applications in orthopedics, neurosurgery, interventional radiology and pain management. These devices are designed to enable medical professionals to improve the accuracy of interventional procedures and reduce radiation exposure, according to Minirad.

The company additionally makes generic inhalation anesthetics for use in connection with human and veterinary surgical procedures. It reports that it also is developing a drug/drug delivery system for conscious sedation, which — similar to nitrous oxide in dental surgery — provides a patient with pain relief without loss of consciousness.

The Life Sciences Greenhouse of Central Pennsylvania (LSGPA; Philadelphia) reported an investment of $250,000 in Hanson Technologies (Carlisle, Pennsylvania), a company that will develop integrated biological and chemical sensors applicable in multiple markets.

Funds will be matched by other investors and used to complete technology development and a cooperative research and development agreement between the United States Naval Research Lab (Washington) and Hanson Technologies.

This is the second investment in Hanson Technologies by LSPGA, which had previously invested $100,000 for development of a live-blood test for bovine spongiform encephalopathy (BSE) in July 2004. Hanson Technologies has successfully demonstrated biological detection of BSE prion surrogate.

Hanson Technologies is developing an integrated biological and chemical sensor from patent-accepted technology and a licensed technology from the Naval Research Lab. The sensor technology platform has multiple applications including food safety testing, blood diagnostic markets and agricultural testing markets.

In other financing news:

BioMed Realty Trust (San Diego) reported receiving a $600 million loan with KeyBank Real Estate Capital (Cleveland) as the administrative agent and lead arranger. The loan included a three-year, $250 million senior unsecured revolving line of credit; a three-year $100 million senior unsecured term loan; and a five-year, $250 million senior secured term loan.

BioMed Realty Trust is a real estate investment trust focused on acquiring and developing and managing laboratory and office space in the life sciences.

With the acquisition, BioMed's real estate portfolio now totals 32 properties, representing 55 buildings with about 4.2 million rentable square feet in all of the major life science markets in the U.S.

The transaction was structured to fund BioMed's acquisition of a portfolio of properties with cash and helped to nearly double the company's balance sheet size to about $1.2 billion. Proceeds from the transaction were used primarily to complete several purchases, including BioMed's previously reported purchase of a portfolio of seven properties and one parking structure in Cambridge, Massachusetts, and an additional property in Lebanon, New Hampshire, from the Lyme Timber Co.

The total purchase price was about $523.6 million, excluding closing costs, and was paid in cash and the assumption of about $131.2 million of indebtedness. In addition, the proceeds from the transaction were used to retire BioMed's existing $100 million senior unsecured line of credit and will provide for future working capital purposes.

KeyBank Real Estate Capital, which posted nearly $19 billion in annual financings last year, is the commercial real estate division of KeyCorp (Cleveland).

BioMed Realty Trust is a real estate investment trust (REIT) focused on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry. The company's tenants include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry.

BioMed's current properties and primary acquisition targets are in markets with well established reputations as centers for scientific research, including Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey.

"We are particularly pleased that BioMed selected us to lead a loan syndication of this magnitude," said Scott Childs, a senior relationship manager at KeyBank Real Estate Capital who served as the lead lender on the deal. KeyCorp is one of the nation's largest bank-based financial services companies, with assets of about $90 billion.

Grant Life Sciences (Murray, Utah) reported entering into an agreement with an accredited investor, providing it $2 million in connection with the sale of 10% callable secured convertible notes. Grant said it has received initial gross proceeds of $700,000 under this facility and that it will receive an additional $1.3 million in gross proceeds upon the filing and the effectiveness of a registration statement covering the common stock underlying the notes and warrants.

"This cash infusion is very significant at this stage in the evolution of Grant Life Sciences," said Stan Yakatan, chairman and CEO. It allows the company, he said, "to begin executing our plans to generate revenues from our AccuDx product line, and it allows us to substantially advance development of our cervical cancer blood test."

The test — or immunotest — involves antibodies especially associated with HPV-caused neoplasias or cancers that are detected with synthesized, proprietary peptides or amino acid sequences derived from certain proteins in HPV.

Earlier this year, Grant entered into an agreement with AccuDx (La Jolla, California), a biotech firm founded by Ravi Pottathil, PhD, an authority on HIV/AIDS diagnostics and therapeutics. Under the accord, Grant owns the exclusive rights to AccuDx's rapid tests for HIV-1, HIV-2 and Dengue fever, as well as AccuDx's colloidal gold reagent.

The agreement also establishes the right for Grant to manufacture these products in AccuDx's "maquiladora"-modeled contract facility in Tijuana, Mexico.

Grant this year also announced agreements with two cervical cancer researchers — Mark Dodson, MD, and Andrew Soisoon, MD — to determine the utility of its cervical cancer diagnostic. They will be co-principal investigators in a newly IRB-approved clinical study through Inter-mountain Health Care (Salt Lake City), to determine the clinical utility of Grant's serum-based diagnostic test for cervical dysplasia and cancer.

Grant said that the diagnostic assay it is developing has initial clinical validation indicating superior sensitivity and specificity in detecting cervical cancer and its precursors.

Biophan Technologies (West Henrietta, New York) said it has finalized an exclusive license with two German biomedical researchers, Drs. Arno Bucker and Alexander Ruebben, for their stent technology enabling accurate MRI in or around metallic stents. Financial terms were not disclosed.

As a company, Biophan is based on the fact that MRI has not been able to visualize the interior of metallic stents, because current generations of stents create image artifacts and do not allow visualization of the stent lumen. Procedures such as MR vessel wall imaging and plaque imaging are not possible in the stented vessel segments.

The new technology, developed at the radiology department at the University Hospital (Aachen, Germany), uses a special design and material. The imaging of stent interiors by traditional X-ray angiography requires an invasive procedure and only allows visualization of the vessel lumen.

Biophan's newly licensed solution is designed to enable non-invasive, safer, less costly and more useful MRI-based imaging of stent interiors and the adjacent vessel walls. One possible additional advantage is that molecular research on the effects and physiology of drug-eluting stents could be carried out non-invasively by MRI.

Together with the existing technologies already held by Biophan, including those obtained through the company's recent acquisition of Amris (Castrop-Rauxel, Germany), the exclusive license with Bucker and Ruebben will give Biophan licensing ownership to two of what it said are the most promising methods to create artifact-free images of stents and implants with MRI systems.

"The technologies are very synergistic and the combination could prove to be very beneficial," commented Michael Friebe, PhD, CEO of Biophan Europe. "We now have the only proven methods for non-invasive imaging of stent performance."

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