Bankrupt ReGen gets another cash infusion through investor | Funding roundup

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 Earlier this month, the FDA rescinded its 2008 510(k) clearance of the Menaflex device, a bio-absorbable mesh implant designed to encourage the re-growth of damaged knee cartilage.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:

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• Gates Foundation grants another $100,000 for global health ideas
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• Solta Medical extends loan deal
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• CareView Communications secures $20 million
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