A Medical Device Daily

DaVita (El Segundo, California) reported that it has priced $400 million of 6 5/8% senior notes, due in 2013. The senior notes are part of the same series of debt securities as the $500 million of 6 5/8% senior notes issued in March 2005. The offering is expected to close on or about Feb. 23.

The notes will be offered and so only to qualified institutional buyers.

DaVita said it will use proceeds from the offering to repay a portion of outstanding amounts under the term loan portion of its senior secured credit facilities.

Illumina (San Diego) reported its intention to offer about $325 million principal amount of convertible senior notes, due 2014, through offerings to institutional buyers.

The notes will be convertible under certain circumstances. Upon conversion, holders will receive cash up to the principal amount, and any excess conversion value will be delivered in shares of Illumina's common stock.

Illumina said it also expects to grant initial purchasers an option to purchase up to another $50 million of notes. The interest rate, conversion price and other terms of the notes will be determined by negotiations between Illumina and the initial purchasers.

Illumina said it will use up to about $200 million of the proceeds from to purchase shares of its common stock in private transactions with this offering. It said it also will use a portion of the proceeds of the offering, and of the warrants to be sold to the initial purchasers and/or their affiliates, to pay the cost of the convertible note hedge transactions that the company expects to enter with them.

If the initial purchasers exercise their option to purchase additional notes, the company intends to sell additional warrants and use a portion of the proceeds to increase the size of the convertible note hedge transactions. Illumina said it will use the remaining net proceeds for other corporate purposes such as acquisitions and additional purchases of common stock.

Illumina develops tools for the analysis of genetic variation and function.

In other financing activity:

• BioMimetic Therapeutics (Franklin, Tennessee) has priced an offering of 2,829,000 shares of its common stock at $17.15 a share.

Of the shares offered, somewhat more than 2.12 million are being offered by the company, with the remainder to be sold by stockholders identified in a prospectus. BioMimetic will not receive any proceeds from the sale by the selling stockholders.

BioMimetic and one of the selling stockholders have granted the underwriters a 30-day option to purchase another 393,536 shares and 30,814 shares, respectively, of common stock to cover any over-allotments.

Deutsche Bank Securities is acting as the book-running manager, Pacific Growth Equities is acting as the co-lead manager, and First Albany Capital and AG Edwards & Sons are co-managers.

BioMimetic is developing bio-active drug/device combinations for the healing of musculoskeletal injuries and disease, including periodontal, orthopedic, spine and sports injury applications.

BioMimetic has received FDA approval for its first product, GEM 21S, as a graft material for bone and periodontal regeneration following completion of human clinical trials, which demonstrated the safety and efficacy of its platform technology in this indication. The company has clinical trials ongoing for multiple orthopedic bone healing indications. The company's product and product candidates combine recombinant protein therapeutics with tissue specific scaffolds to actively stimulate tissue healing and regeneration.

• Hatteras Venture Partners (Research Triangle Park, North Carolina) reported the first closing of its third venture capital fund, Hatteras Venture Partners III (HVP III), securing commitments for $60 million to invest in seed and early-stage companies in medical devices, diagnostics, pharmaceuticals and other opportunities in medicine. The ultimate fund size is expected to be $100 million.

HVP III may invest in opportunities throughout the country but will focus on forming and leading companies in the southeastern United States, where the level of National Institutes of Health-funded research, it said, "is high but the availability of early-stage venture capital is limited."

For its third fund, Hatteras has recruited Robert Ingram, former CEO of GlaxoWellcome and vice chairman pharmaceuticals for GlaxoSmithKline, and Douglas Reed, MD, a venture capital veteran, to join Hatteras as general partners and members of the Fund's investment committee.

Ingram, who has been an advisor to the firm, said, "We will work hard to catalyze the next wave of breakthrough improvements in medicine by commercializing products, based on the billions of dollars of basic research conducted at the outstanding universities in the Southeast."

HVP General Partner Clay Thorp said, "Venture capital flows into southeastern companies are much lower than in California and Massachusetts. This capital gap represents a tremendous investment opportunity."

Hatteras was founded in 2000 by John Crumpler and Clay Thorp with the launch of its first venture capital fund, Hatteras Venture Partners I, focused on company formation in the life sciences. In 2004, the firm added Ken Lee, former head of International Life Science at Ernst & Young, and Dana Fowlkes, MD, PhD, and raised its second fund, Hatteras Venture Partners II, a later-stage fund invested through a partnership with HBM BioCapital.