Welcome to your Monday biotech deal review for February 28, 2011. In addition to the usual reviews of biotech corporate activity, this week featured the announcement of Theratechnologies’ U.S. IPO, the closing of a $40M bought deal by Paladin Labs, Angiotech’s recapitalization amendment and the appointment of a Receiver for LAB Research. Read on to learn more.
Paladin’s Busy Week
Paladin Labs Inc. (TSX: PLB) closed its bought deal offering of 1,150,000 common shares, which includes the 150,000 common shares issued pursuant to the underwriters’ over-allotment option. The common shares were issued at a price of $35.00 per common share for total proceeds of approximately $40.25M. The syndicate of underwriters was led by GMP Securities L.P., and included Paradigm Capital Inc., RBC Dominion Securities Inc., TD Securities Inc., Versant Partners Inc., Cormark Securities Inc. and Desjardins Securities Inc. Paladin also announced Health Canada approval for Abstral(R), for the management of breakthrough pain experienced by cancer patients.
Paladin has also agreed to accept repayment of its secured debt facility of £50M with ProStrakan, in connection with the proposed acquisition of ProStrakan by Kyowa Hakko Kirin Co., Ltd. Paladin will receive payment equivalent to the balance of interest payable for the first year with a $2M break fee, totalling $3,089,200. Paladin will also retain rights to products for Canada, licensed in connection with the agreement. Paladin is also increasing and accelerating its purchase of shares of Pharmaplan of South Africa by an additional 10%. Effective March 1, 2011, Paladin will own 44.99% of the shares.
Angiotech Restructuring Amendment
Angiotech Pharmaceuticals, Inc. and Senior Floating Rate noteholders have amended for the sixth time the Floating Rate Note Support Agreement. The amendments (i) amend the interest rate for new floating rate notes to be issued in connection with an exchange offer, (ii) impose restrictions on application of net proceeds received by the Company from asset sales, and (iii) the noteholders will not oppose contemplated recapitalization transactions. As well, additional noteholders executed joinders to the support agreement, bringing support up to 89% of the outstanding existing floating rate notes.
Theratechnologies announces U.S. IPO
Theratechnologies Inc. (TSX: TH) filed a preliminary short form base PREP prospectus in each province and a registration statement on Form F-10 with the S.E.C. in connection with the Company’s U.S. IPO. The Company has applied to list its shares on Nasdaq under the symbol “THER”.
Receiver appointed for LAB
The main Canadian lender of LAB Research Inc. (TSX: LRI) has obtained an order appointing Samson Belair Deloitte and Touche to act as Receiver pursuant to the Bankruptcy and Insolvency Act, which has taken control of the operations of the Company. The Company also announced that the US based private equity group that expressed an interest in possibly making a purchase (covered here), is no longer interested.
Med Biogene Litigation Update
Further to the announcement of a lawsuit covered previously, Signal Genetics amended its complaint filed in the Supreme Court for the County of New York, charging Med Biogene (TSXV: MBI) with fraud and Precision Therapeutics, Inc. with tortious interference. The complaint stems from allegations that Med Biogene’s breached a licensing agreement.
Other Securities and Investment
Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) filed prospectus supplements to its existing U.S. and Canadian shelf prospectuses, in connection with an At-the-Market Sales Agreement with McNicoll, Lewis & Vlak LLC, pursuant to which the Company may, at its discretion, sell at market price up to 12,500,000 common shares on the Nasdaq, not to exceed US$19.8M, for two years. McNicoll will act as sales agent for any sales under the agreement.
PharmaGap Inc. (TSXV: GAP) (OTC: PHRGF) completed an initial closing of a private offering of equity units for initial gross proceeds of $835,725. A total of 7,597,500 units were issued at a price of $0.11 per unit. Each unit consisted of one common share and one common share purchase warrant, exercisable for two years at a price of $0.16 per common share. Northern Securities Inc. will be issued 143,800 broker warrants as well as $15,808 in cash fees. The final closing is expected on or about March 11, 2011 and, if fully subscribed, will result in total gross aggregate proceeds of $1M
Pharmagesic (Holdings) Inc. has extended its offer to acquire all of the issued and outstanding restricted voting shares of WEX Pharmaceuticals Inc. (TSX: WXI) to 5:00 p.m. (Vancouver Time) on March 10, 2011. Following the acquisition of the 6,020,562 restricted voting shares already deposited pursuant to the offer, Pharmagesic will hold 89.989% of the issued and outstanding restricted voting shares of WEX.
Biopharmacopae Design International Inc. closed a $2M private financing round with Canadian venture capital firm Avrio Ventures, which funds will be used to further advance commercialization of RIDOVIR(TM) Cold and other products in the Canadian and international markets.
Adherex Technologies Inc. (TSX: AHX) changed the record date for its previously announced rights offering (covered here) from 5:00 pm New York City time on February 24, 2011 to March 2, 2011, at which time the subscription period will commence.
Other Corporate Announcements
Isotechnika Pharma Inc. (TSX: ISA) announced that its partner, Lux Biosciences, Inc. commenced a pivotal Phase 3 trial using voclosporin for the treatment of non-infectious uveitis.
Opsens Inc. (TSXV: OPS) reached a milestone with the successful completion of a pre-clinical animal study of the EasyWire device, which measures Fractional Flow Reserve in the evaluation of coronary lesions.
Stem Cell Therapeutics Corp. (TSXV: SSS) restated its unaudited interim consolidated financial statements for the quarter ended September 30, 2010 and will re-file restated Financial Statements. Due to a calculation error in respect of non-cash expenses for stock options and accrued expenses for the period, the Net Loss is decreased by $70,000.
BioExx Specialty Proteins Ltd. (TSX: BXI) has been awarded certification for ISO 22000:2005, which is required to sell conforming protein products into human food markets.
Immunotope Inc. and Immunovaccine Inc. (TSXV: IMV) were issued an official Notice of Allowance by the U.S. Patent and Trademark Office for a new patent specific to the DPX-0907 therapeutic cancer vaccine.
Warnex Inc. (TSX: WNX) has been selected by Genzyme Canada Inc. to serve as central laboratory across Canada for the Lysosomal Storage Disorders Testing Program.