The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monday Biotech Deal Review: March 22, 2010

Bought deals are all the rage this week, with BioExx and Osta Biotechnologies both heading in that direction.  Also, everywhere we look, warrants are being exercised and debentures are being converted. We even noted the green shoots of a new Canadian listed biotech company poking through the ground via a CPC transaction.  Is there a Spring thaw in Canada’s biotech capital markets? 

Bought Deals

  • BioExx Specialty Proteins Ltd. (TSX:BXI) launched a $15 million bought deal led by Canaccord Financial Ltd..  BioExx will sell 8,150,000 common shares at a price of $1.85 per common share, with a 1,222,500 common share overallotment on the same terms and conditions, exercisable at any time up to 48 hours prior to closing, that could bring gross proceeds up to $2.3 million. Net proceeds will be used to continue funding for BioExx’s second plant in Minot, North Dakota, and to further develop its patent-pending “toasted meal” protein technology and working capital expenses associated with its Saskatoon facility. The offering is expected to close on or about March 30, 2010.
  • Osta Biotechnologies Inc. (TSXV: OBI) entered into an agreement with Sherbrooke Street Capital Inc. for a $504,000 bought deal private placement of 8,400,000 units at a price of $0.06 per unit, each unit consisting of one common share and one-half of a ($0.10 two-year) common share purchase warrant. Sherbrooke will receive a fee of 7% of the gross proceeds in addition to broker warrants allowing Sherbrooke to purchase common shares equal to 7% of the number of units sold, exercisable for two years from closing.

Other Securities

Will Trade Debt for Shares

  • Nuvo Research Inc. (TSX: NRI) saw 100% of eligible convertible debentures were converted into common shares following the company’s notice of redemption to holders of its 5% convertible debentures. Nuvo announced February 4, 2010 that it would redeem the outstanding $3,486,000 principal amount of debentures for $3.61 million in cash. As of March 12, 2010, all debentures holders elected to convert their outstanding principal amount into 24.3 million shares of common stock at $0.138 per share. According to Jim Moulds, Executive Vice President and CFO, this early conversion removes substantially all debt from Nuvo’s balance sheet.
  • MedX Health Corp. (TSXV: MDX) announced it has settled $87,650 in obligations to parties by issuing 1.4 million shares. The number of fully diluted MedX Health Corp. shares outstanding is 28.4 million.

Licensing and Commercial Agreements

  • Trillium Therapeutics Inc. (TTI) entered into two license agreements: with University Health Network (UHN) and with The Hospital for Sick Children (SickKids) in Toronto, Ontario, granting Trillium exclusive worldwide rights to commercialize two immunology programs in the areas of hematopoietic stem cell transplantation and cancer. Financial terms were not disclosed.
  • Medicago Inc. (TSXV: MDG) signed an MOU with Niigata TLO/NBRP/KUTLO-NITT (“NITT Partners”), the government approved technology transfer/licensing organization which licenses out bio and life science technologies developed by member universities in Japan, to discuss and negotiate an agreement to commercialize Medicago’s pandemic and seasonal influenza vaccines in Japan and other territories. The MOU provides that the parties will evaluate and select an optimal deal structure with an objective to formalize a definitive agreement.  Medicago also announced that 99% its outstanding 2008 warrants were exercised at $0.25 each prior to expiry on March 14, 2010, yeilding $1,608,812.
  • Tekmira Pharmaceuticals Corporation (TSX: TKM), a developer of RNA interference (RNAi) therapeutics, kicked off a new research collaboration with Pfizer (NYSE: PFE), to evaluate Tekmira’s stable nucleic acid-lipid particle technology as a vehicle for small interfering RNA molecules provided by Pfizer. Financial terms were not disclosed. Although Tekmira currently has license or collaborative agreements with seven other pharmaceutical and biotechnology companies, this is Tekmira’s first formal research collaboration with Pfizer.

OICR announces $1 million in funding for cancer therapies

The Ontario Institute for Cancer Research (OICR) is investing $1 million in two cancer therapy projects. The recipients are: Sunnybrook Health Sciences Centre for a low-cost focused ultrasound system which can find and destroy tumours without surgery, and OncoTek Drug Delivery Inc., a wholly owned subsidiary of Receptor Therapeutics Inc., for the preclinical development of PoLi-PTX, an intraperitoneal ovarian cancer therapy which delivers localized cancer killing agents to the abdominal cavity with fewer side effects than systemic chemotherapy.

M&Eh

  • Paladin Labs Inc. (TSX: PLB), following its deal in Europe with SpePharm Holding B.V., this week completed a “strategic investment” in Pharmaplan (Pty) Ltd., South Africa’s leading independent specialty pharmaceutical company. Paladin has acquired an initial 34.99% ownership interest and has committed to increase its ownership position over time based on a formula linked to Pharmaplan’s financial performance, payable in cash. Paladin President and CEO Jonathan Ross Goodman, and VP of Business and Corporate Development Mark Nawacki both join Pharmaplan’s Board of Directors, effective immediately. Additional financial terms were not disclosed.
  • Atrium Innovations Inc. (TSX: ATB) purchased the assets of Trophic Canada, a leading manufacturer and distributor of vitamins, minerals and herbal supplements in the Canadian Health Food Store market for US$11 million, on annualized revenues of approximately US$7.5 million.
  • Biotonix (2010) Inc. will begin trading at market opening March 24, 2010 under the symbol “BTX”, following the closing of a Qualifying Transaction between Biotonix Inc. and Sylvain Guimond, and the concurrent placement by Capital Valmoris Inc. (TSXV: VMO.P) of 8,750,000 common shares at $0.40 per each. Valmoris, which changed its name to Biotonix (2010) Inc. upon closing, also issued 6,250,000 units, each unit consisting of one common share and one-half of a ($1.00 two-year) warrant, for proceeds of about $2,500,000. Industrial Alliance valeurs mobilieres Inc. acted as agent and received $225,000 in cash plus 437,500 ($0.40 two-year) warrants. Biotonix announced a total of 460,000 options issued to certain directors and executive members on closing, with an exercise price of $0.40 per share, maturing March 18, 2020.   Recipients included Mr. Mario Lemieux, who will also serve as the company’s spokesperson, paid in warrants.
  • MDS Inc. (TSX: MDS) (NYSE: MDZ) closed the sale of its Pharma Services Early Stage business to Ricerca Biosciences LLC for a 15% minority equity interest and $45 million consisting of a $25 million 4% five year note and $20 million in cash, subject to adjustment, as noted when the deal was signed.  MDS is “now focused on MDS Nordion.”
  • ConjuChem Biotechnologies Inc. (TSX: CJB)’s independent committee is looking to Bloom Burton to “further solicit and evaluate strategic options for the company,” following the company’s CCAA filing earlier this month.

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

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2 responses to “Monday Biotech Deal Review: March 22, 2010

  1. Pingback: Monday Biotech Deal Review: April 5, 2010 « The Cross-Border Biotech Blog

  2. Pingback: Monday Biotech Deal Review: April 12, 2010 « The Cross-Border Biotech Blog

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