The Cross-Border Biotech Blog

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

Monday Biotech Deal Review: April 4, 2011

Welcome to your Monday Biotech Deal Review for April 4, 2011.  Valeant was a major headline last week with its hostile $5.7 billion leveraged-buyout offer for Cephalon, Inc., which some are suggesting may herald a new era of M&A activity in the biotech sector (you’ll recall that Valeant itself is the product of the recent merger with biotech heavyweight Biovail Corporation).   In addition, CCAA-protected Angiotech has filed a second amended and restated plan of compromise or arrangement and has made amendments to its support agreements, which plan is scheduled to be voted by creditors this week.  Last week continued the previous weeks’ pick-up in financing, with some newly announced and closed private placements.  And to top it off there were also a number of interesting commercial and licensing transactions.  Read on to learn more.  

Valeant’s Hostile Offer for Cephalon

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) has proposed to the board of directors of Cephalon, Inc. (NASDAQ: CEPH) to acquire Cephalon for $5.7 billion, translating into $73.00 per share in cash (representing a premium of approximately 29% over Cephalon’s 30-day trading average) by way of a leveraged buy-out supported by Goldman Sachs & Co. The bid will also be accompanied by a consent solicitation process whereby Valeant will seek to replace the current board of Cephalon with its own nominees.  Cephalon’s board of directors rejected Valeant’s offer.

Angiotech Update

CCAA-protected Angiotech Pharmaceuticals, Inc. has filed a second amended and restated CCAA Plan of Compromise or Arrangement with the Supreme Court of British Columbia, which amendments: (i) extends the deadline by which certain creditors with claims ranging from $5,000 – $31,250 must elect whether to receive a cash payment of $5,000 in satisfaction of their claims; (ii) permit a new election for certain creditors with claims in excess of $31,250 to receive $0.16 on every dollar of their claim instead of receiving new common shares of Angiotech, and (iii) remove a proposed additional payment of 3.5% of new common shares to certain subordinated noteholders who, prior to November 30, 2010, consented to the Recapitalization Support Agreement dated October 29, 2010, which 3.5% is now to be allocated pro rata to all creditors.  The creditors’ meeting is still to take place April 4, 2011 and, if approved by the required majority of affected creditors, an application for court approval of the second amended and restated plan will be brought April 6, 2011.

Angiotech also extended its offer to exchange new senior floating rate notes due 2013 for all of its outstanding senior floating rate notes from 11:59 p.m. (New York City time) March 30, 2011 to 11:59 p.m. (New York City time) April 22, 2011.  As of March 29, 2011, approximately $190,637,000 in aggregate principal amount had been validly tendered for exchange.

M&Eh

Immunall Science Inc. (CNSX: GNS), Altius Edge Ltd, Aileron Ventures Limited and Nautor Progressive Corporation announced the amalgamation of Immunall and Altius into a new AmalCo which will continue under the name Immunall Science Inc. Former Immunall shareholders received, in exchange for each of their former Immunall shares, one share of AmalCo, 0.025 of a Nautor common share and 0.025 of an Aileron common share.  Stock options of former Immunall were exchanged for equivalent stock options in AmalCo.  Following the amalgamation, former Immunal shareholders now hold approximately 91.25% of the issued and outstanding common shares of Amalco and approximately 10% of the issued and outstanding common shares of each of Aileron and Nautor.  Each of Aileron and Nautor hold approximately 4.375% of the outstanding common shares of Amalco, and are now reporting issuers in each of British Columbia, Alberta and Ontario.       

Equity Investment

MethylGene Inc. (TSX: MYG) is closing its previously announced $34.5M private placement (covered here), having received the majority of the subscription amounts and following receipt of approval of more than 50% of the shareholders of the corporation.  Under the offering, 277,494,756 units will be issued at $0.1243 per unit, each unit consisting of one common share and 0.30 of a common share purchase warrant, exercisable for 5 years following closing at an exercise price of $0.1492 per whole warrant.  MTS Securities, LLC acted as financial advisor for the offering in the U.S.

Helix BioPharma Corp. (TSX:  HBP) completed a private placement of 918,365 units at $2.39 per unit for net proceeds of approximately $2M.  Each unit consisted of one common share and one common share purchase warrant exercisable at $3.35 for five years following closing.  The closing of this private placement follows a private placement of 1,652,719 units announced March 28, 2011, bringing the total number of units issued to 2,571,084 and total net proceeds of approximately $5.9M.

Stem Cell Therapeutics Corp. (TSXV: SSS) completed its previously announced offering of units (covered here), resulting in the issuance of an aggregate of 18,181,819 units at a price of $0.11 per unit for gross proceeds of $2M.  Each unit consisted of one common share and one-half of one common share purchase warrant, each whole warrant exercisable at $0.16 until March 31, 2014.  Euro Pacific Canada Inc. acted as agent, with Bloom Burton & Co. acting as selling firm.

