A Medical Device Daily

Corgenix Medical (Denver) reported completing new financing with potential proceeds of up to $5,135,000 from institutional and accredited investors.

The private placement consists of $3.42 million in senior convertible term notes, due 2008, of which $2.42 million was funded with $250,000 of that amount held in a restricted cash account; $215,000 in common stock subscriptions at closing; and the potential of up to $1.5 million in subsequent funding through additional investment rights, exercisable for up to 270 days following the closing of the transaction.

Warrants to acquire about 7.7 million shares were also provided to participating investors.

The company said that the funding enables it to refinance about $970,000 of existing debt and that it will use the balance of the net proceeds, after transaction fees and expenses, for strategic initiatives, working capital and other general purposes.

Investment banker Ascendiant Securities (Irvine, California) and Burnham Securities (New York) served as placement agents.

The company is focused on the development of specialized diagnostic kits for immunology disorders, vascular diseases and bone and joint disorders. Corgenix manufactures anti-Phospholipid test kits, saying it is the first on the market with an FDA-cleared assay for anti-Cardiolipin (aCL).

U.S. BioDefense (City of Industry, California) has formed a subsidiary, Stem Cell Research Institute of California, in order, it said, to position its Stem Cell technology division for an initial public offering (IPO). If carried out, U.S. Bio said, the IPO would fund establishment of the first stem cell Center of Excellence in Southern California to focus on collaborative research of liver cell progenitor and use for treatment of liver diseases licensed from the University College of London.

David Chin, CEO of U.S. BioDefense, said, “It is our belief that access to autologous or allogeneic hepatic stem cells would allow the development of an ‘artificial liver.’ We are planning on modeling the Google IPO auction process, opening the door for large and small investor participation.” The Stem Cell Research Institute IPO, he said, “will benchmark the industry, accelerate research and benefit humankind.”

The center will collaborate with area hospitals and university researchers to develop a system to isolate and expand stem cells which may be used for therapeutic liver re-population in patients with healthy cells for patients with liver disease, especially acute liver failure, U.S. Bio said.

The Center of Excellence in Stem Cell Research grant proposal, filed with the National Institutes of Health (NIH; Bethesda, Maryland), serves as the company’s business plan. U.S. Bio said it plans for multiple centers of excellence furthering research in many different areas.

Navigant Consulting has predicted that over the next 10 years, $14.2 billion will be invested in stem cell research worldwide.

In other financing news:

• LifeSpan BioSciences (Seattle), NEC (Tokyo) and NEC Soft of Japan reported reaching what they termed “significant milestones” in their collaboration to develop a cancer diagnosis support system for rapid detection of disease. The milestone payments were not specified.

The first of two milestones reached is the development of an enhanced version of LifeSpan’s automated image capture system (ALIAS), which automatically captures images from up to 300 pathology slides. The second is completion of improved software to discriminate between cancer cells from non-cancer cells, based on their morphologic characteristics at high magnification.

Based on jointly developed image-capture hardware and computer software, the diagnostic assistant aids in the detection of cancer cells in pathology specimens and distinguishes them from non-cancerous cells.

“We are very pleased with the progress our partnership has made to date in developing this automated system, which is designed to offer sophisticated image analysis and advanced diagnostic techniques that improve the detection and diagnosis of cancers,” said Joseph Brown, PhD, president and CEO of LifeSpan. “The cancer diagnosis support system will function as a stand-alone unit serving a single hospital and/or at a centralized core facility serving pathologists and clinicians regardless of their location.”

NEC, a global IT company, has an ongoing program in bio-IT that draws on the technologies discovered and developed by its laboratories around the world. In this way, NEC aims to provide solutions and applications to enhance discovery and the delivery of more effective healthcare measures for everyone.

LifeSpan, a molecular pathology company, provides information used in drug development.

• Taylor Madison (Orlando, Florida) and its wholly-owned subsidiary, Telzuit Technologies, reported that Taylor Madison has completed its private placement with investors of more than $1 million in two tranches: the first of $565,000, the second of about $490,000. Taylor Madison issued 10% convertible debentures and Class A warrants to the investor group. Midtown Partners & Co. acted as sole placement agent.

Telzuit provides mobile medicine worldwide. The company said it is developing the Bio-Patch Wireless Heart Monitor, a 12-lead, wireless Holter monitor, which is, it said, “new to the marketplace,” predicting that it will be available this year. Telzuit said it also is building its own dedicated intranet as a platform to handle several products it will be releasing, including the Bio-Patch Wireless Heat Monitor.