Welcome to your Monday Biotech Deal Review for June 18, 2012. Highlights from the previous week include the $10 million subscription receipt financing by Allon Therapeutics, the elimination of $11.8 million in debt by MedMira and the syndication of $600 million in debt by Valeant under its existing senior secured credit facilities. Read on to learn more.
Allon Therapeutics Inc. (TSX: NPC) announced shareholder approval of the $10 million brokered private placement equity offering previously announced. The approval triggers the conversion of the subscription receipts sold as part of the financing making the full $10 million raised available to the Company for development of its lead product, davunetide.
Medifocus Inc. (TSXV: MFS) announced completion of the first tranche of its private placement. The Company issued 18,367,253 units at a price of $0.15 per unit for gross proceeds of $2,755,088. Each unit is comprised of one common share and one series B common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.20 for a period of 24 months following the completion of the offering. If, at any time prior to April 26, 2014, the daily volume weighted average trading price of common shares on the TSXV exceeds $0.75 for at least 10 consecutive trading days, Medifocus may, within 30 days of such occurrence, give an expiry acceleration notice of holder of warrants. If it does so, the warrants will, unless exercised, expire on the 30th day after the expiry acceleration notice is given.
Lorus Therapeutics Inc. (TSX: LOR) announced the completion of its previously announced private placement of 20,625,000 unit at a subscription price of $0.32 per unit, with each unit consisting of one common share and one common share purchase warrant for gross proceeds to Lorus of $6,600,000. PowerOne Capital Markets Limited acted as a finder in the financing and were paid a cash finder’s fee equal to 6% of the gross proceeds of the private placement and were issued 1,237,500 finder’s warrants at an exercise price of $0.32 each.
Innovotech Inc. (TSXV: IOT) announced completion of a non-brokered private placement of 1,630,194 units at a price of $0.32 per unit for gross proceeds of approximately $521,660. Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.40 for a period of three years, provided that if the trading volume of the common shares is equal to or exceeds 100,000 common shares in any given thirty (30) consecutive days prior to the expiration date of the warrants (the “acceleration period”) and on each day the shares trade the closing price is $0.60 per common share or greater, then the warrant shall automatically accelerate to expire fourteen days following the last day of the acceleration period.
MedMira Inc. (TSXV: MIR) eliminated $11.8 million in debt through a debt holder settlement plan, representing a nearly 60% reduction in the Company’s current liabilities associated with promissory notes, long-term debt, and convertible debentures. To achieve this, MedMira paid $1,806,481, through various compromise and negotiated debt holder settlements. The net impact of this gain is $10,028,111 or $0.026 per share. The Company’s interest expense associated with these debts will be reduced by more than half a million dollars per quarter.
Valeant Pharmaceuticals International, Inc. (TSX: VRX) completed the syndication of incremental term loans. The successful syndication of $600 million of incremental term loans under its existing senior secured credit facilities are will be used to fund repayment of amounts outstanding under its existing $275 million revolving facility and for general corporate purposes, including acquisitions. The incremental term loans will mature in 2019.
Bradmer Pharmaceuticals Inc. (TSXV: BMR.H) has announced the termination of a proposed business combination with Epic Production Technologies International Inc. The proposed transaction was initially announced on December 21, 2011 and trading of the common shares of Bradmer had 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 or about June 14, 2012.
QHR Technologies Inc. (TSXV: QHR) has entered into a letter of agreement to acquire Open EC Technologies Inc. (OEC) pursuant to which QHR proposes to acquire all of the issued and outstanding securities of OEC in a business combination effected by way of a Plan of Arrangement. In the proposed arrangement, holders of OEC common shares can elect to exchange their OEC shares for cash at a price of $0.04 per OEC share, a premium of approximately 20% to OEC’s most recent 20-day weighted average share price. The cash component of the transaction could range from $800,000 to $1,500,000. The transaction is expected to be completed by October 31, 2012 following all necessary approvals. The transaction should add approximately $3 million in recurring revenue to QHR’s base annual business once the transition takes effect.
Other Commercial Developments
Helix BioPharma Corp. (TSX: HBP) announced various actions taken by its new Board of Directors. The Board of Directors of Helix was reconstituted on March 16, 2012 by the resignation and replacement of four of the six members of the five persons nominated by a group of concerned shareholders who led a dissident proxy solicitation at the Company’s AGM held on January 30, 2012.
Special thanks to Jennifer Ng for help with this week’s Monday Biotech Deal Review!