Welcome to your Monday Biotech Deal Review for June 11, 2012. The Monday Biotech Deal Review is back with Norton Rose Canada summer law student Jennifer Ng, who has agreed to assist with the deal review over the summer months. A very warm thanks to Keldeagh Lindsay for his dedication and contribution to the blog! The below covers transactions in the biotech space since since May 14, 2012. Highlights include the closing of the first tranche of Stellar Pharmaceuticals’ debt financing, as well as private placements each worth approximately $6 million closed for each of MedMira Inc. and Lorus Therapeutics. Read on to learn more.
Hamilton Thorne Ltd. (TSXV: HTL) announced that it has extended the closing deadline for its non-brokered private placement of units of the Company (previously announced on April 23, 2012) to July 7, 2012. Each unit has an offering price of $0.1125 per unit and is comprised of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder to acquire an additional common share at an exercise of $0.16875 per common share for a period of twelve months following the closing. On May 16, 2012, the Company completed the first tranche of the private placement, issuing an aggregate of 4,006,668 units at the offering price for aggregate gross proceeds of approximately US$300,000.
MedMira Inc. (TSXV: MIR) entered into an agreement with Andurja Beteiligungen AG (Andurja), a Swiss company based in Zug, Switzerland, for a $6.0 million equity investment. Under the terms of the deal, Anurja will acquire 120,000,000 equity units at $0.05 per unit. Each equity unit consists of one common share and one common share purchase warrant and is subject to a four-month hold period ending October 12, 2012. Each full warrant entitles Andurja to purchase one common share of MedMira at $0.10 per share exercisable over four years. Under the terms of this transaction, Andurja will increase its ownership of MedMira common shares from 40.4% to 58.6%, and this could increase to 68.3% if all warrants related to this transaction are exercised.
Quest PharmaTech (TSXV: QPT) announced the signing of an $8,000,000 investment agreement to support the Company’s clinical trial programs. Quest has signed an investment agreement with parties from South Korea to provide up to $8,000,000 over the next 12 months in return for the issuance of up to 15,000,000 common shares and undisclosed terms associated with successful commercialization. As the shares to be issued may create a Control Person (an investor holding greater than 20% of Quest’s shares), shareholder approval will be sought at Quest’s upcoming AGM to be held July 26, 2012.
Imaging Dynamics Company Ltd. (TSX: IDL) announced a non-brokered private placement of a maximum of 450,000,000 common shares at a price of $0.005 per common share for gross proceeds of up to $2,250,000. The common shares issued in connection with the private placement will be subject to a four-month hold period from the date of issuance. The private placement will result in issuing 285% of the current outstanding common shares and as a result, will create a new insider and effect a change of control of the Company. Subsequent to the closing of the private placement, the new subscriber will own 74% of the outstanding common shares of the Company. The subscriber is Belfry Investments Limited, a Hong Kong based company, owned by Mr. T.T. Lee.
BIOREM Inc. (TSXV: BRM) announced the final closing of its private placement. In the initial closing, a total of 535 units were issued for gross proceeds of $535,000. Subsequently, an additional 124 units were closed which brought the total units closed to 659 units for total gross proceeds of $659,000. Each unit consisted of $1,000 principal amount of 8.00% convertible extendible secured subordinated debentures with a maturity date 2 years from the date of issuance and 2,808 common share purchase warrants. The debentures are convertible into fully-paid and non-assessable common shares of the Company at the option of the holder at any time over their term at a price of $0.178 per common share. Each warrant entitles the holder to purchase one common share at a price of $0.178 per share for a period of two years from issuance.
Lorus Therapeutics Inc. (TSX: LOR) increased the number of units expected to be issued in connection with its proposed private placement of units to a maximum of 20,625,000 units at a price of $0.32 per unit for gross proceeds of up to $6,600,000. The Company intends to use the net proceeds of the private placement to continue development of its research programs and for general and administrative purposes. The maximum number of common shares issuable in connection with the private placement is 43,725,000 representing 206% of Lorus’ currently issued and outstanding common shares. Each unit consists of one common share and one warrant, exercisable at $0.45 for 24 months following closing, subject to a 30-day accelerated expiry if Lorus’ shares trade at or above $0.90 for twenty consecutive days. The Company intends to seek an exemption from the TSX in respect of the requirement to hold a special meeting of shareholders to approve the private placement. Significant placees include Sprott Asset Management and Mr. Sheldon Inwentash (who controls Pinetree Capital Ltd.).
