The Cross-Border Biotech Blog

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

Monday Biotech Deal Review: August 16, 2010

Another decent week for Canada’s biotech companies, with about $30 million of securities sold and more deals launched. Big headlines this week for Alectos’ Alzheimer’s collaboration with Merck, which gets a US$289 million number but declines to split out the up-front payment or other details of the fee structure. Also, eHealth Ontario is spending significant money again, this time awarding a $46.5 million contract to a CGI subsidiary for work on a chronic disease management system. Finally, Biovail sold some CRO assets in a deal that passed under the radar until their Q2 report. 

And, to make sure an important thank-you doesn’t fly under the radar, I’d like to include an above-the-fold thanks this week to Keldeagh Lindsay, the Ogilvy Renault student who has been doing a great job helping out with the Monday Biotech Deal Review all summer. And now,

Securities

Medifocus Inc. (TSXV: MFS) has completed a $734,999 private placement of 2,449,997 $0.30 units. Each unit is comprised of one common share and one (2-year, $0.50) warrant. The warrants have a 10-day, $0.75 acceleration trigger. Proceeds will be used to initiate a phase III clinical trial using the Microfocus APA 1000 System for the treatment of breast cancer and as working capital. Medifocus is also finalizing a debt settlement with third party creditors, employees and service providers by issuing 3,592,105 common shares (at $0.50 per share) to settle the debt.

Premier Diagnostic Health Services Inc. launched a non-brokered private placement of up to 3,060,000, $0.85 common shares for gross proceeds of $2,601,000, to be used: to support and expand an operating Centre for Advanced Diagnostics, a PET/CT diagnostic scanning facility in Burnaby, British Columbia; to open Premier’s first MRI clinic in partnership with a Beijing-based company; to expand Premier’s cooperative ventures with hospitals in China in order to equip them with medical diagnostic equipment; and as general working capital. The  offering is expected to close on September 15, 2010.

Helix BioPharma Corp. (TSX: HBP) has closed a private placement of 4,530,000 $2.43 units, comprising of one common share and one (3-year, $3.402) warrant. Expected net proceeds of $9.5 million will be used for working capital including clinical trials. 

Immunovaccine Inc. (TSXV: IMV) has launched a prospectus offering of units in Ontario, Alberta, British Columbia, Nova Scotia, and Newfoundland and Labrador. Each unit will be comprised of one common share and one half of a 3-year warrant. The offering is expected to close in September, 2010. Further details will be disclosed immediately prior to the filing of the final short form prospectus. The agents Paradigm Capital Inc. will be granted an option to purchase warrants in the amount of up to 15% of the number of units sold. Proceeds will be used to develop human vaccine products using its DepoVax™ vaccine platform and for general corporate purposes.

T-Ray Science, Inc. (TSXV: THZ) has completed its previously announced $774,610 private placement of 3,000,000 $0.22 units (covered here). The placement was over-subscribed by 520,955 units for a total of 3,520,955. Each unit is comprised of one common share and a one half (1-year, $0.30) warrant. $47,888.80 and 217,676 warrants were paid to parties that referred subscribers to the placement.

SQI Diagnostics Inc. (TSXV: SQD), announced that it closed its previously announced non-brokered $5.7 million private placement (covered here). The placement consists of 2,280,000 $2.50 units, comprised of one common share and one-half of a (2-year, $5.00) warrant. Kingsdale Capital Markets Inc. was paid a finders fee equal to 4.5% of the gross proceeds and issued a compensation warrant for 57,000 $2.50 units. Proceeds will be used to fund development and commercialization programs, and as general working capital.

Medicago Inc. (TSX: MDG) has undertaken an overnight marketed offering of 18,518,520 units comprised of one common share and a three-quarter (5-year, $0.50) warrant. Expected gross proceeds of $7.5 million will be used to fund Medicago’s participation in the cost-sharing program pursuant to the previously announced Technology Investment Agreement following the $21 million award from the Defense Advanced Research Projects Agency (covered here), and for general corporate purposes and as working capital. The transaction is expected to close around August 19, 2010.

IntelGenx Technologies Corp. (TSXV: IGX) issued options to two new Directors.  Mr. John Marinucci and Professor Thomas Kissel have joined the Board of Directors and were each granted 75,000 (5-year, $0.38) options, vesting over two years.

Sales, Licensing and Other Commercial Developments

Alectos Therapeutics Inc. announced a research collaboration with Merck to identify and develop compounds that modulate an Alzheimer’s disease enzyme. Merck has gained the exclusive, worldwide license to research, develop and commercialize compounds that modulate the enzyme, and in return will pay Alectos an upfront fee and will fund Alectos’ study of existing portfolio of anti-Alzheimer’s disease compounds. Alectos is eligible to receive a total of US $289 million in fees, royalty payments, and R&D milestones. The parties will collaborate on discovery efforts and preclinical development. Merck is responsible for clinical development and will have worldwide marketing and commercialization rights to any resulting products.

CGI Information Systems and Management Consultants Inc., a subsidiary of CGI Group Inc. (TSX: GIB.A), has been awarded a six-year, $46.2 million contract by eHealth Ontario and Infrastructure Ontario, for work on a chronic disease management system to be used initially as an interactive, real-time Diabetes Registry information tool to manage diabetes care and prevent the onset of related conditions such as heart disease, stroke and kidney disease. Payment to CGI will begin after substantial completion of the project, and continue over a five-year operations and maintenance period.

Medworxx Inc. (TSXV: MWX) is partnering with ModelAdvice DC Consulting Ltd UK and entering the UK market. Model Advice will utilize Medworxx’s Utilization Management System  in performing Bed Census Audits. The system monitors patient stay, highlights care delays, assesses discharge readiness, and provides consistency in the care process and an understanding of when the patient should be discharged with no compromise to patient safety.

Nightingale Informatix Corporation (TSXV: NGH) has signed a five-year agreement with the AIM Health Group (TSXV: AHG) to provide AIM’s clinics with Nightingale’s EMR and practice management solution. Patients will also be offered Nightgale’s integrated health management tool, allowing them to access their health records. Under the terms of the five-year agreement, AIM will pay for training and implementation of On Demand, and a monthly transaction fee.

MDS Nordion, has extended its existing agreement with Ontario Power Generation Inc. to 2020 for the secure supply of cobalt-60 used in MDS’ medical gamma sterilization and sealed source products.

YM BioSciences Inc. (TSX:YM, AMEX:YMI) announced that the U.S. Food and Drug Administration has granted Orphan Drug Designation to YM’s JAK1/2 inhibitor, CYT387, for the treatment of myelofibrosis, which includes seven years of market exclusivity and tax credits for clinical research costs. CYT387 is currently undergoing Phase I/II clinical studies at Mayo Clinic. Detailed safety and activity data for the drug will be presented at the American Society of Hematology in December.

Labopharm Inc. (TSX: DDS; NASDAQ: DDSS) has launched its once-daily antidepressant Oleptro™ in the United States via joint venture with Gruppo Angelini. The sales effort is complemented by a managed care strategy, and involves a sales force of 145 individuals.

M&Eh

Lambda Therapeutic Research has acquired the contract research assets from Biovail CRD for net proceeds of $6,000,000, according to Biovail’s Quarterly Report for the period ending June 30, 2010. Biovail’s termination costs total $1,924,000 for 70 CRD employees not expected to be offered employment by Lambda.

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