A Medical Device Daily

Cipher Holding (Oak Brook, Illinois) reported acquiring a secured convertible debt position in Positron (Houston), a manufacturer of positron emission tomography (PET) scanners, from Imagin Diagnostics Centres (Toronto).

Cipher will issue 30 million common shares for this transaction and will hold a convertible debt position that converts into an excess of 50% ownership of Positron.

Cipher Holding said its strategy is “to become a leading investor and developer of PET molecular imaging businesses.” It said it is pursuing development opportunities, strategic investments and the acquisition of majority-owned positions in companies dedicated to PET scanning for cancer, heart disease and neurological diseases.

Cipher also reported a request for approval from its shareholders to change its name to Imagin Molecular Corp. and to spin off its Cipher Multimedia holding to its shareholders.

Imagin Molecular will work closely with Imagin Diagnostics to expand on its ability to finance and develop PET and PET-related products and businesses throughout North American and international markets, it said.

Protein Polymer Technologies (PPT; San Diego), which is focused on bioactive devices designed for improved surgical outcomes, reported closing on $3.6 million of a private placement of common stock and warrants yielding gross proceeds of nearly $7.75 million. Of the committed capital, about $1.2 million represents the conversion of short-term promissory notes previously issued.

“We will use the proceeds to expand our clinical trials and accelerate the development of our manufacturing process while we continue to advance our partnering efforts and other commercialization opportunities,” said William Plamondon, PPT’s CEO. “As a result, we will add more value to our incontinence and dermal tissue augmentation products, and to our surgical adhesives and sealants including the ongoing development of a spinal disc repair product for Spine Wave [Shelton, Connecticut].”

The company issued 23,586,528 shares of common stock at price of 33 cents a share, with warrants for the purchase of an aggregate of about 11.79 million shares of common stock. The warrants are exercisable at a price of 50 cents a share, and expires about 48 months after the offering close.

Luther Capital Management and Palladium Capital Advisors assisted the company, receiving aggregate fees of about $425,000 and warrants to acquire nearly 120,000 shares of stock, expiring about five years after issuance.

PPT, formed in 1988, is developing products to improve medical and surgical outcomes. It says it has pioneered protein design and synthesis, creating a portfolio of biomaterials for use in developing bioactive devices. Targeted products include urethral bulking agents for treating stress urinary incontinence, dermal augmentation products for cosmetic and reconstructive surgery, surgical adhesives and sealants, scaffolds for wound healing and tissue engineering, and depots for drug delivery.

In other financing activity:

• In a move to further enhance its MD PaperFree EMR solution, PaperFree Medical Solutions (Kokomo, Indiana) reported signing a memorandum of understanding with NewCrop (Houston) to license and integrate that firm’s real-time electronic prescription technology into MD PaperFree.

The NewCrop system allows practitioners to use PDAs or other networked devices to automatically fax prescriptions to pharmacies, thus reducing time and effort by both patient and provider. One of the technology’s features automatically interfaces with patient insurance records to verify which drugs are covered.

The integration of NewCrop’s Electronic Prescribing into MD PaperFree has been accelerated by PaperFree’s newly formed Software Development Center, the company said.

NewCrop provides integrated electronic prescribing components designed for partnering with other medical office applications, including a re-branded doctor-to-pharmacy solution. PaperFree offers electronic medical records, practice management software systems and broadband wireless connectivity to the physician office, clinic and hospital.

• Biomarker Technologies (Phoenix), provider of the BT Test, a blood diagnostic for detection of breast cancer, reported that it is seeking Series A funding for studies of the in vitro test for FDA approval. The company received initial funding in 2004 from angel investors and said it is in due diligence with “potential licensees.”

“This funding is critical to help us expedite the FDA approval process,” said William Gartner, CEO and president, noting completion of the testing is “necessary to bring this blood test to market quickly in order to begin to save thousands of women’s lives through the earlier detection of breast cancer.”

The company is conducting a pilot study on the BT Test to validate its performance in a 100-patient blind trial, saying it expects results in 60 days. In previous studies of more than 250 subjects, the test identified non-treated breast cancer in women with a greater than 95% sensitivity and specificity, outperforming mammography.

The test is designed to detect breast cancer at the molecular level, unlike mammography, which only detects gross changes in breast tissue via X-ray. It measures five cancer-associated biomarkers and, when combined and adjusted for age, has shown the potential to detect early stage breast cancer.

• CardioVascular BioTherapeutics (Henderson, Nevada) reported that it has concluded the conversion of about $14.87 million worth of notes into 5,782,550 shares of common stock. CEO Daniel Montano said, “Our company’s balance sheet has been strengthened thanks to the noteholders who converted their notes into common stock.”

CardioVascular BioTherapeutics is focused on developing a new drug for the treatment of cardiovascular disease where the growth of new blood vessels can improve patient outcomes. Its drug candidate, Cardio Vascu-Grow, is intended to facilitate growth of new blood vessels in the heart and other tissues with an impaired vascular system.

CVBT is the company’s ticker symbol on the Over-the-Counter Bulletin Board.

• LifePoint Hospitals (Brentwood, Tennessee) reported the expiration of the previously disclosed cash tender offer by its Province Healthcare (also Brentwood) subsidiary to purchase the $200 million outstanding principal amount of Province Healthcare’s 7-1/2% senior subordinated notes, due 2013. The offer expired at midnight EDT April 15.

Prior to the expiration of the offer, Province said it received tenders of just over $193.83 million principal amount of notes, representing roughly 97% of the principal amount of notes outstanding prior to commencement of the tender offer. All of the notes were tendered prior to the expiration of the consent solicitation commenced by Province in conjunction with the tender offer to effect certain amendments to the indenture governing the notes and were purchased by Province April 15.

LifePoint Hospitals is focused on providing healthcare services in non-urban communities.