Sphere Medical, the Cambridge UK medical technology business, is piling up the millions to ensure it cashes in globally on the potential of its next generation product, Proxima 4.
A combination of new fundraisings, backing from Big Pharma and negotiation of a fresh equity financing facility hands Sphere Medical a near £18 million haul to exploit a highly rated device.
A collaboration with a major Johnson & Johnson subsidiary also adds muscle to Sphere Medical’s expansion strategy.
At the heart of the latest moves is Proxima 4 – a disposable patient-dedicated arterial blood gas analyser for use in the hospital intensive care units, theatres and other acute care settings.
Johnson & Johnson subsidiary Ortho Clinical Diagnostics, Inc. (OCD), is collaborating on the development of Proxima 4 and the enhancement of Sphere’s operational and production capabilities. The alliance also provides a framework for the partners to negotiate a proposed global commercialisation deal for Proxima 4.
In connection with the collaboration, Sphere Medical has conditionally raised around £5.1m before expenses through a placing with new and existing institutional investors and approximately £3.3 million through a subscription by Johnson & Johnson Development Corporation.
Sphere Medical is also seeking to raise up to a further £4.2m by way of an additional open offer to qualifying shareholders. The company has also entered into a £5m equity financing facility with Darwin Strategic Limited, a company majority owned by funds managed by the Henderson Volantis Capital Team (a subsidiary of Henderson Global Investors).
Around £7.9m net proceeds of the fundraisings will be pumped into development of Proxima 4 and the enhancement of Sphere’s operational and production capabilities.
The company has high hopes for commercialisation of its current Proxima 3 version but OCD’s involvement really raises the bar with a rapid acceleration towards a version 4.
Sphere Medical CEO Stuart Hendry said: “The board’s principal strategic objective is to transition the group to becoming revenue generating and ultimately a cash generative company through the exploitation of its products and intellectual property.
“We are now in advanced preparations for Proxima 3 CE Marking and expect to launch Proxima 3 into the UK market in H1 2014. Our collaboration with OCD and the accompanying equity investment by JJDC and new and existing investors, points to a strong future for Proxima and consequently for Sphere.”
The company is also making encouraging progress on several fronts with other diagnostic devices for critical care markets globally.
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