This week’s Monday Deal Review brings you the usual assortment of biotech wheelings and dealings from the past week, including a summary of the newly completed Valeant / Biovail merger.
The new Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) results from the completed merger of Biovail Corporation and Valeant Pharmaceuticals International following shareholder approval by both companies. The combined company will trade under the symbol “VRX” on the NYSE and TSX. Valeant shareholders receive 1.7809 Biovail common shares for each Valeant common share outstanding prior to the merger as well as a one-time special cash dividend of $16.77 per share to Valeant shareholders on September 27, 2010.
Northstar Healthcare Inc. (TSX: NHC) shareholders resolved in favour of a private placement to Canada Healthcare Acquisition Inc. as well as the termination of Northstar’s shareholder rights plan. Northstar completed these transactions and Canada Healthcare acquired 14, 583,417 common shares for $5 million, $1 million of which was received by Northstar, in advance. Canada Healthcare is indirectly controlled by former Northstar CEO and director Dr. Donald L. Kramer, M.D. Healthcare Ventures Ltd., also controlled by Dr. Kramer, exchanged all of its Class B special units in Northstar Subco, LLC and Northstar Healthcare Acquisitions, LLC for 4,195,029 common shares of Northstar. Following these transactions, Northstar has approximately 33 million common shares outstanding (fully diluted), with Canada Healthcare directly or indirectly controlling approximately 56.2% of the outstanding common shares. The Northstar directors resigned in connection with this change of control, and were replaced by Dr. Kramer, Harry Fleming, Thomas O. Foster III, Douglas A Samuelson and Daniel Steinberg.
Lorus Therapeutics Inc. (TSX: LOR) received receipt for a final short-form prospectus in Canadian provinces in connection with a rights distribution of units to its non-U.S. shareholders. Common shareholders as of October 12, 2010 will receive one right per common share held, whereby each two rights entitle the holder to purchase one unit (one common share, one common share purchase warrant exercisable for $1.33 until May 2012) of Lorus for $1.11 per unit (representing a 10% discount to volume-weighted average closing price for the five trading days immediately prior to filing of final prospectus). The rights must be exercised by 5:00 pm, November 8, 2010. Five million common shares would be issued with gross proceeds of approximately $5.5 million realized if all the rights are exercised. Proceeds will be used to fund research, working capital and the repayment of promissory notes. Lorus director Mr. Herbert Abramson has also entered into a no-fee standby purchase arrangement of $4 million for the offering. Rights-holders who fully exercise will be entitled to subscribe pro rata for additional unsubscribed units, if available. The rights will trade beginning October 7, 2010 under the symbol “LOR.RT”.
Stellar Biotechnologies, Inc. (TSXV: KLH) has agreed to complete a $1.05M private placement of 3,000,000 units at $0.35 per unit with a single long-term investor. Proceeds will be used to advance a new product line not envisioned in the previous budget. Each unit consists of one common share and one-half of one common share purchase warrant exercisable at $0.50 for eighteen months from closing. Stellar also cancelled 1,661,241 common shares on payment of approximately US$0.075 per share, and reported that it received payment of US$288,000 for a filled order of Stellar KLH/SUBUNIT from French biotechnology company Neovacs SA for its Phase IIa human trials with KLH-based vaccine for rheumatoid arthritis and upcoming Phase I trial for Lupus.
Medical device company Leap Medical Inc. met development plan milestones and completed the second tranche closing of its seed round, which will enable it to conduct its first human clinical investigation.
MedMira Inc. (TSXV: MIR) (NASDAQ: MMIRF) will issue to Swiss company Andurja AG a $1 million convertible debenture, bearing interest at 5% per annum, and convertible in whole or in part into common shares at $0.05 per share any time during the term of the debenture, which matures September 30, 2013. The debenture is repayable in cash or shares issuable under a subscription agreement entered October 1, 2010. Andurja also holds a 10,000,000 common share purchase warrant exercisable at a price of $0.10 per common share until September 30, 2012.
Development stage pharmaceutical company NeurAxon, Inc. closed a convertible debenture financing totalling approximately $14 million. The debentures are convertible under specified circumstances into class B preferred shares.
YM BioSciences Inc. (AMEX: YMI) (TSX: YM) reported that YM small molecule compound licensee Pulmokine Inc. has been awarded NIH Small Business Innovation Research grants totalling more than US$650,000 to develop novel treatments for Pulmonary Arterial Hypertension.
Further to last week’s post, SemBioSys Genetics Inc. (TSX: SBS) has retained Deloitte & Touche Corporate Finance Canada, Inc. in relation to strategic alternatives for the company. The mandate covers sales or mergers, accelerated strategic partnering transactions for either its biosimilar insulin or Apo program, asset sales, refinancing and restructuring or an orderly wind down.
Ambrilia Biopharma Inc. (TSX:AMB) obtained a sixth judicial order extending the initial order issued July 31, 2009 pursuant to the Companies’ Creditors Arrangement Act (Canada). The extension is to provide Ambrilia with more time to file a plan of arrangement and complete restructuring.
Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI) (TSX: ANP) will defer interest payments totalling approximately $9.7 million to holders of 7.75% Senior Subordinated Notes, due October 1, 2010, and is in discussions with note-holders to effect a transaction that would materially reduce existing debt levels. Angiotech also entered into a Forbearance Agreement with Wells Fargo Capital Finance, LLC under which Wells Fargo will leave in place a revolving credit facility and will not exercise its rights and remedies following the company’s decision not to make the interest payment to note-holders.
Housecleaning and Options
Ondine Biopharma Corporation (TSX: OBP) (AIM: OBP) intends to undertake a 15:1 common share consolidation which would bring its issued and outstanding common shares from 126,796,145 to 8,453,042. Outstanding stock options and warrants will be similarly adjusted. Ondine also intends to change its name to Ondine Biomedical Inc. to more accurately reflect its operations. Shareholder approval is not required for these changes, as per the company’s articles.
Kane Biotech Inc. (TSXV: KNE) granted 215,000 stock options to four independent directors. Each option is exercisable at $0.10 per common share and expire five years from date of grant.
Bioniche Trading Activity…
Bioniche Life Sciences Inc. (TSX: BNC) noted substantial share trading volume and share price increase. According to the press release, “Management believes that this market activity is driven by expectation of a disclosure concerning its U.S. Food and Drug Administration (FDA) Phase III Fast Track clinical trial with Urocidin™ a product for non-muscle-invasive bladder cancer that is refractory to current first-line therapy. Such disclosure is expected to become available within the next several weeks.”