The Cross-Border Biotech Blog

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

Monday Biotech “Happy Holidays” Deal Review: December 27, 2010

Welcome to your Monday Biotech “Happy Holidays” Deal Review!  For those who may have noticed, last week the Monday Biotech Deal Review took its own holiday, so this week’s digest contains biotech news spanning the past two weeks – to ensure you don’t miss a single drummer boy’s beat.  It has been a busy two weeks, with a notable $40M public offering by YM BioSciences of common shares that was announced, priced and closed, as well as an update by Angiotech with respect to its debt restructuring efforts.  There have also been some interesting strategic partnerships and licensing activity over the break.  Read on to learn more.    

Angiotech Restructuring Update

Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI) (TSX: ANP) and U.S. Bank National Association (successor trustee under the subordinated note indenture dated March 23, 2006), at the direction of the majority of 7.75% senior subordinated noteholders, executed a supplement to the subordinated note indenture extending the cure period applicable to interest payments due on the notes from 90 to 120 days before an event of default under the indenture occurs.

Angiotech also extended for a second time the deadlines under the Recapitalization Support Agreement and Floating Rate Note Support Agreement, each dated October 29, 2010 and amended November 29, 2010, including the extension of deadlines by which Exchange Offers must be commenced to January 11, 2011, as well as the date by which the Minimum Exchange Offer Threshold must be achieved, which is now extended to February 9, 2011. 

Investment

YM BioSciences Inc. (AMEX: YMI) (TSX: YM) announced an underwritten public offering of its common shares, offered pursuant to a prospectus supplement filed with the S.E.C.  Subsequently, YM announced the details of its public offering which was 25,000,000 common shares at a price of $1.60 per share.  YM closed the financing for net proceeds before expenses of US$37,650,000.  Pursuant to the offering, underwriters were granted a 30-day option to purchase up to 3,750,000 additional common shares at US$1.60 per share to cover over-allotments, which option was fully exercised, and which resulted in total net proceeds to YM of US$43,300,000.  Roth Capital Partners, LLC acted as sole book-running manager.  The securities were sold pursuant to a registration statement filed with the S.E.C. which became effective December 1, 2010.

Functional Technologies Corp. (TSXV: FEB) closed a non-brokered private placement of units.  In total, 7,272,845 units were issued for gross proceeds of approximately $4,000,000.  A total of $310,862 was paid as well as warrants issued to purchase 552,724 common shares, in finder’s fees. 

Miraculins Inc. (TSXV: MOM) closed a private placement raising aggregate proceeds of $730,000 from the sale of 6,083,331 units at a price of $0.12 per unit.  Each unit consisted of one common share and one half of one share purchase warrant, each warrant exercisable at $0.18 for 12 months from issue.  The warrants may be called at the option of the company, anytime after six months following their issue, if the common shares trade at or above $0.25 for any five out of ten consecutive trading days.  A finder’s fee of up to 10% of the subscription proceeds as well as finder’s warrants was also paid by the company.

CardioComm Solutions, Inc. (TSXV: EKG) will conduct a non-brokered private placement of 6,000,000 units to MD Primer Inc. at a price of $0.05 per unit, for gross proceeds of $300,000.  Each unit will consist of one common share and one common share purchase warrant exercisable at a price of $0.10 for two years following closing.  CardioComm’s Chairman, Dr. Anatoly Langer, is the majority shareholder of MD Primer.  Following the transaction, Dr. Langer will have control or direction over approximately 51.6% of the shares of CardioComm.

Chemaphor Inc. (TSXV: CFR) raised $80,000 through a private placement, which resulted in the issuance of 800,000 common shares and 400,000 common share purchase warrants through a sale of units.  Each unit was issued at a price of $0.10.  The warrants are exercisable at $0.10 for two years following close, but are subject to accelerated expiry if, after the four month hold period expires, the closing price of the company’s common shares exceeds $0.20 for any 20 consecutive trading days.  In such case, the warrants expire 30 days following notice of accelerated expiry.  Bloom Burton & Co. Acted as agent/finder and received $8,000 in cash commission as well as warrants to acquire 80,000 common shares. 

Oncolytics Biotech Inc. (TSX: ONC) (NASDAQ: ONCY) provided notice of acceleration of expiry of warrants issued November 23, 2009 because the 10-day volume-weighted average trading price of common shares has exceeded the equivalent of US$6.50 per common share.  The warrants now expire at the close of business Monday January 24, 2011.   If all warrants are exercised, Oncolytics will receive approximately US$6.75M.

Warnex Inc. (TSX:WNX) signed a Contribution Agreement with the National Research council of Canada’s Industrial Research Assistance Program (NRC-IRAP) for forensic DNA analysis of “Touch DNA” samples from expended firearm cartridges.  NRC-IRAP will contribute up to $47,300 for R&D as well as technical and business advisory services.  Warnex also received accreditation from the American Society of Crime Lab Directors/Laboratory Accreditation Board for forensic science testing in the categories of nuclear and mitochondrial DNA testing, relationship testing and body fluid identification.

