Bankrupt ReGen Biologics Inc. (OTC:RGBO) took out a loan from a company affiliated with one of its investors. The new debt represents Regen’s second financing deal with the company since filing for Chapter 11 bankruptcy two weeks ago.
Sports Medicine Holding Company LLC — an affiliate of Ivy Healthcare Capital II LP, which is one of ReGen’s secured creditors in addition to one of its largest institutional shareholders — entered a debtor-in-possession financing deal with ReGen through which the orthopedic device maker can borrow up to $1.4 million, according to a Securities & Exchange Commission filing.
Loans taken through the deal, which is still subject to U.S. Bankruptcy Court approval, mature on June 20 and come with an interest rate of 12 percent per year and 18 percent if ReGen defaults. The funds are also secured by "substantially all of" ReGen’s assets, according to the filing.
ReGen has already raised $1 million through a private placement deal with the Sports Medicine Holding Company. The private placement comes in the form of senior secured notes due August 31, which carry a 12 percent annual interest rate.
The bankruptcy filing added yet another layer to the ReGen story, featuring a protracted and public battle with the FDA for nearly two years. Earlier this month, the FDA rescinded its 2008 510(k) clearance of the Menaflex device, a bio-absorbable mesh implant designed to encourage the re-growth of damaged knee cartilage. The rescission means Hackensack, N.J.-based ReGen needs to keep the device off the U.S. market until it can prove its safety and effectiveness to the FDA’s satisfaction.
ReGen wasn’t shy about voicing its displeasure over the rescission, with CEO Gerald Bisbee calling it “totally unbelievable.”
The FDA said it wants ReGen to “discuss the appropriate marketing pathway for the device and what data it would need to provide a reasonable assurance of safety and effectiveness,” five years after the company began the 510(k) application process.
ReGen has sunk $30 million into meeting requirements set by the FDA’s Center for Devices & Radiological Health, according to Bisbee, “only to have the agency reverse decisions made by previous CDRH officials by stating that they were in error with no substantial evidence that is true.”
Here’s a roundup of the latest dealflow and investment news:
- Interrad Medical attempts to raise $10 million
Interrad Medical Inc. is aiming to raise $10 million, according to a filing with the Securities & Exchange Commission. The Plymouth, Minn.-based medical device company, which makes a device to secure catheters, has already raised $1.64 million. Last year, the company was looking to raise $6 million and was able to raise nearly $2 million, according to the filing. Interrad’s SecurAcath Universal Subcutaneous Catheter Securement System won a 510(k) clearance in July, writes MedCity News.
- Cianna closes on $12 million in funding
Cianna Medical, a breast brachytherapy company, announced that it has successfully completed a funding round totaling $12 million. The Series B round was led by an investment of $8 million from Novo Ventures, Novo A/S. Continuing investors participating in this round were Fog City Fund, Emergent Medical Partners, and Saints Capital.
- Meritech Capital drums up $425 million with fourth fund
Meritech Capital Partners (MCP), a late-stage venture capital firm, announced the closing of Meritech Capital Partners IV, a $425 million late-stage venture capital fund. The fund will continue MCP’s successful strategy of investing in rapidly-growing technology companies primarily in the United States. This fund brings the firm’s cumulative capital under management to $2.6 billion. With MCP IV, the firm will primarily target four sectors: Internet and Digital Media, Communications and Wireless, Enterprise IT and Medical Devices.
- Gates Foundation grants another $100,000 for global health ideas
The Gates Foundation announced its latest set of grants from its Grand Challenges Exploration program, saying that it has found some high-growth prospects in vaccines, drugs and diagnostics. The foundation has already given 88 scientific teams from around the world $100,000 awards to test some "out-of-the-box" ideas that are too daring to get support from federal funding agencies, writes Xconomy.
- Gene Security Network lands $2 million from NIH
Gene Security Network (GSN) announced that they have received a $2 million grant from the National Institutes of Health (NIH) to conduct a clinical trial applying Parental Support technology for non-invasive prenatal diagnosis (NIPD). NIPD will enable highly accurate detection of severe fetal genetic abnormalities by testing fetal DNA found in maternal blood.
- USC and Coulter Foundation invest $5 million
The USC Viterbi School of Engineering, Keck School of Medicine of USC, the USC Stevens Institute for Innovation, and the Los Angeles Basin Clinical Translational Science Institute (CTSI) have been selected to participate in the exclusive Coulter Translational Research Partnership Program. The program awards pioneering institutions that are fostering tomorrow’s translational technologies and innovations in biomedical health care. For its operations, the Program will have $1 million each year for a period of five years, with $667,000 a year from the Coulter Foundation augmented by $333,000 of contributions from the USC Viterbi School of Engineering, the CTSI, and the USC Stevens Institute for Innovation.
- Oxford Nanopore drums up $41 million
Illumina Inc. (NSDQ:ILMN) made another equity investment in Oxford Nanpore. Oxford raised $41 million (25 million pounds) from Lansdowne Partners, IP Group, Invesco Perpetual, Redmile Group, Illumina and other investors, according to a statement from the company. Illumina first invested in Oxford, and its method for DNA sequencing, in January 2009, and made another investment in February 2010, according to Xconomy.
- Hospira readies $1 billion share buyback
Hospira Inc. (NYSE:HSP) announced that its board of directors has authorized the repurchase of up to $1 billion of the company’s common stock. The multi-year program authorizes the company to repurchase common shares from time to time through the open market and through private transactions in compliance with securities regulations and other legal requirements. The size and timing of any purchases are at the discretion of company management, based on factors such as price, business and market conditions. The program does not have an expiration date.
- Solta Medical extends loan deal
Solta Medical Inc. entered into the Fifth Amendment to its Loan and Security Agreement with Silicon Valley Bank dated as of March 9, 2009, as amended from time to time. The Amendment provides for an extension of the draw period of the additional term loan facility such that terms loans under the facility may be borrowed until March 31, 2012 and will be repaid in 33 equal monthly payments of principal and interest, but no later than Dec. 31, 2014.
- CareView Communications secures $20 million
CareView Communications Inc. (OTC:CRVW), an information technology provider to the healthcare industry, announced that it has closed a $20 million financing with funds managed by HealthCor Partners Management LP and HealthCor Management, LP. The financing involved the issuance of senior secured convertible notes in the aggregate principal amount of $20 million together with common stock purchase warrants. HealthCor is a leading investment manager in the healthcare and life sciences sectors.
- Photologic goes into liquidation
Photologic has gone into liquidation after almost 20 years in business. The Photologic Dublin, Ireland-based medical imaging company employed about 40 people and had sales of over €20 million in 2009, according to its latest accounts. Photologic was owned by John Gallagher, the founder of the Charter Medical Group, reports Post.IE.