A Medical Device Daily

Spiration (Redmond, Washington), a developer of devices designed to treat patients with acute and chronic conditions of the lung, reported raising $18.5 million in a Series G round of equity funding from existing investors.

Versant Ventures led the financing, and Olympus Medical Systems, New Enterprise Associates, New Leaf Venture Partners (Sprout Group), InterWest Partners, Investor Growth Capital and Three Arch Partners also returned as investors.

With the financing, Spiration says it has raised total investment funds of about the total of $97 million, with its most recent F round of funding netting the company $13.4 million in early 2006 (Medical Device Daily, April 4, 2006).

Proceeds from this round will be used to support commercialization of the company's IBV Valve System in Europe and to complete clinical work to support regulatory approval and the U.S. launch of the product, the company said.

The IBV Valve System is a minimally invasive technology that has applications in both acute and chronic conditions of the lung. The device is currently under investigation in the U.S. as a new treatment option for patients with severe emphysema.

In Europe, the system has received market clearance for the treatment of diseased and damaged lungs, an indication that includes the treatment of emphysema and the resolution of prolonged air leaks, which can occur following lung surgery.

Founded in 1999, Spiration says it has created an intellectual property portfolio with more than 20 issued and 35 pending patents that address various conditions of the lung.

The IBV Valve System was developed as a potential treatment alternative for the many people with emphysema who do not respond well to current medical treatments or are not eligible for invasive surgery such as lung volume reduction or lung transplantation. In addition, the system may also be used to resolve prolonged air leaks that can occur following lung surgery.

For the treatment of emphysema, the system is designed to redirect airflow from diseased portions of the lung to healthier areas. During the minimally invasive procedure, a catheter is passed through a bronchoscope (a flexible tube passed into the bronchial tubes through the mouth or nose) to deploy the small umbrella–shaped valves into the airways of the upper lobes of the lungs.

Andover Medical (North Andover, Massachusetts), a provider of orthopedic durable medical equipment (DME), reported that it anticipates closing a $2 million private financing with an existing institutional investor.

On March 13, the company entered into an agreement with an existing institutional investor regarding a potential private equity financing.

Andover will issue Series D convertible preferred stock and Series I warrants for a purchase price of $2 million. The preferred stock issuance will bear an 8% per annum dividend and be redeemable by the investors in 24 months and be secured by a lien on all of the company's assets.

The preferred stock will be convertible into common stock at 35 cents per share and have 300% warrant coverage, with the warrants exercisable at 35 cents per share for a 10 year period.

The company said it intends to use the proceeds from the financing primarily to retire all existing bank debt, as well as for working capital. The financing is anticipated to close on or before March 31, after negotiation of a mutually acceptable definitive agreement.

In other financing news: Brookdale Senior Living (Chicago) reported that its board has approved a $150 million share repurchase program, using open market purchases, privately negotiated transactions or block trades.

Brookdale is an owner and operator of senior living facilities throughout the U.S.