Kane Biotech Inc. (TSXV: KNE) received $100,000 in financial assistance from the Government of Manitoba through its Technology Commercialization Program.

The U.S. subsidiary of Stellar Biotechnologies, Inc. (TSXV: KLH) has been awarded a $99,000 grant from the National Science Foundation through the Technology Enhancement for Commercial Partnerships program, which is an extension to the company’s SBIR grant.

Other Biotech Securities Developments

Cardiome Pharma Corp. (NASDAQ: CRME) (TSE: COM) filed a preliminary short-form base shelf prospectus with Canadian securities regulators as well as a shelf registration statement with the U.S. S.E.C. to replace the base shelf prospectus that expired December 5, 2010.  Under the base shelf prospectus, Cardiome will be able to offer up to $250,000,000 in common shares, preferred shares, debt securities and warrants from time to time over a 25-month period.

Akela Pharma, Inc. (TSX: AKL) received notification from the TSX that, following a review, the company’s common shares continue to meet the continued listing requirements of the TSX.

CCAA-protected Ambrilia Biopharma Inc. (TSX: AMB) provided its bi-weekly Default Status Report under National Policy 12-203 – Cease Trade Order for Continuous Disclosure Defaults.  Since its most recent default announcement on November 10, 2010, there have been no material changes.

Immunovaccine Inc. (TSXV: IMV) granted, on December 16, 2010, 1,011,500 stock options to employees, consultants, officers and directors pursuant to its stock option plan.  The options were granted at an exercise price of $1.00 and will vest in thirds at 6, 12 and 18 months from date of grant.  The options expire five years from date of grant. 

Cynapsus Therapeutics Inc. (formerly Cannasat Therapeutics Inc.) (TSXV: CTH) announced the transfer of an aggregate 7,780,878 common shares from an unnamed vendor to Lorne Gertner and David Hill, who now hold 13.26% and 13.36% of the outstanding common shares of Cynapsus, respectively.

Critical Outcome Technologies Inc. (TSXV: COT) filed an Amended Statement of Executive Compensation (Form 51-102F6) following a review by the OSC.  Cynapsus has also retained Summer Street Research Partners to provide financial and advisory services on any potential financing, partnering, merger or acquisition transactions.

Adherex Technologies Inc. (TSX: AHX) responded to a request from IIROC, on behalf of the TSX, following recent trading activity.  According to the company, Adherex is not aware of material undisclosed corporate developments to account for the recent trading activity.

BioSyent Inc. (TSXV: RX) granted 110,000 incentive stock options to certain directors, officers and employees.  The options are exercisable at a price of $0.11 up to December 16, 2015.

Ceapro Inc. (TSXV: CZO) announced a share-for-debt transaction whereby the company will issue common shares to accepting directors at an issue price of $0.11, in satisfaction of accrued and unpaid directors fees in the aggregate amount of $175,000.  The price represents a 22.2% premium to the closing price of $0.09 on December 9, 2010 and, in total, 1,590,909 common shares are to be issued.

Collaboration, Licensing and other Commercial Transactions

Paladin Labs Inc. (TSX: PLB) and ProStrakan Group plc (LSE: PSK) plan to enter a strategic relationship whereby Paladin will be granted an exclusive license to ProStrakan’s products for emerging territories and will also acquire, through assignment, ProStrakan’s existing $81.4M secured debt facility with additional conversion rights through an amendment to the existing agreement.  The new facility will bear interest at a rate of 10.5%.  Paladin will have the option to convert the outstanding principal of the debt into new ProStrakan shares anytime following the first six months of the new amendment.  The strike price for a conversion will be £1.10 per share, representing a 24% premium of ProStrakan’s closing price as at December 14, 2010.  If fully converted, Paladin would hold have an ownership interest in ProStrakan of approximately 18.3%.

Shareholders of Isotechnika Pharma Inc. (TSX: ISA) approved the previously announced Development, Distribution and License Agreement with ILJIN Life Science Co., Ltd. (covered here) for the clinical and commercial development of Voclosporin for use in transplant indications, and which also involves the issuance and sale of 90,700,000 shares of Isotechnika to ILJIN, in three tranches.

The Animal Health division of Bioniche Life Sciences Inc. (TSX: BNC) executed an exclusive distribution agreement with IMV Technologies (France) for the distribution of Bioniche’s cattle reproduction product and select embryo transfer media products in Europe, excluding Spain, the UK and Ireland.  The agreement also includes India, where IMV will assist Bioniche with marketing in that jurisdiction.  Financial terms were not disclosed.

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One response to “Monday Biotech “Happy Holidays” Deal Review: December 27, 2010

  1. Pingback: Monday Biotech Deal Review: January 17, 2011 « The Cross-Border Biotech Blog

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