Welcome to your Monday Biotech Deal Review for October 3, 2011. Last week witnessed a flurry of financing activity, with over $50M closed. As well, the competing take-over bids between Paladin and Valeant for Afexa heated up with both Valeant and Paladin sweetening their offers to Afexa shareholders. Read on to learn more.
Investment and Financings
Gemoscan Canada, Inc. (CNSX: GES) has closed the first tranche of its previously announced non-brokered private placement (covered here), issuing 1,771,428 ($0.35) units for proceeds of $620,000, to be used to enhance Gemoscan’s cash position and its working capital position.
Noveko International inc. (TSX: EKO) has closed its previously announced $6 million financing (covered here), consisting of a $4 million credit facility and $2 million in convertible debentures.
Medicago Inc. (TSX: MDG) has increased the size of and closed its previously announced private placement offering of 38,462,600 ($0.65) common shares for proceeds of $25 million, to be used for continued clinical development of the VLPs vaccines, the development of additional candidates, and other working capital purposes. The Ministère du Revenu du Québec has confirmed that the Medicago is a qualified issuing corporation for the purposes of the Québec Stock Savings Plan II and that the shares issued pursuant to the placement will be “qualified shares” for a QSSP II qualified mutual fund.
MSI Methylation Sciences, Inc., has raised $19 million in a Series A financing led by Inventages, to be used to fund the clinical development of s-adenosyl methionine for the treatment of depression.
Hamilton Thorne Ltd. (TSXV: HTL) has closed the second tranche of its previously announced non-brokered private placement, issuing 831,830 ($0.20) common shares for proceeds of $166,731. 35,000 finder’s warrants and US$6,783 was paid in finder’s fees to Loewen, Ondaatje, McCutcheon Limited. Hamilton also converted $1,604,250 of principal amount convertible subordinated debentures issued in August 2010 and March 2011, plus interest, into 8,589,002 common shares, at a price of $0.20 and $0.24 per share, respectively. Interest was converted at $0.20. In addition, Hamilton converted a US$50,000 convertible promissory note issued in October 2009 into 279,876 common shares at $0.20 per share. Following completion of the offering and debt conversion, there are 46,615,365 common shares issued and outstanding.
ZoomMed Inc. (TSXV: ZMD) has closed the private placement of $1,500,000 secured convertible debentures and 10,000,000 (2-year, $0.15) common share warrants, for proceeds of $1,500,000. The debentures bear annual interest of 15%, are convertible at the option of the holder on the basis of one common share for each $0.15 in principal amount of debenture, and are secured by a charge on ZoomMed assets and a promissory note. Avenue Capital Markets Inc. acted as agent and received a cash fee of 10% of gross proceeds of the placement.
Cynapsus Therapeutics Inc. (TSXV: CTH) announced that it has arranged financing of $488,503 in secured Series E Debentures, which bear annual interest at 10% and is secured by the assets of the corporation. The debentures are payable on or before March 31, 2012. Cynapsus will pay a 13% capital discount to debenture holders resulting in proceeds of $425,000. 1,700,000 ($0.05) common shares were issued to debenture holders. Cynapsus intends to complete further Series E debenture financings for additional proceeds of $1.5 million on or before November 15, 2011. Summer Street Research Partners has been retained to provide financial and advisory services. Proceeds will be used to fund ongoing R&D for the APL 130277 product, repayment of Series B debentures, and for working capital and general corporate purposes.
Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) has raised its bid for Afexa Life Sciences Inc. (TSX: FXA) by 20% to $0.85 per share, and Paladin Labs Inc. (TSX: PLB) has raised its bid to either $0.81 or 0.0217 of a Paladin share per share of Afexa, at the choice of Afexa shareholders, pursuant to its promise to enhance its offer in the event that the Alberta Securities Commission cease-traded the Afexa rights plans. The Afexa Board has approved the increased Valeant offer, along with amendments in the support agreement between Afexa and Valeant, including the removal of a minimum tender condition and an increased termination fee of $4.5 million.
SQI Diagnostics Inc. (TSXV: SQD) and Scienion AG have amended the termination window of the acquisition agreement to acquire all the shares of Scienion AG, from September 30th to October 5th. In consideration, SQI will issue 173,797 common shares to Scienion vendors.
Advitech Inc. (TSXV: AVI) and Natunola Health Biosciences Inc. (TSXV: NHI) have announced that the conditions precedent for their previously announced merger have been met, including the closing of a private placement with proceeds of at least $3,500,000, currently expected to close on or around October 7, on or around the date of the merger.
Licensing and Other Commercial Developments
iCo Therapeutics Inc. (TSXV: ICO) has entered into a research collaboration agreement with JDRF for research into treating type 1 diabetes and to support the iCo-007 Phase 2 clinical trial.
Cipher Pharmaceuticals Inc. (TSX: DND) has entered into a distribution and supply agreement with Medical Futures Inc., under which Cipher has granted Medical Futures the exclusive right to market, sell and distribute Durela™ in Canada, in return for an upfront payment of $300,000, additional milestone payments, and double-digit royalties on net sales. Cipher’s partner, Galephar Pharmaceutical Research, will fulfill product supply and manufacturing.
The Centre for Drug Research and Development‘s commercial arm, CDRD Ventures Inc. and F. Hoffmann-La Roche Ltd. have entered into a strategic collaboration agreement, whereby Roche has committed several million dollars to support and jointly develop health research technologies under the management of CDRD Ventures.
Bio Solutions Corp. (PINK: BISU) has closed the previously announced acquisition of Type2 Defense, a diabetic supplement drink.
Special thanks to Keldeagh Lindsay for this week’s Monday Biotech Deal Review!