Hamilton Thorne Ltd. (TSXV: HTL) closed the first tranche of its previously announced non-brokered private placement of 4,006,668 ($0.1125) units for proceeds of US$450,000. Each unit is comprised of one common share and a (1-year, $0.16875) half warrant. Proceeds will be used to provide working capital to support its operations and future growth.
Amorfix Life Sciences Ltd. (TSX: AMF) closed a $1,034,000 non-brokered private placement of 2,585,000 ($0.40) units, each comprised of one common share and a (2-year, $0.80) warrant with a 20-day, $1.00 trigger. Proceeds will be used for R&D and for general corporate purposes. $56,320 in finder fees and 140,800 finder warrants will be paid in connection to the closing.
Quest PharmaTech Inc. (TSXV: QPT) closed a non-brokered private placement of 5,000,000 ($0.10) common shares to a South Korean resident who will own approximately 10.4% of the common shares of Quest. Proceeds will be used to finance its drug development program and general corporate purposes.
Licensing and Distribution Agreements
Amorfix Life Sciences Ltd. (TSX: AMF) signed an agreement granting an exclusive worldwide license for its preclinical Alzheimer’s disease diagnostic test, the Amorfix Aggregated Abeta Assay (the A4) to JSW Lifesciences GmbH, a contract research organization specializing in Alzheimer’s disease and other neurodegenerative disorders. Under the terms of the agreement, JSW will market and perform the A4 assay as a service in the area of preclinical Alzheimer’s disease studies. The agreement includes a commitment to minimum annual sales and Amorfix will receive a percentage of net sales.
Nuvo Research Inc. (TSX: NRI) and Paladin Labs Inc (TSX: PLB) announced that they have entered into a license and supply agreement granting Paladin exclusive Canadian rights to market and sell Synera®, a topical patch that combines lidocaine, tetracaine and heat. Under the terms of the agreement, Nuvo will receive a double digit royalty on net sales of Synera in Canada and will supply Synera to Paladin. In addition, Paladin has agreed to loan Nuvo $8.0 million in two equal tranches of $4.0 million each (the first drawn on closing and the second to be dawn on the achiecement of milestones). The loan bears interest of 15% and matures May 25, 2016 and is secured over the assets of Nuvo’s Pain Group.
ProMetic Life Sciences Inc. (TSX: PLI) received a $4.2 million follow-on purchase order pursuant to its ongoing long-term supply agreement entered into with a major global pharmaceutical company in 2009. The order relates to the purchase of a proprietary Mimetic Ligand™ affinity adsorbent developed and manufactured by ProMetic’s UK subsidiary, ProMetic Biosciences Ltd.
BioExx Specialty Proteins Ltd. (TSX: BXI) received a Commitment Letter from Romspen Investment Corporation for the provision of a $6,400,000 term debt facility. Proceeds of the Romspen loan will be used to pay out the Company’s existing debt facility with Farm Credit Canada, in the amount of approximately $4,000,000, with the balance to be used for working capital and general corporate purposes. The loan is a one-year term debt facility, with interest accruing at 12% during the term, and the principal amount and accrued interest due at maturity. Romspen has also been granted 10,000,000 share purchase warrants with a term of 5 years and an exercise price equal to $0.088.
Stellar Pharmaceuticals Inc. (OTC: SLXCF) closed the first of two tranches of a US$6.0 million term loan from Midcap Financial LLC. The US$3.5 million received as proceeds of the first tranche will be used to expand its sales force and its promotional activities to enhance the growth of its existing Canadian product line, prepare for the launch of the recently approved Cambia®, and advance pending business development initiatives. Midcap will receive 5-year warrants to purchase shares equal to 8% of the amount borrowed under the tranche divided by an exercise price based on the 20-day average closing price at the time of the draw.
Special thanks to Jennifer Ng for help with this Monday Biotech Deal Review!