Welcome to your Monday Biotech Deal Review for January 17, 2011. Among other things, the past week saw a third extension of deadlines for Angiotech’s debt restructuring efforts, a management-approved take-over bid of WEX Pharmaceuticals, and American DARPA money being spent on Medicago for the development of a H5N1 vaccine. Read on to learn more.
Angiotech Pharmaceuticals, Inc. (OTCQB: ANP) (TSX: ANP) has reached a third agreement to extend certain deadlines by which Angiotech must commence an Exchange Offer to recapitalize its debt under support agreements with noteholders of 7.75% senior subordinated notes and senior floating rate notes due 2013. The new deadline by which Angiotech must commence the Exchange Offer is January 28, 2011, and the date by which the Minimum Exchange Offer Threshold must be achieved is now February 28, 2011. As well, hot on the heels of last week’s announcement (covered here), the common shares of Angiotech are to be transferred from the Nasdaq Stock Market to the OTCQB™ Marketplace effective January 13, 2011. Angiotech has been advised by Pink OTC Markets, Inc., which operates an electronic quotation services for over-the-counter securities, that its securities are immediately eligible for quotation on the OTCQB.
ALDA Pharmaceuticals Corp. (TSXV: APH) (OTCQB: APCSF) has closed a previously announced private placement resulting in the issuance of 2,000,000 units at a price of $0.10 per unit for gross proceeds of $200,000 (covered here). Each unit consisted of one common share and one non-transferable share purchase warrant, exercisable at a price of $0.20 per warrant until January 12, 2013, subject to acceleration to ten days following the event that, for ten consecutive trading days, the common share price exceeds $0.40. Insiders subscribed for 1,670,000 units constituting a related party transaction.
Pharmagesic (Holdings) Inc. and its subsidiary 7735308 Canada Limited is making a take-over bid for the 11.3% of the outstanding restricted voting shares of WEX Pharmaceuticals Inc. (TSX: WXI) not already held by Pharmagesic at a price of $0.14 per share (an approximate 38% premium to the volume-weighted average closing price for the restricted voting shares over the past 20 consecutive trading days). The independent committee of WEX’s board, together with the board itself, have unanimously agreed to recommend the offer to WEX shareholders. Pharmagesic holds approximately 88.7% of WEX’s issued and outstanding restricted voting shares, as well as the sole Class A Share.
Collaboration, Licensing and other Commercial Transactions
Paladin Labs Inc. (TSX: PLB) closed its previously announced agreement with ProStrakan Group plc (LSE: PSK) (covered here). Paladin obtains an exclusive license to ProStrakan’s products for certain emerging territories and has acquired by assignment ProStrakan’s existing secured debt facility of $77.23 million, with conversion rights. The President and CEO of Paladin, Jonathan Goodman, has also joined the board of ProStrakan.
Medicago Inc. (TSX: MDG) has been selected to collaborate with Infectious Disease Research Institute on a multimillion dollar grant awarded to IDRI by the US Department of Defense’s Defense Advanced Research Project Agency for the development of a single-dose, rapidly deployable H5N1 influenza vaccine.
Spartan Bioscience Inc. will use Alere GmbH (a subsidiary of Alere Inc. (NYSE: ALR)) exclusively for the distribution of Spartan RX CYP2C19 in Germany, Austria and Switzerland. Spartan RX CYP2C19 is a point-of-care, sample-to-result DNA testing system that identifies whether patients carry the CYP2C19*2 gene mutation which causes impaired metabolism of the anti-blood clotting medication Plavix®. Financial terms of the distribution agreement were not disclosed.
BELLUS Health Inc. (TSX: BLU) has exercised its right to terminate the lease of its Laval, Quebec premises as of April 7, 2011 pursuant to the lease agreement, which will result in annual savings to BELLUS of approximately $4.5 million, and $43 million in aggregate savings over the course of the lease term. In exchange, BELLUS will issue 20,656,320 common shares to the landlord (A.R.E. Quebec No. 2, Inc.) at a price of $0.29 per share for an aggregate value of $6 million. An additional $4.2 million in deferred rent will be payable by BELLUS in cash or common shares, at the company’s option. The landlord will own approximately 13% of the issued and outstanding shares following payment.
Shares for Debt
As previously announced (covered here) Ceapro Inc. (TSXV: CZO) issued 1,590,909 common shares in full satisfaction of debts totalling $175,000 owed to members of its board of directors.
Corporate and Regulatory Announcements
Oncolytics Biotech Inc. (TSX: ONC) (NASDAQ: ONCY) has opened enrolment to its U.S. Phase I study of REOLYSIN® in combination with FOLFIRI in patients with oxaliplatin refractory/intolerant Kras mutant colorectal cancer. The trial is intended to determine a maximum tolerated dose and dose-limiting toxicities. Lorus Therapeutics Inc. (TSX: LOR) (OTCBB: LRUSF) also enrolled its first cancer patient in a Phase I clinical study evaluating anticancer drug candidate LOR-253.
Kane Biotech Inc. (TSXV: KNE) has retained IR service provider Pure Advertising and Marketing Inc. for a 12 month renewable term. Under the agreement, Kam Thindal, the sole shareholder of Pure, will receive 500,000 share purchase options, each option expiring two years following vesting. The first 300,000 options will have an exercise price of $0.20 per share, and will vest quarterly with 75,000 vesting each quarter over the first year, and 50,000 options vesting quarterly over the following years. All outstanding options will be cancelled 30 days following termination of the agreement.
Miraculins Inc. (TSXV: MOM) is planning on selling its PREVU™ technology in Q4 2011. PREVU™ has been previously cleared for sale in Canada and Europe, as well as the United States.
CCAA-protected Ambrilia Biopharma Inc. (TSX: AMB) responded to inquiries regarding unusually large volumes of trading in its common shares, stating that it is unaware of undisclosed material information that would justify the high volume of trading.