A Diagnostics & Imaging Week

Virtual Radiologic (VRC; Minnetonka, Minnesota) has filed a registration statement with the Securities and Exchange Commission (SEC) for an initial public offering of up to $75 million.

The number of shares and pricing range has not been determined. The company will list on the Nasdaq under the ticker symbol VRAD.

VRC is a provider of remote diagnostic image interpretation services, or teleradiology, in the U.S., serving radiology practices, hospitals, clinics and diagnostic imaging centers by providing image interpretations 24/7, 365 days a year.

It employs a distributed operating model providing a team of American Board of Radiology-certified radiologists with the flexibility to choose the location from which they work, primarily in the U.S., thus serving clients throughout the country.

It describes its technology as a "robust, highly scalable communications network incorporating encrypted broadband Internet connections and proprietary workflow management software." It says that it believes it has the largest group of U.S.-based radiologists dedicated to the practice of teleradiology

VRC was formed through a merger between Virtual Radiologic Consultants, a Minnesota corporation, and Virtual Radiologic Consultants, a Delaware corporation, that was consummated on May 2, 2005. On Jan. 1, 2006, Virtual Radiologic Consultants, the Delaware corporation and the surviving entity in the merger, changed its name to Virtual Radiologic Corporation.

The company reports revenue growth from about $1 million in 2002 to $5.9 million in 2003; $12.9 million in 2004; and $27 million in 2005. First-quarter revenues for the three months ended March 31, 2005, grew from around $5 million to around $9.7 million for the three months ended March 31, 2006.

Its 2004 operating loss was $1.2 million in 2004; $3.2 million in 2005; and $1.6 million for the three months ended March 31, 2006. VRC said: "[W]e expect our operating expenses to increase in the future as we expand our sales and marketing activities, increase our technology development efforts, hire additional personnel and comply with the requirements related to being a public company."

Among its risks, VRC says that it licenses its image management software from Fujifilm Medical Systems USA—one of its minority stockholders—and depends on updates or enhancements from Fujifilm. "Our dependence on Fujifilm . . . could limit our ability to effectively update and enhance our workflow system," the filing said.

Goldman, Sachs & Co. will act as the sole book-runner and co-lead manager, Merrill Lynch & Co. as co-lead manager and William Blair & Co. as co-manager for the proposed offering.

In other financing news:

• Celerus Diagnostics (Santa Barbara, California) reported completion of $9 million in financing by private investors.

Page Erickson, founder and CEO of Celerus, said, "With this additional investment, our Rapid Diagnostic System will be completed and presented to the market by spring of 2007."

Founded in 2004, Celerus's core technology is a rapid tissue-staining system designed for histology and cytology testing, including ImmunoHistoChemistry (IHC). Celerus says its system is six times faster than the best available system on the market, reducing test turn-around time from 90 minutes to 15 minutes or less. It says that this supports guidelines from the College of American Pathologists (Northfield, Illinois) prescribing 20-minute turn-around-time for intraoperative frozen tissue sections.

Michael Sarrasin, chief operations officer of Celerus, said, "It's clear [this] technology will impact the pathology lab greatly with its speed and ease-of-use and, most importantly, improve cancer patient care. Rapid biopsy diagnostics is truly the next revolution in pathology."

• Tm Bioscience (Toronto) reported completing a private placement of unsecured subordinated debt, together with common share purchase warrants, for proceeds of C$6.24 million.

The company said that the funds will be used to advance its pipeline of genetic tests and for general working capital.

The debentures carry an interest rate of 11% per year, with interest payable monthly in arrears and principal to be repaid in full at either 12 months from the closing date or within 30 days in the event of any cash infusion that results in proceeds to the company of $15 million. Should the company receive any cash infusion of less than $15 million or more it will repay a pro-rata portion of the debentures.

Investors will receive 250 warrants per $1,000 amount of the debentures purchased. Each warrant will be exercisable for one common share at a price of $1.15 for the period expiring five years from the closing date.

Tm Bioscience develops tests for genetic disorders, drug metabolism and infectious diseases.

• Pittsburgh Life Sciences Greenhouse (PLSG), a private/public life sciences partnership, reported investing $100,000 in RedPath Integrated Pathology (Pittsburgh), a provider of cancer testing that integrates traditional pathology practice with molecular genetic analysis.

"RedPath's patented platform approach, PathFinderTG, has made tremendous advances in the diagnosis of cancer," said Platika. "The company has struck the right balance between pathology, molecular analysis and the information sciences to successfully apply genomic advances in the clinical setting."

RedPath's PathFinderTG is used to resolve "uncertain" diagnoses by answering questions from pathologists and clinicians when standard testing is inconclusive. The company says it has been validated for use in various specialties, such as cancers of the gastrointestinal tract, pancreas, and brain.

PLSG is a public/private partnership, founded by the University of Pittsburgh, Carnegie Mellon University, UPMC Health System, and the Commonwealth of Pennsylvania.