Welcome to your Monday Biotech Deal Review for March 28, 2011. There was a flurry of financing activity last week, with over $76M raised or announced in biotech funds (not including the $60M Genome Canada investment announced by the Government of Canada). Double-digit million-dollar deals included MethylGene’s $34.5M private placement announcement, Medicago’s $17M private placement announcement, and the closing of Novadaq’s $15M private placement. Read on to learn more.
MethylGene Inc. (TSX: MYG) announced a $34.5M private placement with institutional investors that include Baker Bros. Advisors, LLC, Tavistock Life Sciences, a fund managed by OrbiMed Advisors LLC, funds managed by QVT Financial LP and Tang Capital Partners, LP, as well as current MethylGene shareholders, ProQuest Investments III, L.P. and Fonds de solidarite FTQ.
Medicago Inc. (TSX: MDG) has settled the terms of an overnight marketed offering of 34,117,600 units representing gross proceeds of $17,399,976 at a price of $0.51 per unit by way of a prospectus supplement to Medicago’s base shelf prospectus dated July 7, 2010. Each unit consists of one common share and 0.25 of a common share purchase warrant, each full warrant exercisable for $0.75 for two years following closing, but subject to a 30-day accelerated expiry on notice if, for 20 consecutive trading days, the closing price of Medicago shares are equal or greater than $1.00. Desjardins Securities Inc. and Bloom Burton & Co. are co-leads, with Paradigm Capital Inc., Roth Capital Partners, LLC, Laurentian Bank Securities Inc. and RBC Dominion Securities Inc. as syndicate members. Closing is expected on or about April 5, 2011. Medicago also announced it has commenced its U.S. phase 1 clinical trial of its H1N1 influenza VLP vaccine candidate.
Novadaq(R) Technologies Inc. (TSX: NDQ) closed a previously announced private placement of units (covered here) resulting in gross proceeds of $15M and the issuance of 4,731,864 units at a price of $3.17 per unit. Each unit consisted of one common share and 0.45 of a common share purchase warrant, each whole warrant exercisable at $3.18 for five years following closing.
Immunovaccine Inc. (TSXV: IMV) will receive $2.9M in non-dilutive funding from the Atlantic Canada Opportunities Agency under the Atlantic Innovation Fund to assist the Company in developing new diagnostics to identify specific subsets of cancer patient populations that would benefit from receiving DepoVax(TM)-based vaccine therapies.
Merus Labs International Inc. (CNSX: MR) closed a non-brokered private placement with Powerone Capital Markets Limited raising a total of $2,095,000 and issuing 10,475,000 units at a price of $0.20 per unit. Each unit consisted of one common share and one common share purchase warrant, exercisable at $0.40 per share for two years from closing. A finder’s fee was paid, consisting of 8% cash commission as well as finder’s units.
Stem Cell Therapeutics Corp. (TSXV: SSS) entered an agency agreement and will sell up to 18,181,819 units at a price of $0.11 per unit for gross proceeds of $2M pursuant to an overnight marketed offering by way of a prospectus supplement to its base shelf prospectus dated March 1, 2011. Each unit consists of one common share and one-half of one common share purchase warrant, each whole warrants exercisable at $0.16 for three years following closing. The offering is conducted by Euro Pacific Canada Inc., as agent and Bloom Burton & Co., as selling firm.
Critical Outcome Technologies Inc. (TSXV: COT) closed a first tranche of a non-brokered private placement resulting in gross proceeds of $1,304,400 and the issuance of 8,152,500 units at a price of $0.16 per unit. Each unit consisted of one common share and one common share purchase warrant, exercisable at $0.30 per share for 18 months from closing. Finders’ fees were paid in a cash amount of $61,680 and 385,500 in compensation warrants, exercisable on the same terms as the unit warrants.
Hamilton Thorne Ltd. (TSXV: HTL) completed an offering of 10% convertible unsecured subordinated debentures due August 13, 2012 for gross proceeds of approximately US$650k. The 10% per annum simple interest is to be accrued and paid only upon the earlier of maturity or conversion.
Ondine Biomedical Inc. (TSX: OBP) (AIM: OBP) entered into an interest-free loan agreement with CEO Carolyn Cross, whereby Ms. Cross will advance $500k to the Company, due July 1, 2011 and secured by a first charge on the proceeds of any future financing transaction. Following July 1, 2011, interest will accrue at 5% per annum.
Other Corporate Announcements
Medifocus Inc. (TSXV: MFS) will have its company information made available via Standard and Poor’s Market Access Program, which information will include share price, volume, dividends, shares outstanding, company financial position and earnings.
Oncolytics Biotech Inc. (TSX: ONC) (NASDAQ: ONCY) completed patient enrolment in its U.S. Phase 2 clinical trial using I.V. administration of REOLYSIN in combination with paclitaxel and carboplatin in patients with advanced head and neck cancers.
Labopharm Inc. (TSX: DDS) (NASDAQ: DDSS) eliminated 38 positions in its workforce, in pursuit of cost savings. A total of 94 employees remain, and the workforce reduction is expected to save the Company approximately $3.8M per year. A $1.9M restructuring charge is expected to be incurred in the first quarter of 2011, relating to the workforce reduction.
CardioComm Solutions, Inc. (TSXV: EKG) has entered into a comprehensive investor relations agreement with California-based Artemia(TM) Communications, Inc. for the 2011 calendar year for a fee of US$7k per month, which fee is only payable unless and until CardioComm raises at least $1,000,000 in external financing. CardioComm also granted 650,000 in incentive stock options pursuant to its Omnibus Share Compensation Plan, which options are exercisable at $0.10 per share for five years from the date of grant. Finally, CardioComm intends to issue 500,000 common shares to Equity Communications Ontario, Ltd. for $0.06 per share, which issuance represents a fee owed by CardioComm to Equity under a strategic advisory agreement.
Further to the ongoing litigation saga regarding Lung Express Dx(TM) (covered here, here and here), Med BioGene Inc. (TSXV: MBI) received an offer from Signal Genetics, LLC and its subsidiary Respira Health LLC to enter into a commercialization, license and research reimbursement agreement that would provide Respira with exclusive global rights to develop and commercialize LungExpress Dx(TM).
The Government of Canada, through Genome Canada, is investing $60M in 16 applied research projects intended to use genomics research to improve key sectors of the Canadian economy.