Medical Device Daily Executive Editor
Bioheart (Sunrise, Florida), a company hoping to commercialize cell therapy for regeneration of the heart – a sector that so far has produced successes only in extremely small trials and with no regulatory approvals to speak of — has filed with the U.S. Securities and Exchange Commission to raise $46.9 million after expenses from a planned initial public offering.
Bioheart expects the offering, which totals 3.6 million shares, to price between $14 and $16 per share. The estimated proceeds assume an offering price of $15 a share.
Bioheart is developing therapies that use autologous cells — meaning cells from the patient’s own body — to treat heart damage.
Bioheart said it plans to use the IPO proceeds to fund clinical trials, make payments related to its license agreements, further develop its intellectual property portfolio, build a sales and marketing force and repay accrued interest on certain debt obligations.
Bioheart said it will proceed with a Phase II/III trial of its lead product candidate, MyoCell, in North America, Europe and Israel. It said it expects to have final data available for the trial by 3Q09.
For the six months ended June 30, Bioheart widened its losses to $5 million, from $3.9 million in the prior-year period. During the same period, the company increased its revenues to $208,000, from $75,000.
Among the risks listed in its SEC filing, the company notes that no company has won U.S. or European regulatory approval for a cell-based therapy product for the treatment of heart damage. “Cell-based therapy products, in general, may be susceptible to various risks, including undesirable and unintended side effects, unintended immune system responses, inadequate therapeutic efficacy or other characteristics that may prevent or limit their approval by regulators or commercial use.”
It adds: “Although our clinical research to date suggests that MyoCell may improve the contractile function of the heart, we have not yet been able to demonstrate a mechanism of action and additional research is needed to precisely identify such mechanism.” And: “Although we intend to seek regulatory approval of MyoCell in the United States based upon the results of the Phase II/III MARVEL Trial, there can be no assurances that the FDA will consider the MARVEL Trial pivotal. Accordingly, we may be required to conduct additional trials prior to obtaining commercial approval, if ever, in the United States.”
The company says also in its SEC filing that it does not hold patent rights to protect its technology outside the U.S.
Bioheart expects to have 16.9 million shares outstanding after the offering.
Merriman Curhan Ford and Dawson James Securities are serving as lead underwriters for the IPO. In previous filings, BMO Capital Markets, Janney Montgomery Scott and Merriman Curhan Ford were listed as underwriters.
Bioheart has given the underwriters an option to buy up to another 536,250 shares to cover over-allotments.
Since launch, the company has had net losses of about $13.2 million: $7.3 million and $5.5 million in 2006, 2005 and 2004, respectively.
The company plans to list its shares on the Nasdaq under the symbol BHRT.
In other financing activity:
• Diomed Holdings (Andover, Massachusetts), a developer of minimally invasive medical technologies, including its EndoVenous Laser Treatment (EVLT) for varicose veins, said it has entered into a $10 million senior secured term loan with Hercules Technology Growth Capital, effectively monetizing the damages award arising out of its ‘777 patent litigation.
Under the terms of the loan, $6 million was funded at closing on Sept. 28, with the remaining $4 million to be funded at Diomed’s option, between Jan. 31, 2008, and March 30, 2008.
No principal payments are due under the term loan until July 1, 2008, at which time 24 monthly installments of principal and interest will be paid until maturity on July 1, 2010. The loan is secured by the $14.7 million patent infringement judgment awarded to Diomed against AngioDynamics.and Vascular Solutions in May 2007, as well as the assets of Diomed and its subsidiaries. In addition, Diomed has issued a warrant to Hercules to acquire about 87,000 shares of its common stock with a price of 70 cents a share.
David Swank, CFO of Diomed, said, the deal works to accelerate the receipt of the award and convert it to available cash.
“The completion of our latest financing transaction supports our strategy to drive market share growth in the endovenous laser treatment of varicose veins,” said
Swank added: “Although we would have preferred to avoid any dilution to our current stockholders, we believe that dilution from the current transaction is significantly less than what we were likely to incur in an outright sale of common shares in a PIPE or similar equity financing.”
Diomed develops minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products.
• Aspect Medical Systems (Norwood, Massachusetts) reported filing a shelf registration statement with the SEC for re-sale of up to $125 million of 2.50% Convertible Senior Notes, due 2014, which the company issued in a private placement in June 2007, and shares of Aspect common stock, $0.01 par value, issuable upon conversion of the notes.
The holders of the 2.50% Convertible Senior Notes, due 2014, and the common stock which may be issued upon conversion of such notes, may sell these securities in one or more offerings with the size, price and terms to be determined at the time of sale.
Any offering of securities covered by the shelf registration will be made only by means of written prospectuses and prospectus supplements.
Aspect develops brain monitoring technology. To date, it says that its Bispectral Index (BIS) technology has been used to assess about 20 million patients and has been the subject of more than 2,800 published articles and abstracts.
It says that BIS technology is installed in around 80% of hospitals listed in the July 2007 U.S News and World Report ranking of America’s Best Hospitals and in about 58% of all domestic operating rooms.