Kane Biotech Inc. (TSXV: KNE) announced a non-brokered private placement of up to 12,500,000 units for gross proceeds of up to $1.5M.  Each unit will be issued at a price of $0.12 per unit and will consist of one common share and one common share purchase warrant exercisable at $0.17 for 18 months following the date of issue.  Finders’ fees will be available for persons who introduce potential subscribers.

Collaboration, Licensing and other Commercial Transactions

Advitech, Inc. (TSXV: AVI) announced $1.4M in funding from AVAC Ltd. for its subsidiary Botaneco Specialty Ingredients, Inc. for the development of next generation, plant seed derived Hydresia(R) oleosome products, which funding will be paid in instalments over 24 months on achievement of certain milestones.  In return, Botaneco will provide AVAC with royalty payments on all gross revenues until an aggregate return to a maximum of two times the gross amount invested is remitted.

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) signed a collaboration agreement with Promius(TM) Pharma, LLC, which is an affiliate of Dr. Reddy’s Laboratories (NYSE: RDY), for the manufacturing, distribution and marketing rights of Valeant’s Clodern(R) Cream by Promius in the U.S.  Financial terms were not disclosed.

The Enterprise Management Software division of QHR Technologies Inc. (TSXV: QHR) subsidiary QHR Software Inc. has signed new licensing and services contracts valued at over $1.1M with new and existing clients.

IMRIS Inc. (NASDAQ: IMRS) (TSX: IM) announced it has sold IMRISNV to University of Utah Hospital in Salt Lake City, Utah.

EnWave Corporation (TSXV: ENW) (FRA: E4U) has completed its previously announced acquisition (covered here) of all patents and know-how that it previously licensed from the University of British Columbia for Radiant Energy Vacuum dehydration technology.  EnWave paid UBC and certain inventors an aggregate of $3,087,500 in cash (subject to adjustment not to exceed $750k) and 1,206,500 common shares.

Med BioGene Inc. (TSXV: MBI) and Precision Therapeutics, Inc. amended their previously announced commercialization, license and research reimbursement agreement (covered here) in response to an improved offer from Precision, which agreement provides to Precision (subject to certain approvals) exclusive global rights to develop and commercialize LungExpress Dx(TM).  Amendments include: (i) payment of license fees and research reimbursements by Precision to MBI totalling US$2.3M within 120 days of closing, half of which is credited against royalty fees payable; (ii) royalty payments based on an undisclosed high single-digit, increased by 0.5%, of Precision’s future net revenues; and (iii) agreement by MBI to pay Precision a break fee of US$375k, increased from $250k, plus amounts paid to MBI by Precision under a support agreement relating to reimbursement of legal fees associated with defending the lawsuit brought by Signal Genetics, LLC.

Functional Technologies Corp. (TSXV: FEB) entered a collaboration agreement with an undisclosed multinational company to evaluate proprietary acrylamide-preventing yeasts in one of several sectors of food-related products.  Under the agreement, the partner will seek to confirm the general and performance characteristics of the yeasts and has been granted a right of negotiation to license or commercialize the yeasts for certain food-related applications during a fixed evaluation period.

Other Securities Regulatory Announcements

Labopharm Inc. (TSX: DDS) (NASDAQ: DDSS) received notice that its Nasdaq-listed securities were below the minimum requirement of US$50M for 30 consecutive business days.  The company has until September 26, 2011 to regain compliance with the Nasdaq listing requirements.

ProMetic Life Sciences Inc. (TSX: PLI) was unable to file its annual financial statements and MD&A for the financial year ended December 31, 2010 and related certifications required under securities law due to a post-balance sheet event of material importance. During its period of default, the company will issue bi-weekly default status reports and the company has confirmed there are no insolvency proceedings against them or other material information that has not been generally disclosed.

CCAA-protected Ambrilia Biopharma Inc. provided its bi-weekly default status report under National Policy 12-203 – Cease Trade Orders for Continuous Disclosure Defaults.  The company announced that the filing of its 2010 audited financial statements, annual MD&A and related certifications and its annual information form were being delayed beyond the filing deadline due to measurement uncertainty.

Other Corporate Announcements

Medifocus Inc. (TSXV: MFS) has appointed former Ontario premier Mr. Ernie Eves, Q.C. to its board of directors.

BELLUS Health Inc. (TSX: BLU) completed its restructuring and strategic initiatives resulting in liquidation of subsidiaries in Europe and U.S. and the repatriation of IP to Canada and reduction of operating expenses by approximately $1.4M per year.

Immunovaccine Inc. (TSXV: IMV) issued 11,250 common shares at a deemed price of $0.80 per share to S.P. Angel Corporate Finance LLP, pursuant to a consulting agreement dated November 1, 2010 between the company and S.P. Angel.

 
 

 

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2 responses to “Monday Biotech Deal Review: April 4, 2011

  1. Pingback: Monday Biotech Deal Review: April 11, 2011 « The Cross-Border Biotech Blog

  2. Pingback: Monday Biotech Deal Review: April 18, 2011 « The Cross-Border Biotech Blog

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