Medical Device Daily Staff Writer with Medical Device Daily Staff Reports

Genoptix (Carlsbad, California), a provider of specialized laboratory and diagnostic services for community-based hematologists and oncologists, filed to raise $86.25 million in its initial public offering.

Until the company prices, it will join 11 other life science IPO-hopefuls currently waiting in the wings. In the first quarter, 12 biotechs raised a total of $523 million though IPOs, with an average take of $43.6 million.

Genoptix said it will use the proceeds from its offering to hire additional personnel, establish a second laboratory facility, expand back-up systems, repay debt and pursue collaborations or acquisitions. Any remaining funds would go to working capital and general corporate purposes.

Genoptix has one thing many biotechs can't claim: revenues.

The company provides services to help hematologists and oncologists diagnose, make treatment decisions and monitor the effectiveness of treatments in cancer patients. Those services generated $24 million in revenues in 2006 and $10.7 million just in the first quarter of 2007.

Genoptix said its revenues have grown at a compounded quarterly growth rate of 48% for the nine quarters ended March 31, 2007.

And Genoptix believes there's plenty of room for more growth, considering that it currently holds just 4% of the billion-dollar-plus bone marrow-testing market. The company estimates that more than 300,000 bone marrow procedures and 200,000 blood-based tests for liquid and solid tumors are performed annually.

Genoptix's offerings center on Compass, a package that allows the company's hematopathologists to evaluate a sample, determine the appropriate tests, and deliver a report back to the physician. Compass includes a histopathology analysis to determine the nature and extent of the disease, six-color flow cytometry to characterize and measure cells, cytogenetics tests to reveal chromosomal abnormalities, polymerase chain reaction to follow progression of the disease and response to therapy, and circulating tumor cell tests for metatstatic breast cancer patients.

Chart, Genoptix's other key offering, provides a similar suite of services designed to be repeated multiple times after diagnosis to track the cancer's progression and the effectiveness of treatments. While Genoptix said more than half of the patient samples it processes utilize the Compass or Chart packages, the company also offers its diagnostic services individually.

Genoptix also offers services to pharmaceutical companies including assay development, support in defining clinical trial endpoints, and patient eligibility and stratification analysis for clinical trials.

Lehman Brothers, Banc of America Securities and Cowen and Co. are underwriting the offering.

Genoptix applied to list its common stock on the Nasdaq Global Market under the ticker symbol GXDX.

In other financing news:

• Electro-Optical Sciences (EOS; Irvington, New York), focused on development of MelaFind, a non-invasive, point-of-care instrument to assist in the early diagnosis of melanoma, reported signing "definitive documents" with institutional and accredited investors to close a private placement of about $11.5 million.

The placement is comprised of somewhat more than 2 million shares of common stock at $5.75, and 500,041 common stock warrants exercisable at $8 for 54 months beginning six months after the closing.

Cowen and Co. acted as the lead placement agent for the transaction and ThinkEquity Partners acted as a co-placement agent.

MelaFind, EOS' flagship product, features a hand-held imaging device that emits light of multiple wavelengths to capture images of suspicious pigmented skin lesions and extract data. Using sophisticated algorithms, the data are then analyzed against a database of melanomas and benign lesions in order to provide information to the physician and produce a recommendation of whether the lesion should be biopsied.

Melanoma is the deadliest of skin cancers, responsible for about 80% of all skin cancer deaths. Unless melanoma is detected early and excised with proper margins, the patient survival rate is poor, as there is currently no cure for advanced stage melanoma.

• Community Health Systems (CHS; Franklin, Tennessee) reported completing its previously disclosed tender offer for any and all of its $300 million outstanding amount of 6¹/₂% senior subordinated notes, due 2012, and related consent solicitation.

The company also reported completion of the previously disclosed tender offer for any and all of the $600 million outstanding aggregate principal amount of the 7% senior notes due 2012 of Triad Healthcare (Plano, Texas) and $600 million outstanding aggregate principal amount of Triad's 7% senior subordinated notes, due 2013

A total of $299,996,000 of CHS notes (about 99.9%), $599,920,000 of Triad 2012 notes (about 99.9%) and $599,321,000 of Triad 2013 notes (about 99.9%) were tendered prior to the expiration date of midnight, EST, July 30.

The company has accepted for purchase all CHS notes tendered in accordance with the tender offer and consent solicitation, resulting in a total payment (including amounts previously paid) of $315 million, including about $2 million in accrued and unpaid interest, to holders of the CHS notes.

CHS is the largest publicly-traded hospital company in the U.S., operating general acute care hospitals in non-urban and mid-size markets throughout the country.

CHS consummated its $6.8 billion acquisition of Triad late last month (Medical Device Daily , July 27, 2007).

• BrainStorm Cell Therapeutics (BCT; New York; Petach Tikvah, Israel), a developer of adult stem cell technologies and therapeutics, reported that it has come to a restructured research and license agreement with Ramot at Tel Aviv University with respect to payment obligations for its technology license, and that the Double U Fund, a lender to the company, has also come to an agreement over funds owed to it by BrainStorm.

The waiver and release from Ramot ensures that BrainStorm's technology license is securely held by BrainStorm, and the resolution to the Double U Fund debt obligation improves BrainStorm's financial condition, it said.

"In the last month, BrainStorm has made significant progress and improvements to its financial condition," said David Stolick, BrainStorm's CFO. "From electing Chaim Lebovits as president, Moshe Lion to the board of directors to obtaining a funding commitment for $5 million to winning a grant from Israel's prestigious Chief Scientist Office and now by resolving and restructuring payment and debt obligations that eliminate some significant risks BrainStorm was facing, the business is now being properly funded and is well on its way toward achieving its goals."

BCT is developing adult stem cell therapeutic products, derived from autologous bone marrow cells for the treatment of neurodegenerative diseases.