A Diagnostics & Imaging Week

Transoma Medical (St. Paul, Minnesota) reported that it is postponing its initial public offering, citing unfavorable market conditions. The company said it expects to proceed with the IPO “at a future date” when it determines the more appropriate timing.

Earlier this week the company reported its IPO pricing in the $14 to $16 range. The IPO was valued at up to $54 million for 4 million shares of common stock.

Transoma first reported filing for the public offering last October. It had planned to use the proceeds for working capital and general corporate purposes, and for potential acquisitions of business, technologies and products.

The company develops implantable, subcutaneous, wireless diagnostic and monitoring products, and says that it is focused on two distinct markets: the chronic cardiovascular disease (CVD) market, through its Patient Management Device (PMD) division, and the biomedical research market, through its Data Sciences International (DSI) division.

Transoma’s PMD division develops implantable, ambulatory monitoring systems that provide vital signs information about various forms of coronary vascular disease and for optimizing drug, interventional, surgical and device treatment alternatives.

The company says that its first PMD division product, the Sleuth Implantable ECG monitoring system (Sleuth ECG), is designed to capture, record, analyze and wirelessly transmit clinically relevant ECG data while minimizing the need for patient compliance and physician interaction. It received FDA 510(k) clearance on Oct. 1 for monitoring patients with clinical syndromes or situations at increased risk of cardiac arrhythmias and patients who experience transient symptoms that may suggest a cardiac arrhythmia.

Transoma’s DSI division is a supplier of wireless, physiologic monitoring equipment and a supplier of related data acquisition and analysis products used in biomedical research, including preclinical drug discovery and development.

In its SEC filing, the company said that it has not been profitable and has incurred net losses in each quarter since FY02, the year that it raised proceeds of about $11.9 million in a private financing to commercialize its wireless, implantable technology as a diagnostic tool for patients with chronic cardiovascular disease.

It incurred net losses of $2.2 million, $4.2 million and $9.1 million, respectively, for its fiscal years ended June 30, 2005, 2006, and 2007.

The company said it expects to incur significant sales and marketing and manufacturing expenses as it continues to commercialize the Sleuth ECG, and additional development expenses as it seeks to invest in its DSI product line and commercialize future PMD products. It said it also expects to incur significant losses “for the foreseeable future.”

Isis Pharmaceuticals (Carlsbad, California) has reported that Abbott Laboratories (Abbott Park, Illinois) plans to invest up to $40 million in Isis’ subsidiary Ibis Biosciences (Carlsbad).

Ibis makes a biosensor system designed to detect and identify any infectious organism. It said that future potential applications include epidemiologic surveillance, including homeland defense, monitoring of hospitals for outbreaks for drug-resistant infections and diagnostics. The investment will allow Ibis to further develop its biosensor system, the Ibis T5000, Isis said.

Abbott will initially acquire about 10.25% of the equity in Ibis for $20 million. Abbott will have the option to invest an additional $20 million before July 31 for a total stake of 18.6%.

Abbott also will have the option to buy the remaining equity in Ibis for another $175 million to $195 million through June 30, 2009. The option exercise price can increase to between $190 million and $210 million if Ibis completes certain milestones.

In other financing activity: China Sky One Medical (Harbin, China), a manufacturer of pharmaceutical, medicinal and diagnostic products in China, reported that it raised $25 million in a private placement of 2.5 million shares of the company’s common stock, with 30% warrant coverage. The warrants have an exercise price of $12.50 per share and a term of three years.

The company said it intends to use the proceeds from the offering for acquisitions, working capital and sales and marketing for new products.

Global Hunter Securities acted as the sole placement agent in this transaction.

China Sky One is a Nevada-registered holding company with principal operations through its subsidiaries, Harbin Tian Di Ren Medical Science and Technology and Harbin First Bio-Engineering, which are engaged in the manufacturing of medicinal and diagnostic kit and pharmaceutical products.