Medical Device Daily Associate

Artes Medical (San Diego), a developer of products used by dermatologists and cosmetic surgeons, reported filing for a 4.6 million share initial public offering.

The company, which makes the ArteFill micro-injectable product that combines bovine collagen and synthetic microspheres to treat nasolabial folds (that is, smile lines) estimated the net offering proceeds from this offering will be about $51.8 million — or $60.2 million if the underwriters exercise their over-allotment option in full. The figure is based on an assumed share offering price of $13, the mid-point of the stated share price range.

Artes said it intends to use the net proceeds from this offering to build its sales and marketing organization and implement promotional and advertising campaigns related to the commercial launch of ArteFill — approved by the FDA in October 2006; to conduct its long-term, post-market safety study of ArteFill; to further automate and expand capacity at its manufacturing facilities; and to conduct further studies to evaluate the feasibility, safety and efficacy of ArteFill for other aesthetic applications. The company said it intends to use the remainder of the net proceeds from this offering for working capital and for other general corporate purposes.

The company said it intends to initiate shipments of ArteFill in 1Q07. However, all of its other product candidates are still in the early R&D stages. As a result, it said it has not recorded any revenues to date. The company has incurred significant net losses since its inception, including losses of about $12.4 million in 2004, $22.2 million in 2005 and $18.6 million for the nine months ended Sept. 30.

The company said it also is facing a lawsuit relating to the alleged improper use of its ArteColl – the predecessor to ArteFill prior to its FDA approval. Additionally, the company and former company officers are under investigation by the FDA in relation to the alleged improper use of the product.

The company has filed to register its shares on the Nasdaq Global Market under the symbol ARTE.

In other financing activity:

• Response Biomedical (Vancouver, British Columbia) reported today that it has closed the $8 million equity investment made in by 3M ’s (St. Paul, Minnesota) medical division.

The alliance, reported earlier this month (Medical Device Daily, Dec. 11, 2006), gives 3M about a 13% ownership position in Response Biomedical.

The financing grants 3M worldwide exclusive rights, through its medical division, to pursue the development and commercialization of diagnostic products targeting hospital and community-acquired infectious diseases, using Response’s RAMP testing platform.

3M’s equity investment consists of 14,797,419 shares at a price of C 62 cents a share ($0.5406). 3M has agreed not to sell any of its shares for a period of 12 months from closing.

Response develops rapid on-site diagnostic tests for use with its portable RAMP Platform for clinical and environmental applications.

• Invitrogen (Carlsbad, California) has entered into a strategic development and distribution relationship with Blue Heron Biotechnology (Bothell, Washington). Invitrogen will invest in Blue Heron in exchange for worldwide rights to distribute Blue Heron’s custom gene synthesis services. Financial terms of the agreement were not disclosed.

Blue Heron Biotechnology’s GeneMaker platform is designed to synthesize any gene sequence, with perfect accuracy regardless of length or complexity.

Invitrogen is a provider of recombinant cloning and protein expression products, as well as providing the largest fully sequenced human open reading frame clone collections.

Blue Heron Biotechnology has produced nearly 10 million base pairs of DNA since its inception in 1999. The company regularly produces simple to complex DNA sequences from less than 100 base pairs to more than 20,000 base pairs.

The companies will also co-develop new products and services for the research and bio-pharmaceutical markets.

• Beckman Coulter (Fullerton, California) reported the pricing of its offering of $525 million aggregate principal amount of convertible senior notes, due 2036. The company also granted the initial purchasers an option to purchase up to $75 million aggregate principal amount of additional notes to cover any over-allotments.

The company estimated that the net proceeds from the offering will be about $512.5 million after deducting discounts, commissions and estimated expenses associated with the offering.

It said it expects to use about $100 million of the proceeds to repurchase shares of its common stock and about $245 million of the proceeds to consummate the tender offer for any and all of its outstanding 7.45% senior notes due 2008. The remainder of net proceeds will be used to reduce amounts outstanding under its revolving credit facility.

The overall purpose of the offering is to reduce Beckman Coulter’s interest expense in order to fund additional R&D activities, including its molecular diagnostics project, it said.

The notes will pay interest semi-annually at 2.50% per year and, under certain circumstances, beginning with the six-month period beginning Dec 15, 2012, contingent interest. The notes will be convertible, at the holder’s option, at an initial conversion rate of 13.4748 shares per $1,000 principal amount of notes, which represents a 25% conversion premium

• Angiotech Pharmaceuticals (Vancouver, British Columbia) reported closing the previously reported sale of $325 million in principal amount of its senior floating rate notes, due 2013, in a private placement.

The proceeds of the offering, plus cash on hand, were used to repay the outstanding principal amount under the company’s senior secured term loan facility. The company also terminated its revolving credit facility when it repaid its senior secured term loan facility.

• Lifescience company Sigma-Aldrich (St. Louis) reported that it has amended the terms of its $150 million revolving credit facility established in February 2005 by exercising the $15 million accordion feature of the facility.

The revised $300 million revolving credit facility will mature on Dec. 11, 2011. The facility will provide back-up liquidity for the commercial paper program and be used for general corporate purposes.

Wells Fargo Bank, National Association and Wachovia Bank served as co-arrangers for the eight-bank syndicate participating in this facility. Wells Fargo Bank, National Association acted as the administrative agent.