The Cross-Border Biotech Blog

Read on for all the details of QLT’s sale of its U.S. subsidiary, as well as more M&A and a series of securities deals from Canadian companies this week

M&A

• QLT Inc. (NASDAQ: QLTI) (TSX: QLT) sold its subsidiary, QLT USA, to TOLMAR Holdings. QLT USA’s principal operating asset is the Eligard® line of products for the palliative treatment of prostate cancer, which TOLMAR Inc. manufactures.  TOLMAR pays US$20 million on closing, $10 million next year, and up to an additional $200 million payable quarterly as 80% of Eligard® royalties, which the product earns from its global sales.  Consideration for the shares is an amout equal to QLT USA’s cash on hand.
• Quest PharmaTech Inc. (TSXV: QPT) is buying a pipeline of late-stage immunotherapy product candidates from Paladin Labs Inc. (TSX: PLB).  Paladin gets $37,000 upfront and 1.5 million common shares of Quest, with an additional 1.5 million common shares to be issued on or before December 31, 2010 as well as 2 million additional common shares if Quest is successful in certain financing initiatives, and undisclosed royalty payments on future revenues.

Securities

• Urodynamix Technologies Ltd. (TSXV: URO), a Canadian medical device company specializing in non-invasive diagnostic technology, closed its previously reported non-brokered private placement.  Management subscribed for $238,675 and BC Advantage Funds (VCC) Ltd. subscribed for $750,000 (with no commission costs).  The remainder was taken by other investors, but the overallotment wasn’t sold. The company also announced a cross of 1,480,000 common shares at a sales price of $0.05 per share. The shares were sold by Company President and CEO Barry Allen, who also purchased 2,782,450 common shares in the private placement.
• Theralase Technologies Inc. (TSXV: TLT) announced a $1.2 million unit offering. Each unit is one common share plus one half of a (non-transferable $0.45 2-year) warrant, aiming for a closing on October 15.
• LAB Research Inc. (TSX: LRI), a Canadian-based global non-clinical contract research organization, announced the closing of its previously announced rights offering for gross proceeds of $14.2 million. 34.6 million shares were issued, including 18.3 million to the Solidarity Fund QFL. The Fund’s ownership position in LAB increased from 18% to 41% following the transaction, and will be able to nominate two directors to the board of LAB as long as it holds its stake. Proceeds of the rights offering will be used to repay debt, including a $500,000 bridge loan from QFL, equipment, and working capital. LAB will also issue 2.5 million options to staff, management and directors representing 7.1% of the common shares issued in the rights offering.

Getting By With a Little Help from Their Friends

ProMetic Life Sciences Inc. (TSX: PLI) is getting a $4.5 million advance from its customer OctaPharma AG.  The advance bears interest at 5% and offsets a schedule of payments under a long-term prion capture resin supply agreement signed in December 2008. Interestingly, the first $0.9 million was received in May and $2.7 million in September. The final $0.9 million will be paid on completion of milestones, expected to be met in the first half of 2010.

Thanks again to Jacob Cawker for his help with this week’s Biotech Deal Review!