A Medical Device Daily

The end of last week so a flurry of financing reports, with three med-tech firms and a stem cell company gathering in more than $55 million in new equity and a health management company refinancing $150 million.

Stereotaxis (St. Louis) reported received commitments from certain investors to purchase 1,919,000 newly issued shares of its stock at $10.50 a share. The company expects to receive net proceeds of about $20.1 million.

The offering was expected to close today.

Stereotaxis manufactures a cardiology instrument control system for use in a hospital's interventional surgical suite to enhance the treatment of arrhythmias and coronary artery disease.

The Stereotaxis System is designed to enable physicians to complete more complex interventional procedures by providing image guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites. This is achieved using computer-controlled, externally applied magnetic fields that govern the motion of the working tip of the catheter or guidewire, resulting in improved navigation, shorter procedure time and reduced X-ray exposure.

Stereotaxis reports that the system has received regulatory clearance in the U.S., Europe, and Canada.

ATS Medical (Minneapolis), a manufacturer of cardiac surgery products and services, reported agreements with institutional investors for the placement of about 8,125,000 shares of common stock at $2 a share, together with warrants to purchase about 3.25 million shares at $2.40 a share. Proceeds will be about $16.25 million.

ATS said it will use the proceeds for working capital and general corporate purposes. The transaction is subject to customary closing conditions.

RBC Capital Markets acted as the sole placement agent for this offering.

ATS develops products and services focused on cardiac surgery. The company reports that more than 135,000 ATS Open Pivot Heart Valves, which utilize a pivot design resulting in "a low risk profile," have been implanted in patients worldwide. The ATS 3F brand encompasses multiple tissue heart valve product offerings at varying steps from market introductions to clinical trials to development projects that incorporate less-invasive valve replacement technology. ATS also is developed the ATS Simulus annuloplasty products for heart valve repair, SurgiFrost and FrostByte products for surgical cryoablation of cardiac arrhythmias, RTI-Cardiovascular for allograft tissue services, and the development of PARSUS blood filtration technology.

Sanarus Medical (Pleasanton, California), a developer of minimally invasive devices for the diagnosis and treatment of breast tumors, reported closing a $15 million round of financing led by Easton Capital Partners and Mosaix Ventures, both focused on healthcare investment.

Investing in the Series E round are current investors U.S. Venture Partners, Forward Ventures, Alta Partners, Federated Kaufmann Fund, Pequot Ventures, Industry Ventures and CHANNEL Medical Partners.

With the financing, Sanarus reported the addition of John Friedman of Easton Capital Partners, to its board.

Sanarus is in early commercialization of its Visica Treatment System for cryoablation of breast fibroadenomas, offering a minimally invasive, office-based procedure to treat benign breast tumors versus traditional open surgery.

Effective Jan. 1, Sanarus obtained a new Category 1 CPT reimbursement code for the cryosurgical ablation of fibroadenomas.

Sanarus also markets the Cassi Rotational Core Biopsy System, an automated handheld device which uses patented Stick FreezeTechnology to secure large contiguous core biopsy samples from the breast. It also markets the ImarC Tissue Marker System, tissue markers permanently visible under all imaging modalities.

In other financing activity:

• Neuralstem (Rockville, Maryland) reported raising $5,135,000 in a private placement of 2,054,000 units ($2.50 per unit) to a group of investors. Each unit consists of one share of common stock and one-half warrant exercisable at $3 a share.

Neuralstem said it will use proceeds from the placement for its anticipated first human trial, as well as working capital and other general corporate purposes.

Richard Garr, president/CEO of Neuralstem president, said, "We are pleased by the quality of institutional participation and view the placement as solidifying the company's balance sheet in preparation for a National Exchange listing, as well as providing equity capital sufficient to fund our first human trials expected to begin during calendar 2007."

T.R. Winston and Company acted as placement agent.

Neuralstem says that its technology enables the ability to produce neural stem cells of the human brain and spinal cord in commercial quantities, and the ability to control the differentiation of these cells into mature, physiologically relevant human neurons and glia.

Major central nervous system diseases targeted by Neuralstem include: ischemic spastic paraplegia, traumatic spinal cord injury, ALS, and Parkinson's Disease.

• Centene (St. Louis) reported that it has priced $175 million of its 7 1/4% Senior notes, due 2014, in a private placement expected to close on or about March 22.

Centene said it will use a portion of the proceeds to refinance about $150 million of indebtedness under its revolving credit facility, with any additional proceeds going to general corporate purposes.

Centene is a multi-line healthcare enterprise providing programs and services to those receiving benefits under Medicaid, including Supplemental Security Income (SSI) and the State Children's Health Insurance Program (SCHIP). The company operates health plans in Georgia, Indiana, New Jersey, Ohio, Texas and Wisconsin. In addition, the company contracts with other healthcare and commercial organizations to provide services such as behavioral health, disease management, long-term care, managed vision, nurse triage, pharmacy benefit management and treatment compliance.