A Medical Device Daily

AMDL (Tustin, California) reported the closing of the first tranche of a private placement offering of 12% senior notes and warrants. In this first closing, AMDL sold $1,077,500 of 12% senior notes at par value.

The notes mature at the earlier of 24 months or the completion of a bank or credit facility of not less than $8 million in one or more transactions. The warrants included in the offering have a term of five years from the date of issuance and are exercisable at a price equal to $1 per share.

Under the terms of the offering, the exercise price of the warrants are equal to the greater of $1 per share or 115% of the five-day volume average weighted prices of the company's common stock prior to the closing date of the offering.

"This financing strengthens our cash position and allows us to finance key business initiatives, including the commercialization and introduction of key products such as DR-70 and Goodnak in opportunistic markets including China and the U.S.," said President/CEO Douglas MacLellan.

The placement agent for this offering is Cantone Research, which is expected to have a final closing of the senior note before year-end.

AMDL, along with its Jade Pharmaceutical subsidiary, is a biopharmaceutical company that makes diagnostic, pharmaceutical, nutritional supplement and cosmetic products. The company employs about 500 people in the U.S. and China.

In other financing news, Neoprobe (Dublin, Ohio), a developer of oncology and cardiovascular surgical and diagnostic products, said it has completed a $3 million convertible preferred stock and warrant investment by Platinum-Montaur Life Sciences.

The investment closed following the achievement of favorable initial Phase III Lymphoseek results in patients with breast cancer or melanoma. To date, the results show a concordance rate in excess of 96% for lymph nodes identified with Lymphoseek and patent blue dyes.

Neoprobe received the third funding of $3 million in exchange for convertible preferred stock and warrants to purchase common stock of Neoprobe. The third funding brings Montaur's total investment in Neoprobe to $13 million.

"The completion of the third funding by Montaur enables us to continue the development of Lymphoseek and validates our business strategy," said David Bupp, Neoprobe's president/CEO. "The commercialization of Lymphoseek, in concert with the dominant radiopharmaceutical distributor in the U.S., creates a commercial opportunity for Neoprobe in excess of $250 million annually. The achievement of positive Phase III results for Lymphoseek and the affirmation of the development plan for RIGS coupled with the continuing commercial success of our gamma device products portend an auspicious future for Neoprobe and its shareholders."

Lymphoseek is a radioactive tracing agent being developed for use in connection with gamma detection devices in a surgical procedure known as intraoperative lymphatic mapping. A Phase III multi-center clinical trial for Lymphoseek in patients with breast cancer or melanoma is under way and a protocol for a second Phase III clinical study to evaluate the efficacy of Lymphoseek as a sentinel lymph node tracing agent in patients with head and neck squamous cell carcinoma has been submitted to the FDA and the European Medicines Agency.

Rigscan, a diagnostic tool for colorectal cancer, failed to clinch FDA approval more than a decade ago and the company in recent years has been working to reboot its development.

The preferred shares are fully convertible at the option of Montaur into shares of Neoprobe common stock at a conversion price of 50 cents per share.

In addition, Neoprobe issued Montaur warrants to purchase 6 million shares of Neoprobe common stock at an exercise price of 58 cents per share. WBB Securities acted as the sole placement agent in the transaction with Montaur.