A Medical Device Daily

Oxygen therapeutics developer Northfield Laboratories (Evanston, Illinois) has priced its offering of 4.5 million shares of common stock at $15 per share under an existing shelf registration statement for offerings up to $100 million (Medical Device Daily, Dec. 28, 2004).

Northfield said it expects to receive gross proceeds of about $67.5 million from the sale of 4.5 million shares of common stock.

The current offering was increased by 1 million shares over the proposed offering announced by the company last month (MDD, Jan. 21, 2005).

With the offering, Northfield has granted the underwriters a 30-day option to purchase up to 675,000 additional shares of common stock to cover over-allotments. If exercised, the over-allotment will result in added gross proceeds of about $10.1 million to the company.

The offering is expected to close on or about Feb. 9, subject to customary conditions.

UBS Investment Bank is sole book-running manager in this offering. SG Cowen is co-lead manager and Harris Nesbitt is co-manager.

Northfield Laboratories is a developer of an oxygen-carrying blood substitute for the treatment of urgent, large-volume blood loss in trauma and resultant surgical settings. PolyHeme is a solution of chemically modified human hemoglobin that requires no cross matching and is therefore compatible with all blood types.

Enrollment is currently under way in a pivotal Phase III trial of PolyHeme, beginning in the pre-hospital setting.

Diagnostics firm Avitar (Canton, Massachusetts) reported entering into a standby equity distribution agreement with Cornell Capital Partners, with Cornell committed to providing up to $10 million of equity financing which can be drawn by the company in $250,000 tranches at any time over a 24-month period, subject to certain conditions.

Peter Phildius, chairman and CEO of Avitar, said the agreement provides “the necessary working capital allowing us to continue to invest in the resources that we will need to enhance and expand our ORALscreen products business, which addresses the estimated $1.5 billion drugs-of-abuse testing market encompassing the corporate workplace and criminal justice markets.“

For each share of common stock purchased under the standby equity distribution agreement, Cornell will pay the company 99% of the lowest volume weighted average price of the company's common stock as quoted by Bloomberg for the five days immediately following notice from the company. The price paid by Cornell will be determined immediately after each individual request for an advance.

Cornell was paid a one-time commitment fee equal to $115,000 by issuance of the company's common stock.

Avitar manufactures products in the oral fluid diagnostic market, disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Avitar describes ORALscreen as “the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse.“ Avitar also makes Hydrasorb, an absorbent topical dressing for moderate-to-heavy exudating wounds.

In other financing activity:

• Tm Bioscience (Toronto), a developer of genetic testing technology, reported closing its previously announced private placement of 4.33 million common shares for C$2.15 a share, for gross proceeds of C$9,309,500 (MDD, Jan. 20, 2005). The private placement was sold through a syndicate of underwriters consisting of Orion Securities as lead underwriter and including Douhy Merchant Group.

The company said the offering proceeds will be used to advance its pipeline of genetic tests and for working capital.

Tm Bioscience's product pipeline includes tests for genetic disorders, drug metabolism, and infectious diseases.

• AHPC Holdings (Itasca, Illinois), whose subsidiary, American Health Products, is a supplier of disposable gloves to the healthcare, foodservice, retail and industrial markets, said it completed a private placement of 220,000 shares of Series A senior convertible preferred stock for $2.60 a share.

The shares are convertible 1-to-1 into AHPC Holdings common stock. The company said the funds will be used to expand product offerings and marketing and for general working capital.

• Select Medical (Mechanicsburg, Pennsylvania) reported pricing an offering of $660 million in senior subordinated notes, due 2015, with an interest rate coupon of 7-5/8%. The net proceeds will be used to provide a portion of the funds financing Select's merger with an affiliate of Welsh, Carson, Anderson & Stowe IX; refinance certain of Select's existing indebtedness; and pay fees and expenses (MDD, Oct. 24, 2004). Select said it expects to complete the offering this month.

When first reported, the transaction was valued at about $2.3 billion.

Select provides long-term acute care hospital services and inpatient acute rehabilitative hospital care through its Select Specialty Hospital division and provides physical, occupational and speech rehabilitation services through its outpatient divisions.