World Heart shares dip after $30 million stock placement; PolyMedix wraps $15 million sale of units

By Devika Patel

Knoxville, Tenn., Aug. 1 - Shares of World Heart Corp. dipped nearly 11% on Friday after the company announced late Thursday the completion of a $30 million stock sale, the first step in its recapitalization efforts.

Shares of World Heart (Nasdaq: WHRT) decreased 10.95%, or $0.015, to close at $0.122 on Friday.

In other PIPE market activity, PolyMedix, Inc. settled a $15 million private placement of units after the close on Thursday through agents Growth Equities, Fordham Financial and Carter Securities.

World Heart: $30 million

World Heart, an Oakland, Calif.-based developer of mechanical circulatory support systems, announced it has completed a $30 million private placement aimed at helping it move forward in its operations and plans for recapitalization.

David Pellone, the company's vice president of finance and chief financial officer, told Prospect News that the deal was conducted to help advance the company's recapitalization efforts.

"We plan to conduct a reverse share split, and also have an agreement with Abiomed, Inc., which holds a $5 million promissory note. Abiomed agreed to convert the note into shares upon completion of the private placement," Pellone said Friday.

The 8% secured convertible note, which was sold to Abiomed, is convertible into 86 million shares, the company said in Friday's press release. The note's conversion releases Abiomed's security interest in the company's assets and forgave other amounts owed under the note's default, which was reported by the company in a May 9 press release.

The note was issued to Abiomed on Dec. 11, 2007.

The company recently has been struggling to raise money through an equity financing to cure its default under the note.

In Friday's placement, World Heart sold 300 million common shares at $0.10 per share.

Venrock Partners V, LP, Venrock Associates V, LP and Venrock Entrepreneurs Fund V, LP bought $11 million of the shares, Special Situations Fund II QP, LP, Special Situations Cayman Fund, LP, Special Situations Private Equity Fund, LP, Special Situations Life Sciences Fund, LP and Austin W. Marxe bought $9 million of the shares and New Leaf Ventures II, LP invested $10 million.

Venrock also assisted in the company's efforts to raise funds by providing World Heart with a $1.4 million bridge loan facility, which was completed concurrently with the placement, the company said in Friday's press release.

PolyMedix wraps $15 million

PolyMedix said after the close on Thursday that it has taken in $15 million from a private placement of units.

The Radnor, Pa.-based company sold units of one share and one warrant at $0.70 apiece. The warrants will be exercisable at $1.00 for five years.

Emerging Growth Equities, Fordham Financial and Carter Securities were the agents of the deal, which was completed in order to raise funds to advance the company's first two drug candidates, PMX-30063 antibiotic and PMX-60056 heparin antagonist, into human clinical trials in 2008 and phase 1B clinical testing.

"I would like to thank Emerging Growth Equities, Fordham, and Carter for their first-rate performance in this financing, particularly given the very difficult conditions in the capital markets," PolyMedix president and chief executive officer Nicholas Landekic said in a press release. "We are very pleased with the terms and response from investors that resulted in an over-subscribed offering.

"The investors that participated are leading institutional funds and accredited investors," Landekic continued. "The fact that we have been able to close this transaction on what we consider to be favorable terms we believe speaks to the potential of our drug pipeline and the importance of the illnesses and diseases we are combating.

"This financing gives PolyMedix the capital to advance our two lead drug development programs into human clinical development and the important phase 1B proof of concept studies. This is an important milestone in our growth and we are enthusiastically pressing forward with drug development programs that we believe offer innovative, life-saving therapies for serious infectious and cardiovascular diseases," Landekic concluded in the release.

The company develops small-molecule compounds used to treat infectious diseases. Its shares (OTCBB: PYMX) dropped 5% on Friday, or 4 cents, to close at $0.76. Its shares closed at $0.80 on Thursday.

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