San Diego Business Journal

Green Hospital Supply Inc., which markets automated stem cell separation equipment made by Cytori Therapeutics Inc. to Japanese hospitals, will increase its stake in the regenerative medicine business, Cytori said Feb. 8.

Green Hospital Supply will purchase 2 million shares of unregistered Cytori common stock at $6 a share, adding to the 1 million shares it previously purchased, and gain a non-voting seat on Cytori's board. Following the transaction, subject to regulatory closing conditions, Green Hospital Supply will own 3 million shares, or a stake of 11.5 percent in Cytori.

The transaction is valued at $12 million.

"This infusion of cash will allow us to further invest in the development of therapeutic applications of adipose-derived cells," said Mark Saad, chief financial officer of Cytori.

Cytori's approach to regenerative medicine involves adipose, or fat, tissue removed through liposuction. The tissue is said to be an abundant source of stem cells and other regenerative cells that can contribute to the healing and repair of damaged tissue.

In late January, the company announced it enrolled the first two patients overseas in a test to see whether their own stem and regenerative cells could help them recover from a heart attack.

The company also plans to launch clinical trials in spinal disc degeneration, gastrointestinal disorders and other unmet needs.

Shares of Cytori, traded under the symbol CYTX on the Nasdaq, jumped 34 cents, or 6.6 percent Feb. 8, to close at $5.44 following the news.

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BioVascular Closes Series C Funding: BioVascular Inc., a privately held drug company focused on developing cardiovascular treatments, said Feb. 7 that it closed a $10.87 million round of late-stage financing.

The Series C round was led by BB Biotech Ventures of Zurich, Switzerland, and included previous investors Merck KGaA and Domain Associates. In connection with the financing, BB Biotech Partner Martin M & #252;nchbach will join the company's board.

Chief Executive John Parrish said the funds will allow BioVascular to complete ongoing clinical trials of its two cardiovascular drug candidates, saratin and BVI-007. The company has raised $18.87 million to date.

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La Jolla Pharmaceutical Reports Riquent Progress: La Jolla Pharmaceutical Co. announced significant progress Feb. 11 in an ongoing late-stage trial of lupus drug candidate Riquent.

"We have increased the dose ninefold and are very encouraged that the data continue to indicate that the 300 mg and 900 mg doses of Riquent are as well tolerated as the 100 mg dose was in our previous studies," said Deirdre Gillespie, president and chief executive officer of La Jolla Pharmaceutical, in a prepared statement.

The Phase 3 study is testing the ability of Riquent to delay the time to renal flare in lupus patients with a history of renal disease and with elevated levels of certain antibodies.

A lupus renal flare is a potentially life-threatening increase in inflammation of the kidney due to lupus.

A renal flare often requires treatment with immunosuppressive drugs, which can have severe side effects.

Studies have shown the average annual cost of providing medical care for a case of lupus ranges between $6,000 and $10,000.

Riquent has received an approvable letter and fast-track status from the FDA, along with orphan drug designation.

The current trial is being conducted under a special protocol assessment.

The drug failed to prove effective in delaying kidney inflammation from lupus in 2003.

The company asked the FDA to consider approving Riquent for its ability to reduce certain antibodies, which it is currently testing.

Shares of La Jolla Pharmaceutical, traded under the symbol LJPC on the Nasdaq, fell 15 cents, or 4.7 percent, to close at $3.06 Feb. 11.

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Freedom Meditech Opens R & D; Center: Freedom Meditech Inc., the San Diego-based maker of a non-invasive ocular glucose measurement technology for people with diabetes, will open research and development operations in Ohio, the company said Feb. 12.

The new R & D; operation will leverage a product development services agreement with Cleveland-based Magnet Inc., a resource center for entrepreneurs and technology-driven manufacturers seeking resources to become or remain globally competitive.

"We are greatly impressed with the facilities and track record of success in medical product development in Ohio," said Craig Misrach, president and chief executive of Freedom Meditech, in a prepared statement. "The health care resources of the Cleveland Clinic, statewide bioengineering proficiency, and our ongoing research relationship with the University of Toledo, make northern Ohio the perfect home for our near-term R & D; activities."

The agreement with Magnet provides Freedom Meditech with access to high-end optical engineering equipment for its upcoming in-vivo efficacy studies.

Magnet will also provide comprehensive business growth and product engineering services. Financial terms were not disclosed.

Freedom Meditech's engineering and corporate operations will remain in California.

The company is developing a device that tests blood sugar levels with a binocular-like device that shines a light into the eye for less than a second to produce a digital glucose reading.

Send biotechnology-related news to Heather Chambers, hchambers@sdbj.com , or call (858) 277-6359, ext. 3125.