A Medical Device Daily

Ophthalmic diagnostics, therapeutics and drug-delivery firm InSite Vision (Alameda, California) said it has completed its previously reported $9 million private financing of common stock and warrants for stock.

Terms of the agreements provide for the sale of about 16.4 million newly issued shares of common stock at 55 cents a share and the issuance of warrants to purchase around 4.9 million shares of common stock at a price of $0.6325 a share. The warrants have a term of five years and will not be exercisable or transferable for six months.

InSite Vision is focused on ocular infections, glaucoma and retinal diseases. The company’s lead product, AzaSite, targets infections of the eye. AzaSite contains the drug azithromycin, an antibiotic formulated with DuraSite, InSite Vision’s drug-delivery vehicle, which offers the benefit of a less frequent, low-dosing regimen, attractive to both the eye care patient and physician.

“With this financing completed, we are now able to more fully concentrate on completing our Phase III pivotal trials with AzaSite, as well as our other programs,” said S. Kumar Chandrasekaran, PhD, InSite Vision’s president and CEO. The company said it would seek to expand the AzaSite platform to include other indications and products for the worldwide market.

In the glaucoma area, the company said it has continued focus in genomic research on the TIGR gene, among others. It said a portion of this research has been incorporated into its commercially available OcuGene glaucoma genetic test designed to detect a genetic marker, mt-1, in the “promoter” region of the glaucoma-related TIGR gene.

Paramount BioCapital (New York) served as the placement agent.

In other financing news:

• Innovative Biosensors (IBI; College Park, Maryland), a developer of rapid pathogen tests, reported raising $3.5 million in Series A financing, led by Harbert Venture Partners. Other investors include New Markets Growth Fund and the Maryland Venture Fund.

Founded in mid-2003, IBI licensed Canary technology from the Massachusetts Institute of Technology (Cambridge), a technology enabling the detection of pathogens with a combination of speed and sensitivity. The company recently launched its E. coli O157:H7 Detection Kit for food processors and said it plans to introduce more tests in the clinical diagnostics and food testing markets.

With the Series A round, IBI added Will Brooke, from Harbert Venture Partners, and Mark Grovic, from New Markets Growth Fund, to its board.

Joe Hernandez, IBI founder and CEO, said the new funding “will enable us to expand our commercial infrastructure, allowing us to bring IBI’s technology to markets currently in need of rapid, sensitive pathogen test results.”

Harbert Venture Partner, an affiliate of Harbert Management, provides capital to early stage technology and healthcare companies in the Mid-Atlantic and Southeastern U.S.

• Caris, an investment partnership founded by David Halbert, founder, former chairman and CEO of AdvancePCS, reported completing a $120 million recapitalization of Pathology Partners (Dallas), a developer of gastrointestinal (GI) diagnostic services and systems.

The proceeds were used to redeem the equity securities held by Pathology Partners’ early investors, including Sprout Group, Salix Ventures and Alliance Technology Ventures.

Current management is retaining a minority interest in the company, it said.

Pathology Partners provides quick turn-around specimen processing and reporting, each report including diagnostic descriptions and color images in “an easy-to-read, concise and complete format.” It said more than 1,200 GI physicians use its programs for integrating pathology diagnostic services with state-of-the-art technology and business solutions, including its IntelliPath and PathConnect! solutions.

• Biopure (Cambridge, Massachusetts) said that its proposed 1-for-6 reverse stock split became effective on Friday, with post-split trading then expected to begin immediately after that.

At Biopure’s annual meeting in April, stockholders authorized a reverse stock split, and on May 19, the board approved a 1-for-6 reverse split of outstanding Biopure Class A common stock to take effect May 27. The reverse split, the company said, is intended to broaden its investor base and help regain compliance with the Nasdaq’s $1 minimum bid price listing requirement by increasing the share price and decreasing the number of shares, warrants and options outstanding.

The company had somewhat more than 146 million shares of Class A common stock outstanding at the end of trading May 26. The total number of shares outstanding when the market opened on Friday was expected to total about 24.36 million. The stock is expected to trade for 20 trading days thereafter under the symbol BPURD before reverting to BPUR.

Biopure manufactures intravenously administered oxygen therapeutics. The company is developing Hemopure, or HBOC-201, for a potential indication in cardiovascular ischemia and, in collaboration with the U.S. Naval Medical Research Center, for an out-of-hospital trauma indication.

• Healthcare real estate investment trust Ventas (Louisville, Kentucky) said it has priced an offering of $175 million of 6 3/4% senior notes, due 2010, and $175 million of 7 1/8% senior notes, due 2015. Sale of the notes, issued by Ventas’s operating partnership, is expected to close June 7. The notes will mature on June 1, 2010, and June 1, 2015, respectively, and will be senior unsecured obligations.

Ventas said it would use the offering proceeds to fund a portion of its acquisition of Provident Senior Living Trust, expected to close on June 7. Ventas owns and invests in hospitals, skilled nursing facilities, assisted and independent living facilities.