A Medical Device Daily

EnteroMedics (St. Paul, Minnesota) has priced its initial public offering of 5 million shares of common stock at $8 a share, roughly half of the $14 to $16 price range it forecast earlier this week (Medical Device Daily, Nov. 14, 2007).

EnteroMedics’ common stock was expected to begin trading on the Nasdaq Global Market under the trading symbol ETRM yesterday. If all the shares are exercised, including the over-allotments, the company could raise up to $46 million before expenses. All shares of the common stock in the offering are being sold by EnteroMedics.

J.P. Morgan Securities and Morgan Stanley & Co. are acting as joint book-running managers of this offering, with Cowen and Co., acting as co-lead and Leerink Swann acting as co-manager for the offering. EnteroMedics has granted the underwriters a 30-day option to purchase an additional 750,000 shares to cover any over-allotments.

The company said it plans to use proceeds from the offering for pursuing regulatory approval of its product, research and development, sales and marketing and for working capital and other general corporate purposes.

EnteroMedics is developing a new device called the Maestro system to treat obesity. The device blocks the vagus nerve using high-frequency, low-energy electrical impulses, which limit the expansion of the stomach and produce a feeling of prolonged fullness. The vagus nerve controls much of the activity of the stomach, intestines and pancreas. The company recently received an investigational device exemption (IDE) application approval from FDA for the pivotal trial of the Maestro.

The company is conducting human clinical trials of the product in Australia, Mexico, Norway and Switzerland, according to the filing. EnteroMedics plans to submit a premarket approval application for the device to the FDA by mid-2009. If approved, the company anticipates it will begin marketing the device in the U.S. in 2010.

For the nine months ended Sept. 30, the company reported a loss of $19.8 million, compared with a loss of $12.5 million in the year-ago period. Because the company does not have any products approved for commercialization, the company has yet to record any revenue.

Virtual Radiologic Corp. (VRC; Minneapolis) also reported the pricing of its 4 million share IPO, looking at a per share price of $17, the mid-point of its estimated price range reported on earlier this week (MDD, Nov. 13, 2007).

All shares were offered by VRC, a company that provides radiology services to hospitals, clinics and imaging centers.

In connection with the offering, certain selling stockholders granted the underwriters a 30-day option to purchase up to 600,000 shares of common stock at the initial public offering price.

At that price, the company could raise up to $78.2 million before expenses if all the over-allotments are exercised.

The company said it intends to use the net proceeds from the offering to repay outstanding debt and for general corporate purposes.

Shares of VRC’s common stock will be listed on the Nasdaq Global Market under the ticker symbol VRAD.

Goldman, Sachs & Co. is acting as the sole book-running manager of the offering, with Merrill Lynch & Co. acting as co-lead manager and William Blair & Co. acting as co-manager.

In other financing news:

• Inverness Medical Innovations (IMI; Waltham, Massachusetts) reported the pricing of its previously disclosed public offering of 11,834,302 shares of common stock at $61.49 a share. Certain selling stockholders of the Company are also selling 165,698 shares of common stock in the offering.

IMI has granted the underwriters a 30-day option to purchase up to another 1.8 million shares of common stock to cover any over-allotments. The offering is expected to close on Nov. 20.

UBS Investment Bank, Jefferies & Company, Inc. and Merrill Lynch & Co. are acting as joint book-running managers for the offering.

• BioForm Medical (San Mateo, California) reported closing its previously disclosed IPO of 10 million shares and that the underwriters of the offering exercised their over-allotment option in full, purchasing another 1.5 million shares at $8 a share. Including over-allotments, the company sold 11.5 million shares, resulting in net proceeds of about $83.4 million.

The company filed for the IPO in August (MDD, Aug. 23, 2007).

J.P. Morgan Securities and Piper Jaffray & Co. are serving as joint book-running managers for the offering, with CIBC World Markets Corp. and Jefferies & Co. serving as co-managers.

BioForm is a medical aesthetics company, its products including Radiesse, a filler for use in facial aesthetics and vocal fold insufficiency; and Coaptite for treating female stress urinary incontinence which is marketed through a partnership with Boston Scientific (Natick, Massachusetts).

•Cardium Therapeutics and its subsidiary InnerCool Therapies (both San Diego) reported completing a $5 million credit facility with Life Sciences Capital to support launch of InnerCool's new product lines for patient temperature modulation and other ongoing product development.

“Cardium and InnerCool recently announced the launch of the new CoolBlue surface-based patient temperature modulation system and expect to announce the launch of InnerCool’s new RapidBlue endovascular system next quarter. These two next-generation systems are designed to advance InnerCool to the forefront of the emerging field of therapeutic hypothermia by making it the only company positioned to offer leading approaches to temperature modulation both from outside the body for less acute situations, and from inside the body for acute settings,” said Christopher Reinhard, CEO/chairman of Cardium and InnerCool.

Cardium develops biologic therapeutics and medical devices for cardiovascular and ischemic disease.

• SurModics (Eden Prairie, Minnesota), a provider of surface modification and drug delivery technologies to the healthcare industry, reported that its board has approved a share repurchase program, authorizing the company to purchase up to $35 million of its outstanding common stock.

Phil Ankeny, senior VP and CFO, said, “In our prior repurchase program, we retired in excess of 1 million shares at an average price of $34.76 per share, facilitating a reduction of approximately 5% in total shares outstanding. We believe our activities and accomplishments in fiscal 2007 have strengthened our ability to build long-term shareholder value.”

SurModics is a provider of surface modification and drug delivery technologies to the healthcare industry.

• MedCath (Charlotte, North Carolina), a provider of high-acuity healthcare services, including the diagnosis and treatment of cardiovascular disease, said its board has approved a stock repurchase program of up to $59 million.