Welcome to your Monday Biotech Deal Review for July 25, 2011. Interesting tidbits from last week included the termination of the letter of intent relating to the proposed reverse-takeover transaction between Bradmer Pharmaceuticals and P1 Energy Corp., a distribution and marketing agreement between Valeant and Sanofi-aventis Canada, a $15M loan agreement between Protox Therapeutics and Oxford Finance LLC, the filing of a preliminary short-form base shelf prospectus in the Canada and U.S. by YM BioSciences, the closing of a $7M financing round for gIcare Pharma Inc., and the acquisition by Paladin Labs of a significant number of common shares of Afexa Life Sciences. Read on to learn more.
Bradmer Acquisition and Options Grant
Bradmer Pharmaceuticals Inc. (TSX-V:BMR.H) and P1 Energy Corp. have mutually agreed to terminate the letter of intent between the parties relating to a proposed reverse take-over transaction. In connection with the termination of the letter of intent, P1 Energy agreed to pay the costs and expenses incurred by Bradmer in pursuing the transaction. The proposed transaction was initially announced by Bradmer on February 10, 2011 and trading of the common shares of Bradmer has been halted since that date. It is anticipated that the common shares of Bradmer will resume trading on the NEX Board of the TSX Venture Exchange on July 19, 2011. In addition, Bradmer has granted, subject to regulatory approval, options to directors and officers of the company exercisable to acquire an aggregate of 1,500,000 common shares, at a price of $0.10 per share, expiring July 21, 2021.
Valeant Distribution Agreement
Valeant Pharmaceuticals International, Inc.’s (NYSE: VRX, TSX: VRX) subsidiary, Valeant International (Barbados) SRL, has entered into an agreement with sanofi-aventis Canada Inc. for the Canadian marketing and distribution rights to Zuacta(TM), a topical cream of zucapsaicin, which is indicated to be used in conjunction with oral COX-2 inhibitors or NSAIDs for the relief of severe pain in adult patients with osteoarthritis of the knee. Under the terms of the distribution agreement, sanofi-aventis will receive from VIB consideration that includes an initial payment payable on the delivery of the first shipment of product and milestone payments based on net sales. Financial terms were not disclosed.
gIcare Pharma Inc. closed a $7M Series A financing co-led by Forbion Capital Partners and Genesys Capital, which will be used to develop the company’s novel alternative to perform safe, painless colonoscopies without sedation (GIC-1001).
YM BioSciences Inc. (NYSE Amex: YMI, TSX: YM) has filed a preliminary short form base shelf prospectus with securities regulatory authorities in Canada and a registration statement on Form F-10 with the United States Securities and Exchange Commission. The intent behind filing this shelf prospectus and registration statement is to provide a means for future financings for research initiatives and further development. Once the shelf prospectus is cleared and the registration statement becomes effective, these filings will, subject to applicable securities regulatory requirements, allow the Company to issue common shares, warrants and units comprising any combination of the foregoing up to an aggregate offering size of US$125,000,000, during the 25-month period that the final short form base shelf prospectus remains effective.
Protox Therapeutics Inc. (TSX: PRX) has entered into a US $15 million loan agreement with Oxford Finance LLC. Proceeds will be used to finance Protox’s late stage drug development program for the treatment of Benign Prostate Hyperplasia (BPH). In September 2010, Protox entered into an investment agreement with Warburg Pincus, a leading global private equity firm, under which Warburg Pincus committed to invest up to Cdn $35 million in Protox. A first tranche of $10 million was completed in November 2010.
Neovasc Inc. (TSXV: NVC) intends to complete a non-brokered private placement with accredited investors of up to four million equity units at the price of $1.00 per unit for aggregate gross proceeds of up to $4.0 million. The company expects that insiders will purchase approximately half of the units. Proceeds of the offering will be used primarily to fund Neovasc’s Tiara project, which is developing a novel transcatheter medical device to treat mitral valve heart disease, and to complete the COSIRA trial, which is a multicenter clinical trial intended to demonstrate the safety and efficacy of the Neovasc Reducer, an innovative implantable product for treating refractory angina. Each unit consists of one common share of Neovasc stock and one-half of one common share purchase warrant of Neovasc stock. Each whole warrant will entitle the holder thereof to purchase one common share of Neovasc stock at the exercise price of $1.25 per share for a period of two years after the closing date of the offering.
Options and Other News
Medicure Inc. (TSX-V:MPH.H) has granted an aggregate of 12,542,000 options to Dr. Friesen, Dawson Reimer, and employees and consultants of the Company pursuant to the Company’s Stock Option Plan. These options entitle the holders to acquire, on or before the tenth anniversary of the date of grant, up to 12,542,000 common shares of the Company at an exercise price being the greater of $0.10 per share and the closing price of the shares on the first full trading day after closing of the Birmingham debt settlement transactions also announced today. Of the Option Grants, 6,210,000 options were granted to Dr. Friesen and 4,000,000 to Dawson Reimer. Also announced was the completion of the following transactions;
- Settlement of the debt of USD$32,839,659 owing to Birmingham Associates Ltd. in exchange for the following consideration: (i) approximately Cdn $5 million in cash (less certain costs not to exceed $250,000); (ii) 32,640,043 common shares of the Company; and (iii) the granting of a royalty in AGGRASTAT® sales (the “Birmingham Debt Settlement“);
- borrowing Cdn $5 million pursuant to a loan from Manitoba Development Corporation (the “MIOP Loan“), to assist the current and future activities of the Company including the Birmingham Debt Settlement and certain professional costs relating thereto, secured by the Company’s assets, and guaranteed by Dr. Albert Friesen, President, CEO, and Chair, and entities controlled by Dr. Friesen; and
- issuing an aggregate of 20,000,000 common shares of the Company to Dr. Friesen and ADF Family Holding Corp. in consideration for providing the guarantee of the MIOP Loan and entered into a guarantee indemnity agreement with Dr. Friesen.
Kane Biotech Inc. (TSX-V:KNE), has granted an aggregate of 280,000 stock options at an exercise price of $.175 per common share to the four independent directors of the company. The options are set to expire five years from the date of grant and are subject to TSX Venture Exchange acceptance and the terms of Kane Biotech’s stock option plan.
M & Eh
Paladin Labs Inc. (TSX:PLB) has acquired common shares of Afexa Life Sciences Inc. (TSX:FXA) through market purchases on the Toronto Stock Exchange that give Paladin beneficial ownership of a total of 15,421,300 common shares of Afexa or approximately 14.94% of Afexa’s total issued and outstanding common shares. The 5,374,500 common shares of Afexa acquired today were purchased for prices between $0.36 and $0.55. Paladin is considering its options regarding its investment in Afexa, which may include acquiring additional shares, or making a public offer for further shares of Afexa.
Special thanks to Steven Zuccarelli for help with this week’s biotech deal review!