Medical Device Daily

SenoRx (Aliso Viejo, California) field an amended registration statement with the Securities and Exchange Commission last week for an initial public offering of its stock, which it plans to register under the symbol SENO.

The company, which manufactures biopsy systems and breast tissue markers used in the diagnosis and treatment of breast cancer, has filed to sell 5.5 million shares at $11-$13 per share. The company said net proceeds of about $59.4 million will be used to repay debt, expand product development, regulatory and clinical initiatives.

The company also granted the underwriters of the offering the right to purchase up to 825,000 additional shares of common stock to cover any over-allotments. The underwriters can exercise this right at any time within 30 days after the closing of this offering.

If all the shares are exercised, the company expects to net up to $68.6 million, assuming the shares price out at the $12 midpoint.

The company said it specifically plans to use $36 million of the IPO proceeds for sales and marketing initiatives to support the ongoing commercialization of its EnCor system and other products and products under development; and $9 million for research and development activities, including support of product development, regulatory and clinical initiatives.

The company's primary diagnostic product, EnCor, is a vacuum-assisted breast biopsy probe system with which a doctor may collect tissue samples and biopsies through a transparent tissue collection chamber. The system allows the doctor to examine the quality of the specimen mid-probe, rather than performing numerous biopsies. The system can also be used in conjunction with other imaging equipment such as MRIs and ultrasounds.

The company received FDA 510(k) clearance to market the EnCor system in 2004. Over the subsequent period ending in October 2005, the company said it began selling the product on a limited basis while it focused on enhancing certain elements of the product to optimize its performance. It made a full commercial launch of the system in November 2005.

SenoRx said it expects to apply for 510(k) clearance for another product, its Radiation Balloon in the second half of 2007.

It also is developing breast surgery and breast reconstruction devices, its Single Step, Shape Select and GED, for which it respectively expects to enter limited launch phases in late 2008.

The company, founded in 1998, incurred net losses of $6.8 million in 2004, $8.6 million in 2005 and $15.4 million in 2006, and, as of that date, had an accumulated deficit of about $65.5 million.

The company underwent an inspection of its facilities by the FDA in April 2005, which resulted in the issuance in July 2005 of a warning letter related to, among other things, its failure to adequately validate manufacturing changes it undertook to prevent the tip of the Gel Mark Ultra Biopsy Site Marker from shearing off in the patient's breast during the biopsy procedure, which it had experienced.

The company said it responded to the FDA with a comprehensive corrective action plan in August 2005 and believes it is now in compliance.

In other financing news:

• DePuy Spine (Raynham, Massachusetts), a business of Johnson & Johnson (J&J; New Brunswick, New Jersey), reported a collaboration with Axial Biotech (Salt Lake City), a privately held spine company, to develop gene-based prognostic tests for scoliosis, affecting about 6 million people in the U.S., mostly children ages 10-15.

In addition, J&J Development Corporation has made an equity investment in Axial, the amount not disclosed.

"Axial Biotech has made great strides in DNA-based technology and together we believe we can bring a product to market that will transform the treatment of scoliosis and help surgeons, for the first time, predict through genetic testing, which cases of scoliosis are likely to progress significantly, to help better determine treatment," said Gary Fischetti, president of DePuy.

"We believe that Axial Biotech's prognostic DNA tests can meet a major clinical need facing spine deformity surgeons and their patients today, to pre-symptomatically discriminate between severe and mild scoliosis," said John Climaco, CEO of Axial. "We have already discovered several locations in the human genome associated with scoliosis. DePuy Spine will help us bring this innovative product to the marketplace in the best way possible."

According to National Scoliosis Foundation (Stoughton, Massachusetts), about 38,000 people get spinal fusion surgery each year in the U.S. to correct scoliosis and about another 30,000 people in the U.S. wear some type of back brace to help stop the progression of the disorder.

Axial is pursuing DNA-based pre-symptomatic and prognostic tests for common spinal disorders. Axial is also developing a range of minimally invasive devices for spine surgery.

• GE Healthcare Financial Services (Chicago) has provided a $34.9 million seven-year, first mortgage to Juniper Communities (Bloomfield, New Jersey), an investment company that owns and operates 16 senior housing facilities throughout Florida, Colorado, Pennsylvania and New Jersey.

The company said it will use the mortgage to capture equity from existing properties and grow its businesses.