This week’s Canadian biotech deals include an acquisition by Biovail, Hæmacure’s BIA filing comes to a predictable end, MethylGene finds $8.9 million in its couch cushions from some Ontario numbered corps, Leap Medical leaps ahead with $1 million from MSBiV and other Quebec favourites, and BioSyntech borrows against its SR&EDs. Those, plus more securities, debt and commercial deals
Biovail’s Latest CNS Acquisition
Biovail Corporation (NYSE: BVF) (TSX: BVF), through its subsidiary, Biovail Laboratories International SRL, acquired rights to AMPAKINE® compounds from Cortex Pharmaceuticals, Inc. (AMEX: CORX) and the University of California. The upfront fee was $9 million, with an additional $1 million to come upon completion of a “transition period,” and up to $15 million in potential milestone payments. The products are approved for use in respiratory depression, a brain-mediated breathing disorder; marking the eighth transaction in Biovail’s specialty CNS strategy.
Haemacure obtains approval to make asset sale to Angiotech
Haemacure Corporation (TSX: HAE) got court approval to sell its assets to its secured creditor Angiotech Pharmaceuticals, Inc., (NASDAQ: AMPI), in the context of a proposal to creditors filed by Haemacure on January 8, 2010 under the BIA. The U.S. Bankruptcy Court has also approved the sale of the assets of Haemacure’s U.S. subsidiary to Angiotech.
MethylGene to reorganize for $8.9 million, announces financial results for 2009
MethylGene Inc. (TSX: MYG), following annual results dominated by the effects of the termination of its agreement with Celgene corporation (NASDAQ: CELG), entered into an agreement to raise “up to $8.9 million in non-dilutive capital” with 1819400 Ontario Inc. and 1815303 Ontario Limited, with $7 million to be received at closing. The reorganization will see MethylGene transfers its assets and liabilities, including the proceeds of the transaction, into a Newco. MethylGene shareholders will exchange MethylGene shares for an equal number of common shares of Newco, which will continue the business of MethylGene as a public company listed on the TSX. The two Ontario companies will then own 100% of the common shares of the original MethylGene entity. Further details of the transaction, which sounds like the SIFT/SR&ED deals of last year (but can’t be) will have to wait for the information circular, which will be mailed in April.
Leap Medical secures $1.025M in seed financing, McGill License Option
Leap Medical Inc., a private medical device company working on rapid detection of brain injuries and infection, pulled in just over $1 million in a round co-led by MSBi Valorisation and investors BDC Venture Capital and GO Capital Fund, and was supported by a grant from the Québec Ministry of Economic Development, Innovation and Export Trade and a loan from the CQVB. Leap Medical also negotiated an option agreement with McGill University for exclusive worldwide license rights to develop and commercialize products based on its photonics research.
BioSyntech’s SR&ED Financing
Biosyntech, Inc. (TSX: BSY) entered into a $1M loan agreement with Investissement Québec to finance Biosyntech’s refundable tax credits for 2009. The loan bears interest at an annual rate of prime plus 4%, is repayable upon receipt by Biosyntech of the 2009 tax credits, and is secured by a first ranking hypothec [lien] against the tax credits. Upon reimbursement, Biosyntech plans to do the same for 2010 tax credits. Concurrently with the loan, interest payments on currently outstanding subordinated secured convertible debentures due March 31, 2010 have been extended to June 30, 2010.
Miraculins Inc. (TSXV: MOM) is amending the terms of its private placement, first announced February 9, 2010 (covered here). The offering is now for up to 10,000,000 units (up from 7,150,000), at a price of $0.05 per unit (down from $0.07 per unit), each unit consisting of one common share and one ($0.10 one-year) warrant. The warrants are callable by Miraculins if shares trade at or above $0.14 per share for any 20 out of 30 consecutive trading days.
CardioComm Solutions, Inc. (TSXV: EKG) announced a non-brokered private placement to its CEO and chair Dr. Anatoly Langer, issuing 10,000,000 units at a price of $0.05 per unit for gross proceeds of $500,000. Each unit will consist of one common share and one ($0.10 two-year) warrant exercisable. The Company is also settling about $81,250 in debt arising from management fees in the fourth quarter of 2009. On completion of the private placement and debt settlement, MD Primer Inc. will hold approximately 34.8% of the shares of the company and Dr. Langer will hold approximately 50.7%.
Bradmer Pharmaceuticals Inc. (TSX:BMR) sold 8,369,947 common shares at a price of $0.095 per share, for aggregate proceeds of $795,000, short of the planned $1 million. Wildlaw Capital Markets Inc. took a cash commission of 5% of gross proceeds, plus 5% warrants ($0.095 two-year). Common shares of Bradmer were delisted from the TSX as of the close of business on March 26, 2010 and listed on the NEX Board of TSX Venture as of March 29, 2010. Directors Mark Rogers and Donald Kufe have resigned.
Commercial Deals and Milestones
Noveko International Inc. (TSE: EKO) announced a new 2-year distribution agreement between its subsidiary Noveko Inc. and AMD-Ritmed Inc., covering the sale and promotion of Microban® hand sanitizers in Canada.
Novadaq Technologies Inc. (TSX: NDQ), received a $1,000,000 milestone payment from Intuitive Surgical, Inc. (NASDAQ: ISRG) under the terms of the License and Development Agreement signed by the parties in January 2009.
Medicure Inc. (TSX: MPH) further deferred its payments under its 2007 debt financing agreement. The USD$2.1M payment is extended to March 31, 2010. The company is continuing its strategic review process.
Thanks again to Jacob Cawker for help with this week’s Deal Review!