A Medical Device Daily

The financial “hits“ — that is, of the initial public offering (IPO) type, keep coming — with a parallel increase from the med-tech sector.

Medical imaging software maker Emageon (Birmingham, Alabama) is the latest in the sector to take to the IPO waters, putting forth an offering of 5 million shares of common stock at a price of $13 a share. Proceeds are expected to be about $58.45 million.

The sale to the underwriters of a possible 750,000 of over-allotment shares would bring the total proceeds to about $67.5 million.

All of the shares are being sold by Emageon, and its common stock began trading on the Nasdaq yesterday under the symbol EMAG. The company made its initial filing for the offering last November (Medical Device Daily, Nov. 23, 2004).

Emageon said that it plans to use net proceeds to repay $4 million of its outstanding subordinated debt and for general corporate purposes, including working capital, research and development, sales and marketing and capital expenditures. The company also may use a portion of the proceeds for the acquisition of or investment in businesses, products and technologies “complementary“ to its offerings.

Emageon's Intelligent Visual Medical System provides enterprise access to visual medical content using advanced visualization tools, clinical content management and clinical workflow through what it terms “a dynamic user interface.“ This enables integrated delivery networks (IDNs), hospitals and imaging facilities to deploy a standards-based technology that, it says, “lowers total cost of ownership — enabling quicker response, enhancing patient care, improving productivity and reducing costs.“

Emageon's web-enabled software lets physicians view images in 3-D and compare them with other images.

Last year the company received FDA clearance for softcopy viewing of digital mammography, specifically related to its UltraVisual advanced visualization software used in conjunction with FDA-approved display hardware (MDD, Oct. 27, 2004). Mammography images and prior digitized mammography film images can be displayed using features that are native to Emageon's software.

Targeting organizations from stand-alone imaging centers to large hospital systems, Emageon counts more than 250 hospitals as its customers.

Wachovia Capital Markets and Piper Jaffray & Co. are joint book-running managers of the underwriting group. Raymond James and Associates and Friedman, Billings, Ramsey & Co. are co-managers.

In other financing activity:

• CryoLife (Kennesaw, Georgia) reported entering into a credit agreement with Wells Fargo Foothill, a unit of Wells Fargo (San Francisco), providing for a revolving credit facility equal to the lesser of $15 million or a specified borrowing base. The credit agreement expires in February 2008, at which time the outstanding principal balance will be due.

Steven Anderson, president and CEO, said the credit facility would be used for general corporate purposes. “Our strengthened financial position, improved tissue processing procedures, continued BioGlue sales growth, and recently announced AATB accreditation are all key factors that will drive our success in 2005,“ he said.

CryoLife processes and distributes, throughout the U.S. and Canada, implantable living human tissues for use in cardiovascular and vascular surgeries.

• SFBC International (Miami), a provider of development services to medical device, biotech, branded pharmaceutical and generic drug firms, reported filing a registration statement with the Securities and Exchange Commission for a public offering of 3.5 million shares of stock.

Somewhat more than 3.1 million are being offered by SFBC, with 398,000 shares offered by certain executive officers. SFBC also is granting the underwriters an option to purchase up to another 525,000 shares for over-allotments.

SFBC said it would use the proceeds to repay $70 million of its outstanding term loan, for possible acquisitions and for general corporate purposes.

With more than 30 offices located in North America, Europe, South America, India, and Australia, SFBC specializes primarily in the areas of Phase I and early Phase II clinical trials and bioanalytical lab services, including early clinical pharmacology.

• The board of AmerisourceBergen (Valley Forge, Pennsylvania) has authorized the purchase 5.7 million shares of the company's common stock, the number of shares roughly equivalent to the number of common stock shares issued in connection with the conversion of the company's 5% convertible subordinated notes, completed Jan. 3. Under a separate $500 million repurchase program authorized by the company's board last August, AmerisourceBergen has acquired 7.6 million shares of its common stock for a total of $397.7 million. It expects to complete the $500 million in repurchases by the end of FY05.

AmerisourceBergen provides drug distribution and related services ranging from pharmacy automation, bedside medication safety systems and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education.