Natus stock up 5.6% on $26.75 million stock sale; DexCom gets stay in Abbott patent infringement suit

By Sheri Kasprzak

New York, Aug. 18 - Natus Medical Inc. watched it stock climb by almost 5.6% on Friday after the company priced a follow-on sale of stock for $26,749,000.

The stock gained 65 cents on the day to close at $12.28 (Nasdaq: BABY).

The company sold 2.3 million in the offering at $11.63 each. The price per share is par with the company's closing stock price on Thursday.

The stock will be sold under the company's shelf registration.

Roth Capital Partners, LLC is the underwriter and has a greenshoe for up to 345,000 additional shares to be exercised within 30 days of closing.

The deal is slated to wrap up on Wednesday.

Proceeds will be used to repay some or all of the balance on its senior secured credit facility with Wells Fargo Bank. The rest will be used for potential acquisitions as well as for general corporate purposes.

Based in San Carlos, Calif., Natus develops products used to screen medical conditions like hearing impairment, neurological dysfunction, epilepsy, sleep disorders, newborn jaundice and newborn metabolic testing.

DexCom stock climbs 16%

Elsewhere in biotech news Friday, DexCom Inc.'s stock advanced by 16.04% after receiving a stay in a patent-infringement lawsuit brought by Abbott Laboratories Inc.

The stock gained $1.96 to close the week at $14.18, and advanced by another 6 cents in after-hours trading (Nasdaq: DXCM).

The stay, according to a DexCom statement released Friday, was granted pending the re-examination of patents by the U.S. Patent and Trademark Office. The ruling, according to DexCom, would suspend further activity in the suit until late 2007.

In the suit, Abbott claims DexCom violated four of its patents for a continuous glucose monitor. DexCom has filed for a dismissal of the charges.

Chicago-based DexCom develops glucose-monitors for diabetes patients.

Delcath stock edges up

In other biotech lawsuit news, Delcath Systems Inc. said Laddcap Value Partners LP was banned by a federal court from taking action to replace Delcath's board of directors. Also on Friday, Delcath said Methodist Health Care System joined its phase 3 clinical trial for the treatment of metastatic melanoma.

The stock gained 4 cents on Friday, or 0.83%, to close at $4.83 (Nasdaq: DCTH).

Delcath, in the suit, claims that Ladd violated federal securities laws when it made "material misrepresentations and omissions to Delcath's shareholders" in a takeover attempt.

Laddcap has been trying to receive consents to replace Delcath's board with nominees of its own. The U.S. District Court for the District of Columbia prohibited Ladd on Friday from taking action to replace the board.

In other news at Delcath, Methodist Health Care System will allow Delcath to use its San Antonio facility to test Doxorubicin, an anticancer agent.

The drug is used to treat metastatic melanoma in the liver.

"We are pleased to announce the Methodist Health Care System and its affiliated locations as the first U.S. sight for our phase 3 Doxorubicin trial," said M.S. Koly, Delcath's chief executive officer, in a statement. "This marks an important milestone for this trial as recruitment is resumed under the guidance of such a highly esteemed U.S. establishment as Methodist Health Care System.

"Also, we are very happy that the Doxorubicin trial will be taking place in a different geographical location than our phase 3 Melphalan trial, which we believe will increase word-of-mouth and create greater awareness of the Delcath system. This announcement is further evidence of management's unwavering commitment and ability to recruit sites for the Doxorubicin trial in the U.S. and execute upon its stated business plan.

"This is a great boost to our efforts and we will continue to recruit new sites for both the phase 3 Doxorubicin and phase 3 Melphalan trials."

Stamford, Conn.-based Delcath develops treatments for cancer.

IsoRay raises $5.16 million

IsoRay sold 2,063,200 shares at $2.50 each to investors led by MicroCapital, LLC. The price per share is 26% discount to the company's $3.39 closing stock price Thursday.

The investors also received warrants for 2,232,700 shares, exercisable at $3.00 each.

If all of the warrants are exercised, the proceeds raised would be enough to allow the company to be self-funding.

"MicroCapital's financing of IsoRay represents a rare opportunity to invest in a company that has an approved and differentiated therapeutic product that we believe has a good chance of successful adoption," said Ian Ellis of MicroCapital in a news release. "In addition to the value associated with reducing the side effects of brachytherapy in the treatment of prostate cancer, the company's isotope may have the characteristics that would allow it to be used in circumstances where there appears to be few, if any, alternative treatment.

"We also believe that the quality of the industry-experienced team that the company has successfully attracted is an indication of the possibility of success in this market."

"Brachytherapy has proven to be effective, but the introduction of Cesium-131 takes this treatment option to a new level," said IsoRay chief executive officer Roger Girard in a statement.

The stock ended the day up 11 cents, or 3.24%, to close at $3.50 (OTCBB: ISRY).

"They're not a bad company by any means," said one buyside source. "I think they have a decent plan, but I think they way undersold themselves. I fully expect to see them at $5 [per share] by the end of the year."

Located in Richland, Wash., IsoRay develops Cesium-131 brachytherapy used to treat prostate cancer.

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