A Medical Device Daily

IPC The Hospitalist Co. (North Hollywood, California) said it plans to raise about $38.3 million in an initial public offering of 4.7 million shares, according to an amended filing with the Securities and Exchange Commission.

The company, which filed a preliminary prospectus with the SEC in September for up to $105 million (Medical Device Daily, Sept. 7, 2007), is offering 2.8 million shares; and a group of selling shareholders is offering 1.9 million shares. IPC said it expects the IPO to price between $15 and $17 a share.

The underwriters have the option to buy up to 705,000 additional shares at the offering price to cover any over- allotments.

Assuming an offering price of $16, IPC expects net proceeds of about $38.3 million. IPC said it plans to use the proceeds to repay $14.1 million of outstanding debt, the balance for general corporate purposes, including the acquisition of physician practices.

IPC is a U.S. provider of hospitalist services, a growing specialty that centers on inpatient care primarily delivered in hospitals. Hospitalists differ from primary-care physicians and specialists because focusing on treating patients only in non-office settings.

The Society of Hospitalist Medicine (Philadelphia) estimates the number of hospitalists has grown from about 800 in the mid-1990s to about 20,000 in 2006, according to the filing. IPC has more than 550 affiliated hospitalists, including physicians, nurse practitioners and physician assistants, providing services at more than 300 hospitals and other inpatient centers in 16 states.

Adam Singer has been its CEO and chairman since founding IPC in 1995.

For the nine months ended Sept. 30, the company reported a loss of $4 million on revenue of $137.4 million.

Credit Suisse and Jefferies & Co. are serving as lead managers of the deal. Wachovia Securities and William Blair & Co. are also underwriting the IPO.

IPC plans to list its shares on the Nasdaq Global Market under the symbol IPCM.

ViewRay (Gainesville, Florida) reported the close of a $25 million Series B financing. Founded in 2004, ViewRay develops real-time MRI-guided radiation therapy device for the treatment of cancer.

The financing was led by OrbiMed Advisors and Fidelity Biosciences, joined by Aisling Capital and Kearny Venture Partners.

“This substantial funding from blue-chip biomedical investors is a first in our industry and a testament to the promise of ViewRay’s technology to help cancer patients. More importantly, it allows us to accelerate the development of our system, the first device to promise real-time volumetric imaging simultaneous with radiation treatment” said ViewRay CEO William Wells.

The ViewRay Renaissance System 1000 technology was invented by James Dempsey, PhD, associate professor in the Department of Radiation Oncology at the University of Florida (Gainesville) and has been exclusively licensed by the company from the university.

ViewRay said the Series B proceeds will be used to build the ViewRay team and manufacture and validate advanced prototypes of the Renaissance System 1000.

In other financing news:

• Ascension Orthopedics (Austin, Texas), a company developing joint replacement, trauma and tissue regeneration surgical implants for use in upper and lower extremities, reported securing $21 million in a Series D financing. It said the funding will be used primarily to expand its product line and enhance its marketing and distribution network.

Leading as the majority investor was Frazier Healthcare Ventures. Alan Frazier, general partner and founder of Frazier Healthcare Ventures will join Trevor Moody, general partner of Frazier Healthcare, and Steven Tallman, venture partner of Frazier Healthcare on Ascension’s board.

• North American Scientific (NAS; Chatsworth, California) reported closing on Jan. 18 of a private placement of shares of its common stock and the concurrent issuance of warrants for the purchase of common stock.

NAS said it received gross proceeds of $15.5 million, to be used for continued development of ClearPath, the company’s breast brachytherapy device, and working capital.

Three Arch Partners led the private placement and has invested $10 million. CHL Medical Partners invested $3 million, and SF Capital Partners invested $2.5 million. Oppenheimer & Co. was the sole placement agent.

The private placement increased the company’s stockholders’ equity from $753,000, as reported in the company’s report the quarter ended July 31, 2007, to pro forma stockholders’ equity of $14,868,000 assuming estimated closing costs of $1,385,000, and excluding financial results subsequent to July 31, 2007. The pro forma stockholders’ equity exceeds the $2.5 million minimum stockholders’ equity requirement for listing on the Nasdaq Capital Market.

The investors have been issued 63,008,140 shares of the company’s common stock at $0.246 a share, as well as warrants to purchase 3,150,407 shares of common stock at $0.246 a share. The warrants are exercisable beginning 180 days after the date of closing until seven years after the date of closing.

NAS makes tools used in radiation therapy for the treatment of various cancers.