The Cross-Border Biotech Blog

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

Monday Biotech Deal Review: July 12, 2010

This week saw several interesting deals, including an $85+ million exit for Sentinelle, some “bio-bucks” made good for Cipher, a licensing deal for Amorfix’s vCJD technology, a $10 million malaria deal for BC-based Artepharm and a new name (Medwell Capital) to go along with BioMS’ new business model.

M&Eh

Hologic, Inc. (NASDAQ: HOLX) has entered into an agreement to acquire Sentinelle Medical Inc., a leading provider of MRI breast coils, tables and visualization software, for $85 million, plus a two-year contingent earn out. The earn out will be payable in cash installments equal to a multiple of the incremental revenue growth in Sentinelle’s business in the two years following closing. Sentinelle’s 2009 revenue was ~$15 million. The transaction is expected to close during the third quarter of 2010, subject to closing conditions, including Sentinelle stockholder approval and judicial approval.

Urodynamix (TSXV: URO) has entered into an agreement with the Chinese biotech company HEGLN (Dalian) for the sale of the majority of Urodynamix’s assets for $2.1 million, subject to approval by UBC, the NRC, and Urodynamix shareholders.

Ondine Biopharma Corporation (TSX: OBP) has entered into non-binding LOIs with a syndicate of private equity investors based in Europe to purchase a majority position in Ondine’s to-be-formed subsidiary, Sinuwave Technologies, which will be dedicated to developing photodisinfection solutions for the chronic sinusitis market. Under the LOIs the syndicate will receive a 70% ownership interest in Sinuwave in return for an upfront cash payment to Ondine for US$600,000 and an initial private placement of US$500,000 into Sinuwave. The syndicate would also provide Sinuwave with additional funding of up to US$1 million by way of equity purchases over a two-year period in two tranches, and would have the right to invest a further $1 million in Sinuwave on exercise of share purchase warrants. Ondine would develop and manufacture any products created under this agreement, and would be entitled to ongoing management consulting and product development fees, as well as royalties and manufacturing margins. Ondine would also be entitled to additional payments totaling up to US$250,000 based on the achievement of regulatory milestones.

Licensing and Commercial Deals

MDS Nordion (TSX: MDS, NYSE: MDZ) has signed a new contract with Lantheus Medical Imaging, Inc. for the supply of Molybdenum-99, the derivative of which is used in approximately 80% of worldwide nuclear medical procedures. The contract is in place nutil July 31, 2011 and will commence once Atomic Energy of Canada Limited’s National Research Universal reactor has returned to service (expected to be the end of the month).

T-Ray Science, Inc. (TSXV: THZ) has granted a Sub-License to Teraview Ltd. to use certain continuous wave TeraHertz technology in spectroscopy, imaging, and other technologies. Consideration was not fully disclosed, but appears to consist of royalties on U.S. sales.

Merus Labs International Inc. announced that its wholly owned subsidiary executed a binding LOI with Methapharm Inc. for the exclusive right to license, register, and distribute specific pharmaceutical products and medical devices in Canada, including Hydrogel, ulcer wound, and composite multi-layered dressings, anti-microbial silver Hydrogel dressings, and anti-fungal creams.

PharmaTrust has signed an agreement with Ontario Telemedicine Network that will allow Network members including hospitals to integrate PharmaTrust’s MedCentre remote prescription drug dispensing technology with their telemedicine service offering. The MedCentre technology allows patents to interact live with a pharmacist who provides counseling via two-way videoconferencing and controls the dispensing of medication to the patient.

Amorfix Life Sciences Ltd. (TSX: AMF) signed a partnership agreement with reMYND NV to offer the Amorfix A4 amyloid testing service to reMYND’s contract research clients. reMYND’s contract research business tests experimental Alzheimer therapies using proprietary mouse models of the disease.

Cipher Pharmaceuticals Inc. (TSX: DND) has triggered a US$1.0 million milestone payment from Cipher’s US marketing and distribution partner, Kowa Pharmaceuticals America Inc., due to cumulative sales of Lipofen®, Cipher’s fenofibrate product.

Securities

Artepharm Global Corp. (OTC: ARGC) has signed an agreement with the Qater Foundation, the Chinese government, and a private syndicate, aimed at eradicating malaria from East Africa’s Comoros Islands using Artepharm’s patented ArteQuick® Malaria treatment. The Qater Foundation has invested $5 million in Artepharm, the Chinese government has invested $3 million, and the syndicate of private individuals has contributed $2 million.

