Welcome to your Monday Biotech Deal Review for October 17, 2011. This week’s deal review is a double feature following last Monday’s Canadian thanksgiving holiday. Of note from the past two weeks were the acquisition of Labopharm by Paladin Labs, and its announcement that it is ceasing its hostile takeover pursuit of Afexa.
Allegiance Equity Corporation (TSXV: ANQ) has received TSX approval of Palm American Investment Inc.’s purchase of 229,166 ($0.48) Allegiance common shares. The proceeds will be used for general corporate purposes and to maintain patents. There are presently 7,291,087 common shares of Allegiance issued and outstanding.
Kensington Capital Advisors Inc. has announced a $1,649,885.52 investment by the Kensington Global Private Equity Fund in Protenergy Natural Foods Corporation.
Gemoscan Canada, Inc. (CNSX:GES) has closed the second tranche of its previously announced non-brokered private placement (covered here) of 240,000 ($0.35) units for proceeds of $84,000, to be used to enhance Gemoscan’s cash and working capital positions. Each unit is comprised of one Class A share and one half of one common share (2-year, $0.55) warrant. Finder’s fees of $49,280 will be payable in connection with the closing of the first and second tranches of the offering. After closing there will be 23,159,633 common shares outstanding.
Merus Labs International Inc. (CNSX: MR) has announced that is has repaid $4,444,000 of its short-term loan from Envoy Capital, using the $6,529,700 in proceeds raised from 16,324,250 warrants exercised pursuant to the previously announced warrant incentive program. Warrant holders that exercised their existing warrants prior to October 13, 2011 were granted one half of a (18-month, $0.65) bonus warrant. PowerOne Capital Markets Limited and Primary Capital Inc were paid a 4% cash payment for their assistance in having holders exercise their warrants.
SQI Diagnostics Inc. (TSXV: SQD) will not proceed with its previously announced financing and has withdrawn its preliminary short form prospectus filed with the OSC and its Form F-10 filed with the SEC.
Paladin Labs Inc. (TSX:PLB) has completed the previously announced acquisition of Labopharm Inc (covered here). Paladin has also announced that, pursuant to the non-fulfillment of a condition of its previously announced offer to acquire all issued and outstanding shares of Afexa Life Sciences Inc. (TSX: FXA) (covered here), it will not take up Afexa shares. A condition of Paladin’s enhanced offer was that there would be no increase in termination fee between Afexa and Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX)
Botaneco Corp., formerly known as Advitech Inc., (TSXV:AVI) and Natunola Health Biosciences Inc. have closed their previously announced merger and private placement (which received TSXV approval) for proceeds of $3,520,000 to be used to implement the business plan. Botaneco has also completed its 4:1 consolidation of its issued and outstanding common shares. Natunola will continue its activities as a wholly owned subsidiary. The merger consisted of an amalgamation between Natunola and subsidiary of Advitech, whereby Natunola shareholders received 4.75 Botaneco shares for Natunola shares. All outstanding Natunola options have been converted into Botaneco options. 117,333,333 ($0.03) pre-consolidation units were issued, and were comprised of one common share and one half of one common share (3-year, $0.16) warrant. Bloom Burton & Co. acted as agent and will receive $114,905 and 1,365,875 (2 year, $0.12) broker warrants, in addition to a $100,000 work fee.
Licensing and Other Commercial Developments
ProMetic Life Sciences Inc. (TSX:PLI) has received a first $730,000 follow-on purchase order under its supply agreement with Octapharma. The order relates to the purchase of a proprietary prion capture resin incorporated into Octapharma’s manufacturing process for its solvent/detergent treated plasma product.
Ceapro Inc. (TSXV:CZO) has signed a sales agreement with Ross Organic Specialty Sales Inc. for Ceapro’s entire range of Ecocert™ certified all-natural active ingredients.
Covalon Technologies Ltd. (TSXV: COV) has signed a multi-year, non-exclusive distribution arrangement with a Chinese partner to distribute Covalon’s ColActive® Plus Ag chronic wound and diabetic ulcer treatment in China. The agreement contains a minimum $12 million purchase commitment, with at least $500,000 due in the first year following regulatory approval.
Warnex Medical Laboratories, a division of Warnex Inc. (TSX:WNX) has signed an exclusive distribution agreement with deCODE Genetics for 10 of deCODE Genetics’ DNA-based tests for assessing the risk of developing certain common diseases, including prostate cancer, myocardial infarction, and cardiovascular diseases.
Labopharm Inc. (TSX: DDS) and Gruppo Angelini have completed the previously announced restructuring of their partnership (covered here), whereby Labopharm has granted Angelini an exclusive license and rights related to OLEPTRO™ in the U.S., Canada and other countries globally in exchange for a royalty on product sales. The two companies have terminated the existing joint venture agreement and ancillary agreements established in May 2010 and have dismantled the joint venture. Angelini has acquired Labopharm’s 50% ownership interest in Angelini Labopharm, LLC. Labopharm will receive a 5% royalty on net sales in the United States in excess of US$10 million in any calendar quarter and a 5% royalty on sales in countries for which it is granting rights to Angelini. As a result of the restructured agreement, Angelini is now the sole owner of all commercialization rights related to OLEPTRO™ globally. As part of the completed restructuring of the joint venture, Labopharm has granted to Angelini an exclusive license and rights to develop and commercialize Labopharm’s twice-daily acetaminophen product in exchange for a 5% royalty and milestone payments upon signing of the agreement and the achievement of an agreed-upon sales milestone.
Pivotal Therapeutics Inc. (CNSX:PVO) has engaged Phoenix Healthcare LLC for the recruitment and development of a dedicated contract sales force specializing in medical food sales for VASCAZEN™.
SemBioSys Genetics Inc. (TSX:SBS) has signed a product and platform development collaboration agreement with Tasly Pharmaceuticals, Ltd. A new Chinese company will be incorporated as a Sino-Foreign Equity Joint Venture and will develop and commercialize a variety of products including pharmaceutical, functional foods and nutraceuticals for China and the world. SemBioSys will have a 30% stake for contributing global rights to develop and manufature its plant-made insulin and insulin analogues (excluding areas SemBioSys is already engaged in active development discussions), and licensing rights for additional products. Tasly will contribute 100% of the cost of the joint venture’s research, development and product commercialization, and will facilitate regulatory services.
Special thanks to Keldeagh Lindsay for help with this week’s Monday Biotech Deal Review!