Not a bad week for deals, considering the holiday weekend in both Canada and the U.S.. Response Biomedical placed a PIPE with OrbiMed funds, CTI did a follow-on round in Zymeworks and LAB Research took an equity line. Plus a companion diagnostic deal from Aeterna, just as I’m planning for Diagnostics Asia in August. The week’s rounded out with $450k from the NRC and a spin-out from Ondine.
Response Biomedical Corporation (TSX: RBM) has announced a subscription agreement to sell 13,333,333 common shares at $0.60 each to funds affiliated with OrbiMed Advisors, LLC, subject to shareholder approval. Response will nominate two OrbiMed reps to sit on its board, provided that OrbiMed and affiliates continue to hold at least 5,800,000 common shares. Net proceeds of the placement will be used for general operating expenses. A finder will receive a 3% fee from the proceeds of the placement.
Zymeworks Inc. has closed a $3.2 million follow-on round from CTI Life Sciences Fund L.P. Zymeworks will use the proceeds to advance its antibody engineering platform and develop its protein therapeutics pipeline. In conjunction with the financing, Dr. Donald Drakeman will be joining the Board of Directors as an independent board member. Dr. Drakeman co-founded two major international biotech companies focused on antibody therapeutics.
LAB Research Inc. (TSX: LRI) has entered into an Equity Line Facility agreement with Dutchess Opportunity Cayman Fund Ltd., a fund managed by Dutchess Capital Management, II LLC. Under the terms of the agreement Dutchess has committed to providing up to $10 million of capital during the next two years, at LAB’s discretion, through the subscription of newly issued common shares. The common shares will be issued at a 3% discount to the prevailing share price, subject to the applicable minimum price. LAB is restricted from issuing shares to the extent such shares would result in Dutchess and affiliates owning more than 9.9% of the issued and outstanding LAB shares. LAB may issue up to the lower of either 13,177,686 common shares or 25% of issued and outstanding shares. The ELF may be terminated by LAB at any time without paying additional fees. LAB will file a short form base shelf prospectus in each Canadian province to allow LAB to qualify the shares issued under the ELF and make offerings of shares, securities, warrants, units, or combinations thereof for an amount of up $25 million during the next 25 months.
Licensing and Commercial Deals
MethylGene Inc. (TSX: MYG) and Otsuka Pharmaceutical Co. Ltd. have further extended their research collaboration for the development of therapeutic compounds for the treatment of ocular diseases. The extension will provide an additional US$1.27 million in research funding to MethylGene. MethylGene is entitled to receive up to approximately US$50.5 million in milestone payments, as well as royalties on sales of resulting products. The first payment would be received upon commencement of toxicity studies by Otsuka.
Aeterna Zentaris Inc. (TSX: AEZ, NASDAQ: AEZS) announced a personalized medicine collaboration with Almac’s Diagnostics division to determine expression of LHRH receptors in certain tumors — Aeterna’s AEZS-108 is an LHRH-targeted compound in Phase II trials. Financial terms were not disclosed.
Immunovaccine Inc. (TSXV: IMV) has signed a research agreement with Oncothyreon Inc. (NASDAQ: ONTY) to develop a therapeutic cancer vaccine. Oncothyreon’s ONT-10 vaccine candidate will be formulated in Immunovaccine’s DepoVax™ delivery platform for clinical testing. Financial terms were not disclosed.
GeneNews Limited (TSX: GEN) has executed a formal marketing partnership agreement with GeneDiagnostics Inc., after executing a binding term sheet (covered here), to market the ColonSentry™ colorectal cancer test in China. Financial terms were not disclosed.
Spencer Pharmaceutical Inc. (PINKSHEETS: SPPH) has announced an agreement with University of Quebec at Montreal. Spencer will develop applications from platform technologies while marketing to commercial and industrial partners. Spencer has acquired the rights to develop a[n undisclosed] patented technology for the treatment of metabolic syndrome and other chronic diseases. Financial terms were [also] not disclosed.
Critical Outcome Technologies Inc. (TSXV: COT) will be receiving up to $300,000 in non-repayable funding, and business and technical advisory services, from the National Research Council of Canada. The funding will be used to support a project to develop novel compounds for treatment of acute myelogenous leukemia.
Covalon Technologies Ltd. (TSXV: COV) has been approved for approximately $150,000 in funding, as well as technical and business advisory services, from the NRC. The funding will be used to assist in commercializing Covalon’s antimicrobial coatings for metal orthopedic implants.
Innovotech Inc. (TSXV: IOT) has secured $900,000 in funding from Agriculture and Agri-Food Canada to facilitate the commercialization of Agress™, an environmentally friendly plant additive that protects against bacterial and fungal infections. The funding will be used to expand to field trials with high value crops, and obtain regulatory approval for Agress™.
Ondine Biopharma Corporation (TSX: OBP) intends to establish a subsidiary, “Sinuwave Technologies Corporation“, to develop and commercialize photodisinfection based products for the chronic sinusitis market. Sinuwave will licence Ondine technology, including technology obtained in Ondine’s acquistion of Advanced Photodynamic Technologies Inc. (covered here).
Ondine has also received a $500,000 loan from Carolyn Cross, Chairman, CEO, and shareholder, payable on September 1, 2010, and secured by a first charge on proceeds of any future financing transaction. The loan is interest free until the due date, after which it will accrue at 5% per annum, payable monthly. Proceeds from the loan will be used from R&D of new photodisinfection technology, and for working capital and general corporate purposes.
Dragon Pharmaceutical Inc. (TSX: DDD) announced that its special meeting of shareholders will be held on July 20, with a record date of May 28, 2010 will be entitled to vote upon the proposed agreement and plan of merger by and among Dragon, Chief Respect Limited, a Hong Kong corporation, Datong Investment Inc., a Florida corporation and Chief Respect subsidiary, and Mr. Yanlin Han. Under the agreement and plan, Datong will merge with and into Dragon, and each holder of Dragon shares of common stock, excluding Mr. Han, will receive $0.82 per share.
Thanks again to Keldeagh Lindsay for his help with this week’s Deal Review.