We follow a number of trends here at the blog, and two of them showed up as Canadian deals this week. Add those to the Biovail-Valeant merger, Æterna’s offering and a whole slew of commercial deals, and it’s been a pretty big week in Canadian deal-making.
Trends in the News
Bayer Inc. and Teva Canada Limited announced an agreement for Teva Canada to become the sole distributor in Canada of brand name Adalat XL product. No financial terms were disclosed, but consider this an interesting twist on the shifting constituencies in the pharma/generics world.
A second trend showed up as a Canadian deal this week as well: foundation funding of commercial development. MedGenesis Therapeutix Inc. and Biovail Corporation (NYSE: BVF) (TSX: BVF) are receiving a US$2.1 million grant from the Michael J. Fox Foundation (MJFF) to further their collaboration in the development of glial cell line derived neurotrophic factor (GDNF). The grant will be made over a 3-year period; with the total amount being subject to the attainment of specific milestones. GDNF is being developed by MedGenesis and BLS pursuant to a December 2009 collaboration agreement.
Speaking of Biovail, Valeant (NYSE: VRX) and Biovail (NYSE: BVF) (TSX: BVF) are merging. The newco will keep Valeant’s named, but “will preserve the advantageous Biovail corporate structure.” This means keeping the HQ in Mississauga, and the Barbados operating/IP subsidiary, along with the NYSE/TSX dual listing. Valeant stockholders get a one-time special cash dividend of $16.77 per share immediately prior to closing of the merger and 1.7809 shares of Biovail common stock upon closing of the merger in exchange for each share of Valeant common stock they own. Biovail stockholders will own approximately 50.5 percent of the newco, representing a 15% premium based on a calculation of the stock prices over the 10 trading days prior to the announcement. The plan is for the newco to pay an additional one-time $1.00 per share dividend to all stockholders as its final dividend. Goldman Sachs Bank USA, Morgan Stanley & Co. Incorporated, and Jefferies & Company, Inc. putting up a $2.8 billion term loan to finance the transaction, and the existing Valeant 7.625% and 8.375% senior unsecured notes will be refinanced as part of the transaction. The newco board will have 11 members: five Biovail, five Valeant and one additional independent Canadian resident director to be named later.
Axxess Pharma, Inc. (OTC: AXXE) signed a Letter of Intent (LOI) to acquire a Canadian-based pharmaceutical manufacturer. They haven’t said who it is, but they dropeed a few hints: the acquisition will add over $2 million in annual revenues, their facility is in Markham and is roughly 22,000 square feet and they manufacture pharmaceuticals, neutraceuticals and dermotologicals. Axxess Pharma will continue the distribution of its own line of pharmaceuticals from its Markham location.
BioSyntech, Inc. has completed the previously announced sale of its assets to Piramal Healthcare (Canada) Limited (covered here).
Aeterna Zentaris Inc. (TSX: AEZ, NASDAQ: AEZS) has completed its previously announced registered direct offering of units to institutional investors (covered here), for net proceeds of US$11.3 million. Proceeds will be used to fund the AEZS-108, AEZS-112, and AEZS-130 programs, and for other general corporate and working capital purposes. A shelf registration statement has been filed relating to the shares and warrants issued in the offering. Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc., (NASDAQ: RODM), acted as the exclusive placement agent for the transaction.
Resverlogix Corp. (TSX:RVX) has closed its previously announced prospectus of 3,100,000 units at $3.23 per unit, for gross proceeds of $10,000,000 (covered here). Each unit comprised of one common share and a 0.4 (4-year $4.00) warrant.
Licensing and Commercial Deals
Kinetic Concepts, Inc. has a customer in Health Canada, which will license its Prevena™ Incision Management System, intended to help reduce the likelihood of post-operative complications.
Medicago USA Inc., a subsidiary of Medicago Inc. (TSX: MDG), announced that the Defense Advanced Research Projects Agency (DARPA) has determined Medicago to be selectable for funding. Medicago and DARPA are negotiating the final terms and conditions required to receive the award. Medicago responded to a DARPA solicitation for the development of a large, cost-effective and rapid scale-up of Medicago’s innovative technology to deliver cGMP-grade vaccine material.
