A Medical Device Daily
Biomet's (Warsaw, Indiana) board of directors has authorized the purchase of up to an additional $100 million of the company's outstanding common shares in open market or privately negotiated transactions.
This is in addition to July 2004 authorizations to repurchase $100 million, of which about $41.8 million is still available, and 2.5 million shares to be automatically purchased in equal increments on a daily basis through July 2005.
Purchases of the additional $100 million of common shares, if any, will be dependent on market conditions and may be made from time to time until March 20, 2006.
In aggregate, the company has purchased about $764 million worth of its shares, representing 24.3 million shares, in its previous share repurchase programs since December 2001.
Biomet and its subsidiaries make products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy.
Positron (Houston), a manufacturer of positron emission tomography (PET) scanners, reported receiving the final installment of funds from the sale of $2 million worth of 10% convertible promissory notes to Canada-based Imaging Diagnostic Centres, a private company engaged in the development of PET centers.
Positron said that the proceeds from the notes were used to build a sales and marketing team and support past and current working capital needs.
Positron also reported that it has reached an agreement with an institutional investor to provide it, in installments, an additional $1 million through the purchase of secured notes convertible into a new series of convertible preferred stock. The convertible preferred stock will be convertible into 22 million shares of the company's common stock.
The proceeds, Positron said, will be used in the development of a series of new PET and PET/CT scanners and general corporate purposes.
Positron manufactures and supports medical imaging systems using PET technology under the trade name Posi-cam systems, which incorporate technology for the diagnosis and treatment of patients in the areas of oncology, cardiology and neurology.
Positron reports Posicam systems in use at medical facilities, including the University of Texas-Houston Health Science Center; the Coronary Disease Reversal Center (Buffalo, New York); Emory Crawford Long Hospital-Carlyle Fraser Heart Center (Atlanta) and Nishidai Clinic (Tokyo).
In other financing news:
HealthSouth (Birmingham, Alabama) reported amending its existing bank credit facility. The amended and re-stated credit facility, which provides for a $315 million term loan, a $250 million revolving line of credit and $150 million in letter of credit facilities, cures all defaults of the com- pany's outstanding indebtedness, it said.
Healthsouth CFO John Workman said the financing "provides us with financial flexibility that the company has not had over the past 18 months and the liquidity to satisfy future obligations. The substantial interest from the investment community allowed us to gain more competitive pricing, reducing our annual fees by almost $1 million."
"Beginning with the resolution last summer of the bondholder litigation and continuing with the recent CMS/DoJ Civil settlement, the resolution of this final technical default is another significant step in working through the fraud-related issues unique to the company," said Jay Grinney, HealthSouth's president and CEO.
JP Morgan Securities and Wachovia Capital Markets were co-lead arrangers and joint bookrunners and Deutsche Bank Securities served as arranger for the amended and restated credit facility.
HealthSouth is a major outpatient surgery, diagnostic imaging and rehabilitative healthcare provider.
• Radiation Therapy Services (RTS; Fort Myers, Florida), an operator of radiation therapy centers, reported it has executed an amendment to its credit facility.
The company's $25 million term loan has been expanded to $35 million and its $80 million revolving credit commitment has been expanded to $140 million.
Per the amendment, the interest rate spreads on the term loan and on the revolver were reduced overall by 25 basis points. Current availability under the amended agreement has increased from $48.9 million to $120.6 million. The maturity date for the credit facility is March 15, 2010.
Two new banks were added to the banking syndicate, bringing the total number of banks to eight. The two new banks – Carolina First Bank and International Bank of Miami – join the ongoing participants – Bank of America, Wachovia Bank, Fifth Third Bank, SunTrust Bank, Regions Bank and National City Bank.
• LifePoint Hospitals (Brentwood, Tennessee) reported that, in connection with the previously announced proposed merger between LifePoint Hospitals and Province Healthcare, LifePoint subsidiary Lakers Holding has commenced a cash tender offer for any and all of the $172.5 million aggregate principal amount of Province Healthcare's 4-1/4% convertible subordinated notes, due 2008.
The purchase price to be paid for each $1,000 principal amount of notes validly tendered in the offer will be $1,060, plus accrued and unpaid interest up to, but not including, the date of payment for the notes. The offer is scheduled to expire at midnight EST on April 14, unless extended or earlier terminated. Tenders of the notes may be withdrawn pursuant to the offer to purchase at any time prior to expiration.
Lakers Holding has engaged Citigroup Global Markets to act as the dealer manager in connection with the offer.
LifePoint operates 30 hospitals in non-urban communities.
• Cardiome Pharma (Vancouver, British Columbia) is raising $51 million in a public offering to continue its clinical programs on drugs for atrial fibrillation (AF) and congestive heart failure (CHF). The company priced its offering of 8.5 million common shares at $6 per share. If underwriters exercise their option to purchase an additional 1.3 million shares, Cardiome could end up with gross proceeds totaling $58.6 million.
Cardiome said in its prospectus it intended to use the proceeds to fund clinical development of RSD1235 in both intravenous and oral formulations, as well as oxypurinol for CHF, also in clinical trials. Funds also are expected to go toward other research and development programs, capital expenditures and general corporate purposes.
During 2005, the company said it plans to complete its second and third Phase III trials and begin working on a new drug application for the intravenous formulation of RSD1235, an anti-arrhythmic drug designed to selectively block ion channels in the heart that are known to be active during episodes of atrial fibrillation.
• Integrated Healthcare Systems (HIS; Seattle), a pharmacy technology company, has received an investment of $9 million from AIG Horizon Partners Fund and another private equity fund managed by AIG Global Investment Group.
The investment directed by AIG Global Investment Group is the first external, institutional funding to IHS, which provides hospital pharmacy automation systems that are designed to reduce costs and increase productivity, while improving accuracy and patient safety.
"This investment will enable our company to grow to a new level, serving substantially more hospitals, while continuing to develop our proprietary products," said James Torina, president and CEO of IHS.
Two representatives of AIG Global Investment Group – FT Chong, managing director and head of the Direct Investments Group, and Elliot Hayes, vice president – will join the HIS board.
Cascadia Capital served as HIS's financial advisor in the transaction.
• BrainStorm Cell Therapeutics (Tel Aviv, Israel), an emerging company in stem cell therapeutics for neurodegenerative diseases, said that it has received signed confirmations from holders of 15.29 million shares of company common stock, representing 73.2% of its issued and outstanding shares of common stock to a "lock-up" agreement with respect to their shares, which were purchased in July 2004.
Specifically, such shareholders agreed that 85% of the covered shares shall be restricted from transfer for a 24-month period from July 8, 2004, and 15% of the covered shares shall be restricted for a 12-month period from such date.
In addition, Ramot at Tel Aviv University Ltd., the technology transfer company of Tel Aviv University, and their designees have agreed to the same restrictions on a total of 12,800,844 warrants, which were granted to them under the technology licensing agreement.
• Chindex International (Bethesda, Maryland), a provider of healthcare products distribution and healthcare services in China, has entered into definitive agreements with institutional accredited investors with respect to the sale of 1,080,397 shares of its common stock, for an aggregate purchase price of about $6.5 million, together with warrants to purchase an additional 378, 137 shares of its common stock.
The warrants have an exercise price of $9.10 per share and a five-year term from the date of issuance. The financing will be used to repay certain vendor financing and for general working capital purposes, the company said.
Oppenheimer & Co. acted as the placement agent for the transaction.