Titan Medical Inc. (TSXV: TMD) has filed an amended and restated preliminary short form base shelf prospectus relating to the offering of common shares, warrants, or units, for gross proceeds of up to $15 million, during the 25 months the prospectus remains effective. Titan has terminated its engagement of Paradigm Capital Inc. as agent for the offering announced on April 15, 2010.

Bradmer Pharmaceuticals Inc. (TSXV: BMR.H) intends to complete a private placement of up to 5,263,157 ($0.095) common shares. The $500,000 in gross proceeds will be used primarily for general corporate purposes. The closing is anticipated to occur on or around July 28, 2010.

The management and Board of Directors of Angiotech Pharmaceuticals, Inc. (TSX: ANP, NASDAQ: ANPI) are evaluating various restructuring options to raise its common share price above the NASDAQ minimum to retain its listing on that index.

Miraculins Inc. (TSXV: MOM) has granted 1,850,000 (5-year, $0.14) options to the President and CEO, a consultant, and certain directors.

The shareholders of Osta Biotechnologies Inc. (TSXV: OBI) granted 1,375,000 options to the directors, officers, and a consultant. The (10-year, $0.10) options vest immediately.

Debt

Labopharm Inc. (TSX: DDS, NASDAQ: DDSS) has announced that Hercules Technology Growth Capital, Inc. (NASDAQ: HTGC) has agreed to extend the period of interest-only payments and the maturity date of Labopharm’s debt facility. The agreement provides an additional $4.5 million to Labopharm in 2010 and throughout 2011, which will be used to facilitate the initial commercialization phase for Oleptro™, Labopharm’s once-daily formulation of the antidepressant trazodone. 

Chemaphor Inc. (TSXV: CFR) has issued a total of 256,855 common shares in satisfaction of $24,496.99 in interest accrued to June 30, 2010 on convertible debentures issued by Chemaphor on April 30, 2009.

Medworxx Solutions Inc. (TSXV: MWX) has entered into a US$1 million credit facility with Silicon Valley Bank, a member of the SVB Financial Group, secured by a first priority security interest over all company assets. Interest payable on advances will be between 7.75% and 11.3%, calculated based on ratios for monthly financial reporting provided to the lender, and estimated to be approximately 9% annually. Proceeds will be used to pay of its existing credit facility with RBC, and for general working capital purposes.

MedMira Inc. (TSXV: MIR) has settled $40,000 in outstanding debt through the issuance of 800,000 common shares at $0.05 per share.

Ch-ch-ch-changes

BioMS Medical Corp. (TSX: MWC) has changed its name to Medwell Capital Corp. Medwell’s TSX symbol changed to “MWC” on July 8, 2010.

Merck & Co., Inc. (TSX: MRK, NYSE: MRK) announced plans to phase out the Merck Frosst Centre for Therapeutic Research in Kirkland, Quebec, by the end of 2010, as part of Merck’s global merger restructuring program and follows a comprehensive review of its global research and global manufacturing facilities after merging with Schering-Plough in 2009 (covered here). Manufacturing and packaging operations at Merck’s Pointe-Claire facility will continue to support the North America region. Some Merck Frosst employees will be offered new positions within Merck’s global research network. Those employees not offered employment at another Merck site will receive a fair and competitive severance package as well as support with career transition and job search. As part of this commitment, Merck announced that over the next five years it will invest an additional $100 million in R&D with Québec companies and academic institutions.

Government Funds for GDG

GDG Environment Group (TSXV: GDG) has received $350,000 from the NRC for a project develop a nanotech biosensor to rapidly detect and quantify cyanobacterial toxins in water. The profileration of cyanobacteria in lakes and rivers has caused concern regarding human and animal health. GDE’s subsidiary, GDG Environment, will receive technical and business advisory services.

GDG has also received a repayable contribution of $450,000 from Canada Economic Development, to be used to consolidate its research infrastructure and launch a molecular biology and microbiology laboratory to conduct research on cyanobacteria.

Thanks again to Keldeagh Lindsay for his help with this week’s Deal Review.

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One response to “Monday Biotech Deal Review: July 12, 2010

  1. Pingback: MDZ - MDS INC. - Financial Ratios

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