Bioniche Life Sciences Inc. (TSX: BNC) has signed an exclusive global veterinary license agreement with Trophogen Inc. Bioniche will gain access to Trophogen’s proprietary, patented superagonist hormone technology platform, to be developed into a next generation follicle stimulating hormone. Bioniche also has the option to license additional veterinary reproductive products from Trophogen.
Amorfix Life Sciences (TSX: AMF) picked up another ProMIS™ collaboration, this one with QED Bioscience have agreed to develop high-affinity monoclonal antibodies against a number of cancer targets. QED will generate antibodies against several disease specific epitopes identified by Amorfix using their proprietary computational platform discovery technology.
Covalon Technologies Ltd. (TSXV: COV) has signed a multi-year agreement with a large manufacturer & distributor of health care supplies and services in the United States. The agreement allows the distributor to use Covalon’s proprietary coating technology, which protects against hospital-acquired infection, on one of its products in return for $500,000 USD and future royalty payments.
MDS Nordion, Guerbet, and Cyceron have agreed to develop new Positron Emission Tomography Gallium-68-based radiotracers for cancer diagnostics. Gallium-68 has the advantage of greatly reducing the infrastructure required to prepare an agent for clinics. Support and funding will be provided through OSEO Innovation under the authority of France’s Ministries of Finance, Industry, Small Businesses and Research, Eureka, and the Regional Council of Lower Normandy, OSEO Lower Normandy, and the European Regional Development Fund.
Aptilon Corporation (TSXV: APZ) has obtained a $3,000,000 loan from le Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l’emploi (FONDACTION). The 60-month loan bears annual interest of 12% and Aptilon will pay 0.5% of its EBITDA on a monthly basis, which will be used by FONDACTION to purchase Aptilon common shares on the secondary market. The principle amount of the loan is reimbursable in 48 monthly installments beginning 13 months following disbursement. Interest is payable monthly immediately following disbursement.
Ceapro Inc. (TSXV: CZ0) has entered into a R&D collaboration agreement with the National Research Council of Canada. Several bioassays will be conducted on current and prototype Ceapro products, to support marketing and sales. Innovation PEI is providing a repayable $100,000 contribution and Atlantic Canada Opportunities Agency is providing a $50,000, non-repayable contribution. Ceapro has also announced development work to examine the use of supercritical extraction technology to produce existing and new products. Ceapro has received approval for a non-repayable contribution of up to $99,900 for this project. Ceapro has also expanded growing trials for its exclusively-licensed spearmint variety, the active ingredient of which is used in the personal care and cosmetics markets. Ceapro has also begun formulating and testing 2nd generation products with new all-natural preservatives and increased potency for sale in the health foods market.
Chemaphor Inc. (TSXV: CFR) has launched a stem cell regenerative therapy for pets and horses in Canada. Chemaphor will offer this treatment through veterinarians and expects to generate revenue this year. Chemaphor acquired the exclusive marketing rights by acquiring 7552882 Canada Inc., which had licensed the therapy from Vet-Stem, Inc.
Global Health Ventures Inc. (OTC: GHLV) signed a binding letter of intent with Pacific Therapeutics Ltd. Global will pay Pacific an upfront fee, milestone payments for key clinical and regulatory achievements, and royalties on potential future sales. Future clinical development and commercialization of PTL-202 (a combination of two FDA-approved drugs) will be the joint responsibility of the two companies. The drug was shown to be effective at reducing indicators of idiopathic pulmonary fibrosis.
Thallion Pharmaceuticals Inc. (TSX: TLN) bought out its lease with Liberty Sites Ltd., cancelling the remaining six years for total consideration of $2.4 million (and saving about $5.6). Thallion gets to stay until August 31, 2010, with an option to remain until November 30 if required.
Solarvest Bioenergy Inc. (TSXV: SVS) has announced that its subsidiary, Solarvest (P.E.I.) Inc., has received $100,000 in funding from the provincial government, with the aim of engineering Solarvest’s proprietary algae to produce commercial high-value proteins for the animal health industry while also producing hydrogen. Solarvest’s project is one of ten selected for funding by Innovation PEI, from out of 55 applications.
Thanks again to Keldeagh Lindsay for his help with this week’s Deal Review.