A Medical Device Daily

IDev Technologies (Houston) a developer of minimally invasive stent systems for the treatment of peripheral vascular and non-vascular diseases, reported closing a $19 million Series B round of financing.

Three new investors joined the financing: Rivervest Venture Partners, Bay City Capital and Heron Capital. Additionally, existing investors including PTV Sciences, members of the senior management team and advisors to the company also participated.

Dennis Wahr, MD, from Rivervest and Jeanne Cunicelli from Bay City Capital have been appointed to the IDev board as part of the financing arrangement.

"This additional capital will allow us to aggressively execute on our commercialization and clinical trial plans for the Supera stent in the U.S. and Europe beginning in early 2007," said Thomas Tully, CEO and chairman of IDev.

The company said it believes that the Supera stent represents an advance over traditional laser-cut nitinol tube stents by offering more than significantly greater radial strength than the next strongest offering. Unlike traditional laser-cut nitinol tube stents, the interwoven nitinol wire design is designed to allow for enhanced product strength without compromising product flexibility, according to IDev.

The stent has been FDA 510(k) cleared for relief of biliary strictures and CE-marked for both peripheral vascular and non-vascular applications.

Bariatric Partners (Charlotte, North Carolina) said it completed its second round of venture financing, raising $12 million in additional equity from an investor group lead by Frazier Healthcare Ventures.

Frazier was joined in this round by first-round investors New Enterprise Associates and Woodbrook Capital. This financing brings the total equity raised by the company to $24.55 million.

Concurrent with the financing, Nader Naini, a general partner at Frazier Healthcare Ventures, joined the company's board.

Bariatric Partners was formed in September of 2005 to partner with U.S. physicians to own and operate outpatient surgery centers focused on the needs of the morbidly obese. The company opened its first surgery center in Thousand Oaks, California, in August and says it began doing procedures in its outpatient center in Houston this month. The third partnership in Tampa, Florida will do its first procedures in December.

Several new centers are under development and will open in 2007.

In other financing activity:

• MannKind (Valencia, California) reported that it intends to offer to sell, subject to market and other conditions, 17.5 million shares of its common stock in an underwritten public offering. The company also intends to grant the underwriters a 30-day option to purchase up to an additional 2,625,000 shares of its common stock to cover over-allotments. All of the shares are being offered by the company.

MannKind focuses on the development of therapeutic products for diseases such as diabetes and cancer. Its lead product, the Technosphere insulin system, is currently in Phase III clinical trials in the U.S., Europe and Latin America to study its safety and efficacy in the treatment of diabetes.

With the offering, MannKind said it intends to offer to sell, subject to market and other conditions, $100 million of senior convertible notes, due 2013, in an underwritten public offering. It will grant the underwriters a 13-day option to purchase up to an additional $15 million of notes to cover the over-allotments.

The underwriters have reserved up to 8.75 million shares in the common stock offering and $50 million of notes for sale to company CEO and chairman and principal stockholder, Alfred Mann. The number of shares and the amount of notes allocated to Mann in the common stock and notes offerings will depend on market conditions and may be more or less than the amount initially reserved for allocation, the company said.

J.P. Morgan Securities and Merrill Lynch & Co. are acting as joint lead managers and joint bookrunners of each of the public offerings. Wachovia Capital Markets, CIBC World Markets and Leerink Swann & Co., are acting as co-managers of the common stock offering.

• Cardica (Redwood City, California) reported that it achieved its third product development milestone for the X-Port vascular access closure device. As a result, Cardica received a $500,000 payment from Cook (Bloomington, Indiana), Cardica's partner for the development and commercialization of the X-Port device, an automated system designed to close access openings in femoral arteries after interventional vascular procedures.

"We are pleased with the development progress of the X-Port system and believe that Cardica's product offers an innovative, single-product solution to effectively address the growing need for a next-generation vascular access closure device," said Brian Bates, senior VP, business development for Cook. "Pending the successful completion of animal model studies, we look forward to initiating human clinical trials in 2007."

In December 2005, Cardica and Cook entered into an agreement to develop the X-Port device. Cardica is responsible for design and pre-clinical development, and Cook is responsible for clinical development and regulatory approval. If the product receives regulatory approval, Cook will have commercialization rights to market the X-Port device.

Cardica said it has already achieved a total of $1.5 million in product development milestone payments under the collaboration to date, including the payment in connection with the most recent milestone achievement, and could receive another $500,000 upon completing the final development milestone. Cardica is also entitled to receive royalties on any future worldwide sales by Cook.

An estimated 8.5 million diagnostic and interventional catheterization procedures were performed worldwide in 2005, all of which required access site closure either by manual compression or alternative vascular closure devices and techniques. In about 45% of these cases, a closure device was used, with this percentage steadily increasing.

The worldwide market for femoral artery closure devices alone was estimated to be around $500 million in 2005, expected to increase to more than $750 million by 2008.