Medical supplies firm QT Vascular has called off a $12 million convertible bond agreement it made with an investment fund and three private investors.
The agreement, made on July 1, was meant to provide expansion funds for QT Vascular and help the company reach its next milestone - obtaining a CE mark for one of its products this year. The CE mark shows that a product complies with European law and can be sold there.
The decision to cancel the deal was made on Tuesday when interested investors approached the company with funding offers after court rulings on July 2 seemed to bolster QT Vascular's stance in a legal dispute with a firm called AngioScore.
The court case involves an alleged patent infringement involving a vascular therapy product called Chocolate PTA that was originally created and designed by QT Vascular chief executive Eitan Konstantino.
AngioScore, which specialises in balloon angioplasty - a procedure to restore blood flow through the artery - had applied for an injunction to prevent QT Vascular from selling Chocolate PTA.
QT Vascular said in a recent statement that the court had denied AngioScore's application. A final ruling is expected in September.
QT Vascular, which develops minimally invasive treatment products for vascular diseases, said on Tuesday that it will try to raise funds by entering into a strategic partnership with interested investors, which include multinationals.
"We will be replacing this deal with other funding mechanisms due to strategic interest from multinationals," said Dr Konstantino.
He said privacy issues prevented him from disclosing the names of the companies it intends to work with.
The company added that a new design of the Chocolate PTA product helps reduce the risks related to the patent claim.
One of the new advancements is the incorporation of drug-coating, "the hottest trend in vascular therapy in the United States", said Dr Konstantino. The drug keeps the arteries open and minimises complications during treatment.
Dr Konstantino said Chocolate PTA has been well received by physicians and is being used by Singapore General and Changi hospitals.
Despite the row with AngioScore, QT Vascular is optimistic about its outlook. The company was listed on the Singapore Exchange in April last year.
QT Vascular shares fell 6.6 cents or 36.26 per cent on Tuesday. But they have recovered and ended up 5.17 per cent to close at 12.2 cents yesterday.
"The company is not spared by the stock sentiments in North Asia," said a market practitoner who did not wish to be named.
He added that "shareholders most likely took the annoucement as a bad sign and sold their shares".