A Medical Device Daily

Inovio Biomedical (San Diego) reported completing a previously disclosed financing of $15.8 million through the sale of common stock to institutional and accredited investors, including Merck (Whitehouse Station, New Jersey) and Vical (San Diego).

The common stock was priced at $2.40 a share, a premium to the closing price on Dec. 15. The company also issued five-year warrants to purchase 35% of the number of shares of common stock sold in the offering at about $2.93, a 25% premium to the Dec. 15 closing price.

Additionally, the company issued shares of common stock and warrants on the same terms as the corresponding securities that were sold for cash to certain holders of Inovio's outstanding cumulative convertible preferred stock in exchange for their preferred stock according to existing participation rights applicable to Inovio's new equity financings. Gross proceeds from this funding include $2.43 million, due from an investor, to Inovio in January 2005.

Inovio said the financing will be used for working capital, including support of clinical trials for its lead product, its Selective Electrochemical Tumor Ablation System, and general corporate purposes.

Spirus Medical (Stoughton, Massachusetts), a developer of diagnostic and therapeutic systems for gastroenterology, urology and gynecology, reported raising $5.9 million in a Series A preferred stock financing.

BioVentures Investors, Point Judith Capital and Village Ventures, along with a group of accredited individual investors, participated in the financing.

The company also reported receiving FDA 510(k) clearance for its first product line, the Endo-Ease endoluminal advancement system.

Endo-Ease says that its technology, in conjunction with a flexible endoscope, uses rotation to facilitate a gentler, more efficient approach to gastrointestinal endoscopy, while enhancing its diagnostic and therapeutic function.

“This funding provides us with the resources to begin manufacturing and commercialization of the Endo-Ease product line later this year,“ said Ross Garofalo, Spirus CFO.

Marc Goldberg of BioVentures Investors, Gina Raimondo of Point Judith Capital and Michael Benoit, an individual investor, will join Spirus co-founders Bob Ailinger, Jim Frassica, Steve Tallarida and Andrea Patisteas on its board.

In other financing activity:

• Diagnostic test kit maker Corgenix Medical (Westminster, Colorado) reported closing two private financing agreements with institutional and accredited investors for up to $3,363,500.

The first private placement transaction consists of $2 million in Series A convertible preferred stock, at $1 a share. The shares are convertible initially into 2.8571428571 shares of the company's common stock.

The $2 million in gross proceeds and preferred stock certificates have been placed in escrow and will be released to Corgenix upon a successful vote among shareholders to increase the company's authorized common shares to allow for the conversion of the preferred shares. Warrants to acquire up to 15 million additional common shares, at prices ranging from 40 cents to 60 cents per share for up to $7.5 million in additional cash proceeds, were provided to the investor in this equity transaction.

A second transaction, completed by existing Corgenix institutional investors, consists of $1.5 million in secured convertible term notes, due 2008. This transaction generated $1,363,500 in gross proceeds, the net amount received by the company. Warrants to acquire about 3.8 million shares of the company's common stock, at 23 cents a share, were provided to the investors.

Corgenix makes specialized diagnostic kits for immunology disorders, vascular diseases and bone and joint disorders.

• MedicalCV (Inver Grove Heights, Minnesota) provided additional perspective on its recent acquisition of previously issued 5% Series A convertible preferred stock and the exercise of outstanding warrants for the purchase of 22,969,500 shares of common stock at $0.325 per share.

A cash exercise of warrants to purchase 18,517,500 shares provided $5.6 million in new cash to the company. An additional warrant for 4,452,000 shares was exercised on a cashless basis.

The company's core technology is the AtriLaze surgical ablation system for use in cardiac tissue ablation procedures. With the use of its platform of laser-based technology, the company is focused on developing a truly minimally invasive procedure for the treatment of AF.

“The new cash generated from this transaction increased our cash position to approximately $12 million as of Dec. 31, 2005, and further enhances our ability to launch our third generation minimally invasive system for cardiac tissue ablation and the potential treatment of atrial fibrillation, which is expected in the second half of 2006,“ said Marc Flores, president and CEO.

• Amphion Innovations (New York), a developer of life sciences businesses, reported completing additional investments of $2.23 million in its portfolio companies, including an additional $500,000 in Motif Biosciences (New York). Motif is a population genetics company working to identify the genetic causes of major diseases by working with human genetic data from the Persian Gulf states. An additional $750,000 has been invested in Axcess International (Carrollton, Texas). Axcess provides radio frequency identification systems for physical security and supply chain efficiencies. And $980,000 has been invested in FireStar Software (Boxborough, Massachusetts), as part of a Series E financing. FireStar is a business software software company.

“Since Amphion's IPO in the summer of 2005, each of these portfolio companies has made strong progress,“ said Richard Morgan, CEO of Amphion.

• Omega Healthcare Investors (Timonium, Maryland) reported that in connection with its current tender offer and consent solicitation for all of its outstanding 6.95% notes, due 2007, it received tenders and consents representing 79.3% of the aggregate principal amount of the notes outstanding. The total consideration to be paid to holders who have validly tendered their notes will be $1,031.02 for each $1,000 principal amount of notes validly tendered and not validly revoked, which includes a consent payment of $30 per $1,000 principal amount of notes. The consideration for the tendered notes and consents will be paid from the proceeds of Omega's offering of $175 million aggregate principal amount of its 7% senior notes due 2016.

The redemption date for the notes is Jan. 18. The aggregate redemption price plus all accrued and unpaid interest for the notes is $1,066.13 per $1,000 principal amount of notes.

Omega is a real estate investment trust investing in and providing financing to the long-term care industry.