Monday Biotech Deal Review: November 23, 2009

A slightly delayed Deal Review this week because of some non-biotech deal activity.  Live, from New York, it’s the Deal Review!

M&A

• Ondine Biopharma Corporation (TSX: OBP) (AIM: OBP) is acquiring Advanced Photodynamic Technologies in exchange for 8,856,458 common shares of Ondine. The APT shareholders may also be entitled to receive an additional 11,187,105 common shares of Ondine, contingent on the attainment of certain milestones, as well as 5% of net proceeds received on account of the commercialization of certain APT intellectual property. APT develops photodynamic drugs and devices with antimicrobial and oncotherapeutic applications.
• SemBioSys Genetics Inc. (TSX: SBS) got an interim order authorizing the special meeting of securityholders for a vote on its plan of arrangement involving a reorganization with Cathedral Energy Services Income Trust. November 16, 2009 is the record date, and the meeting will be held December 18, 2009.  Meanwhile, Advitech’s acquisition of ex-SemBioSys subsidiary Botaneco closed into escrow.
• NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST) (TSX: NCS) shareholders will also get to vote in December on the proposed deal to sell their assets to  Smith & Nephew plc. (LSE: SN) (NYSE: SNN).

Commercial Agreements

• Microbix Biosystems Inc. (MBX: TSX), fresh off its KINLYTIC approval in Canada, announced a marketing and supply agreement with Riso Pharma for guaranteed purchases of not less than 50,000 KINLYTIC (Urokinase) vials over the next three years along with exclusive marketing rights in the Middle East.  This is the first of a series of global deals, according to Microbix Chief Business Officer Mark A. Cochrane.  Riso Pharma will be responsible for commercialization.
• GeneNews Limited (TSX: GEN) signed a marketing partnership agreement with Enzo Clinical Labs (NYSE: ENZ) for exclusive rights to market ColonSentry, the world’s first blood test for colorectal cancer, in New York and New Jersey. Enzo is projecting launch of ColonSentry in the second half of 2010.

Securities

• AIM Health Group (TSXV: AHG) closed its offering of 10% convertible secured subordinated debentures, selling an aggregate amount of $3,500,000 to accredited investors. The debentures are convertible into common shares anytime prior to maturity, at a conversion price of $0.30 per share. AIM may redeem the debentures any time after one year without penalty and may force conversion if the VWAP is at or above $0.40 for 20 calendar days. Net proceeds will be used to pay down debt and for capital expansion purposes.
• Oncolytics Biotech Inc. (TSX: ONC) (NASDAQ: ONCY) fresh off favourable Phase I/II trial results for REOLYSIN, and a successful exercise of accelerated warrants, headed right into an overnight marketed offering of units. Oncolytics sold 4,250,000 units at US$3.00 per unit, each unit comprised of one common share and 0.4 of a (5-year, US$3.50) common share purchase warrant, subject to acceleration conditions.  Oppenheimer & Co. Inc. is the sole book-running manager, with Bloom Burton & Co. and Canaccord Adams Inc. co-managing. The underwriters will be granted an over-allotment equal to 15% of the number of common shares and warrants sold, at the same price as in the offering, exercisable for up to 30 days from closing.  As of November 18, 2009 shares of Oncolytics were down 20% on Nasdaq. The company has about 57 million shares outstanding prior to the offering.
• Resverlogix Corp. (TSX: RVX), developer of small molecules that enhance ApoA-I, launched a plan to repurchase up to US$6.728 million of outstanding convertible notes, commencing December 3, 2009. Repurchase is based on a redemption price of $3.26 representing a 25% premium to noteholders’ conversion price of $2.61.
• iCo Therapeutics Inc. (TSXV: ICO) closed its $4,000,000 offering , selling all of the additional $1.2 million or so since the initial close last week, co-led by Loewen, Ondaatje, McCutcheon Limited and Versant Partners Inc.
• OPMEDIC GROUP Inc. (TSX: OMG) closed the $2.1 million offering it launched a few weeks ago, generating net proceeds of approximately $1.875 million.
• Medicago Inc. (TSXV: MDG) filed their final prospectus for their $10 million bought deal. A total of 14,000,000 subscription receipts will be issued at $0.72 each. Each Subscription Receipt will represent the right to receive one unit, which in turn consists of one common share and one half of a (12-month $1.00 warrant).  Underwriters Paradigm Capital, Bloom Burton & Co. and Dundee Securities have an over-allotment option, plus get a compensation option to purchase a number of units representing up to 7% of the total number of units sold in the offering.