A Medical Device Daily
Yet another company has added to the recent resurgence of the initial public offering (IPO) as the exit strategy of choice of healthcare companies, continuing the momentum established last year for that option after a nearly two-year drought.
SFBC International (Miami), a provider of drug development services to pharmaceutical, biotechnology, generic drug and medical device companies, with its disclosure that it has priced its public offering of 3.5 million shares of common stock at $38 per share.
SFBC is offering 3,078,000 of the shares and 422,000 shares are being offered by selling stockholders consisting of executive officers and directors of SFBC. In addition, SFBC has granted the underwriters an option to purchase up to an additional 525,000 shares of common stock to cover over-allotments.
The offering is expected to close on March 15 and is being made pursuant to a previously disclosed registration statement that became effective on Wednesday.
UBS Investment Bank is the book-running manager in the offering and Jefferies & Co. is co-manager.
SFBC International provides early- and late-stage clinical drug development services to pharmaceutical, biotechnology, generic drug and medical device companies around the world.
In early clinical development services, SFBC specializes primarily in the areas of Phase I and early Phase II clinical trials and bioanalytical laboratory services, including early clinical pharmacology. SFBC also provides late-stage clinical development services globally that focus on Phase II through IV clinical trials.
SFBC also offers a range of complementary services, including data management and biostatistics, clinical laboratory services, medical and scientific affairs, regulatory affairs and submissions, and clinical IT solutions.
Vivus (Mountain View, California) said it has agreed to sell 6.25 million shares of its common stock in an underwritten follow-on public offering.
The shares will be offered to the public at a price per share of $3.40. The company also granted the underwriters a 30-day option to purchase up to an additional 937,500 shares to cover any over-allotments.
All of the shares are being offered by the company. SG Cowen & Co. is the lead manager for the offering, with Wachovia Capital Markets as co-manager.
Vivus is developing products to restore sexual function for men and women.
In other financing activity:
• American Capital Strategies (Bethesda, Maryland) reported that it has invested $35 million in NewQuest Health Solutions (Nashville, Tennessee), an independent managed care organization primarily focused on providing Medicare Advantage HMO health plans to members in Alabama, Illinois, Tennessee and Texas.
American Capital's investment takes the form of senior subordinated debt and supports GTCR Golder Rauner's recapitalization of NewQuest. UBS Securities is providing a revolving credit facility and investing in a senior term loan. NewQuest management and existing investors in NewQuest are rolling over a significant amount of equity.
NewQuest is an independent managed care organization primarily focused on providing Medicare Advantage HMO health plans through a comprehensive network of physicians and hospitals. The company offers a broad set of services to its members, including independent provider association management services, prescription drug benefits, disease management, care enhancement and high-risk health management programs, and behavioral health and substance abuse services.
• TechniScan Medical Systems (TMS; Salt Lake City), a developer of ultrasound technology for breast imaging, reported that it has successfully completed its latest round of financing, raising roughly $6.7 million.
"TechniScan is very pleased to have worked together with the Maxim Group to raise $6.7 million in equity financing," said TMS CEO and President David Robinson. "The funds raised from this round are critical for our next clinical phase and will accelerate our 2005 timeline and the expansion of our staff."
Previously, TechniScan turned to the private equity market, angel investors and prominent Salt Lake City businesspeople for financial backing, and has flourished with no institutional or venture funding, it said.
"The fact that TMS has survived with no institutional or venture capital testifies to the quality of our company management team, the commitment of our employees and the value of our mission," Robinson added.
Following the completion of about 100 patient studies at TMS, the company conducted the first clinical investigation of its UltraSound CT technology at St. Mark's Hospital (Salt Lake City) in September 2004.
TechniScan said this first study has allowed the company to develop important information about user preferences, additional patient data, and the utility and practice efficiency of the equipment. A new set of prototypes will deploy at sites across the country in the second half of 2005, with sales forecasted for early 2006.
Founded in 1984, TMS uses an ultrasound technology called inverse scattering, which makes use of the entire spectrum of information available from the ultrasound signal. The resulting diagnostic information includes ultrasound transmission tomography images in a format similar to that provided by MRI and CT imaging. In addition, UltraSound CT provides indices of speed and attenuation of sound, tissue properties that may provide physicians with valuable diagnostic information.
• Boston Life Sciences (Boston) provided an update on the company's efforts to simplify its capital structure and recapitalize the company.
"As reported, we have just completed a $5 million private placement of common stock," said CEO Peter Savas. "Prior to closing this financing, we repaid $4 million of debt, converted all of our preferred stock into common stock, and generated proceeds of more than $1 million from the exercise of warrants. We are pleased to have the continued confidence and support of our existing shareholders."
The company also said that it expects to report a net loss attributable to common stockholders for 2004 between $11 million and $12 million, as compared to a net loss attributable to common stockholders of approximately $11.1 million in 2003.
Boston Life Sciences is engaged in the research and clinical development of diagnostic and therapeutic products for central nervous system disorders.
• V.I. Technologies (Vitex; Watertown, Massachusetts), a biotechnology company developing the next generation of anti-infective therapeutics, said it has filed a registration statement for a proposed rights offering of its common stock with a maximum value of about $5.5 million through the distribution of subscription rights to all of its shareholders of record as of Wednesday.
Under the terms of the rights offering, record date shareholders will receive 0.8 subscription rights for each share of common stock which they own as of the record date, thereby entitling them collectively to purchase up to a maximum of 27.5 million shares of Vitex stock. The exercise price will be 20 cents per share, the same pricing as in the $20 million private placement disclosed in December (Medical Device Daily, Dec. 13, 2004) that also included warrants and which is expected to close concurrently with the company's merger with Panacos Pharmaceuticals (Gaithersburg, Maryland), expected sometime this month. The rights offering also is conditioned on the closing of the merger.
Ampersand Ventures, a Vitex shareholder, has agreed not to participate in the rights offering under the terms of its participation in the private placement. If all remaining shareholders of record were to exercise their rights, then rights to purchase approximately 36 million shares would be subscribed for. If over 27.5 million shares are subscribed for, subscriptions granted would be reduced on a pro rata basis so that the total number of shares issued and funds received do not exceed 27.5 million and $5.5 million, respectively. There will be no oversubscription rights and no transfer or sale of rights permitted in connection with this offering.
• ImaRx Therapeutics (Tucson, Arizona) a biopharmaceutical company developing what it terms "NanoInvasive" therapies for stroke and cancer, reported the placement of 2.3 million shares of common stock raising gross proceeds of $7 million.
The company said it will use the net proceeds to, among other things, fund the clinical trials of its lead technology, SonoLysis, which incorporates MRX-815 nanobubbles and ultrasound to dissolve blood clots. A Phase I/II clinical trial for the treatment of peripheral arterial occlusions as well as a Phase II trial for stroke are scheduled to begin in 2Q05.
"SonoLysis, our clot-dissolving technology, is potentially applicable to more patients across multiple indications than existing FDA-approved therapies," said John Moore, ImaRx's chairman and executive vice president. "In addition to funding multiple clinical trials of SonoLysis, monies raised from this private offering will be used to continue to protect and expand our substantial intellectual property portfolio in NanoInvasive medicine and to hire additional key management. In a separate transaction, using funds from outside this raise, we have taken the opportunity to buy back all debt from a former industry partner at a substantial discount."
First Montauk Securities Corp. acted as the exclusive placement agent for the financing.