Welcome to your Monday Biotech Deal Review for Monday July 30, 2012. Highlights from the previous weeks include the closing of the $13 million public offering by Trimel Pharmaceuticals and $7.5 million loan, as well as the M&A activity involving Functional Technologies Inc. and Medifocus Inc. Read on to learn more.
Nuvo Research Inc. (TSX: NRI) announced that the Development Bank of Saxony in Germany has agreed to provide Nuvo with up to €4.4 million of funding for the development of its reformulated version of WF10 (Reformulated WF10). The funding will take the form of a non-repayable reimbursement of specific development monies expended by Nuvo until July 2014.
Cynapsus Therapeutics Inc. (TSXV: CTH) announced that it has closed a non-brokered private placement. Cynapsus issued an aggregate of 2,000,000 units at a price of $0.05 per unit raising gross proceeds of $100,000. Each unit consists of one common and one share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of $0.10 for a period ending on the earlier of 5 years from the closing date, and a period ending 20 days after prior written notice from Cynapsus that the closing price of its common shares has been at least $0.15 per share for 20 consecutive trading days. Certain insiders of Cynapsus including the President and Chief Executive Officer, Chief Scientific Officer, Chief Operating Officer/Chief Financial Officer participated on the same terms in the private placement for an aggregate of 5% of the issued Units.
Trimel Pharmaceuticals Corporation (TSX: TRL) announced that it has closed its previously announced public offering, for aggregate gross proceeds of $13,245,750. In connection with the offering, the Company issued 7,569,000 units at a price of $1.75 per unit. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share at an exercise price of $2.50 until January 17, 2015. The offering was completed by a syndicate of underwriters led by RBC Dominion Securities Inc. and including GMP Securities L.P.
Functional Technologies Corp. (TSXV: FEB) announced that it intends to undertake a non-brokered private placement to raise gross proceeds of up to $1.0 million by the issuance of 5.0 million units at a price of $0.20 per unit. Each unit will consist of one common share and common share purchase warrant. Each share purchase warrant will entitle the holder to acquire one common share at a price of $0.30 for a period of 24 months. The share purchase warrants will expire 30 days following the Company’s written notice of early expiry, which notice may be given if the closing price of the Company’s common shares is $0.60 or higher for at least 10 consecutive trading days. A working capital bridge loan of $250,000 with the ability to request a second draw down of the same amount has also been arranged. The Company will issue to the lender 122,549 common shares which will be subject to a hold period expiring on November 13, 2012. The loan matures in one year and bears interest at the rate of 18% per annum during the first year and 22% thereafter. The loan agreement provides for the grant of security over certain assets of the Company and the payment of a structuring fee to the lender of 4% on the amount of the funds advanced. Christopher Morris, an executive officer of the Company, is the owner of the general partner of the lender and is also a limited partner. The bridge loan will help provide the Company the additional time required to close the equity round of financing while minimizing further dilution with what it expects to be a short term interest-bearing debt instrument.
Imaging Dynamics Company Ltd. (TSX: IDL) announced that it has closed the non-brokered private placement of 450,000,000 common shares at a price of $0.005 per share for gross proceeds of $2,250,000, previously announced here. The common shares issued in connection with the private placement will be subject to a four-month hold period from the date of issuance. After this private placement, the Company currently has 608,441,782 issued and outstanding common shares.
Medifocus Inc. (TSXV: MFS) has announced a non-brokered private placement of up to 26,666,666 units at a price of $0.15 per unit for anticipated gross proceeds of up to $4,000,000. Each unit is comprised of one common share and a series C common share purchase warrant, which will entitle 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 July 8, 2014, the daily volume weighted average trading price of the shares exceeds $0.75 for at least 10 consecutive trading days, Medifocus may, within 30 days of such occurrence, give an expiry acceleration notice and the warrants will, unless exercised, expire on the 30th day after the expiry acceleration notice is given.
iCo Therapeutics Inc. (TSXV: ICO) announced that it has closed its prospectus offering of 5,675,332 units at a price of $0.45 per unit for aggregate gross proceeds of $2,553,899.40, previously announced here. Each unit is comprised of one common share and one common share purchase warrant, which entitles the holder to acquire one common share at a price of $0.60 per share for a period of 2 years following the closing of the offering.medif
M & A
Medifocus Inc. (TSXV: MFS) announced that it has completed the purchase of all Prolieve® business assets from Boston Scientific Corporation (NYSE: BSX). Prolieve was originally developed and commercialized by the current Medifocus management, product development, clinical and regulatory teams. The assets acquired by Medifocus include all Prolieve hardware inventories, Rocky Mountain Mobile Services and its mobile distribution assets, as well as the intellectual property portfolio associated with the Prolieve technology.
Functional Technologies Corp. (TSXV: FEB) has signed agreements relating to the Company’s sale of non-core assets and technologies through the sale of its subsidiaries, Phyterra Bio Inc. (“PBI”) and Maritime Pulse Drying Inc. (“MPD”), as well as certain assets of Phyterra Yeast Inc., to a company owned by Garth Greenham and Michael Horne, who resigned from their positions as executive officers and directors of the Company effective June 30, 2012. The sale transactions will close in two stages, the first to be held following receipt of requisite consents and releases and the second to be held on October 31, 2012. In consideration, the purchaser will assume financial obligations totalling approximately $3.1 million and will issue to the Company a royalty note in the amount of $1.0 million securing the payment of a royalty over future revenues of PBI and MPD. The Company has agreed to make support payments amounting to a long term unsecured note to the purchaser in the maximum aggregate amount of $1.2 million.
BIOREM Inc. (TSXV: BRM) has announced the initial closing of its private placement of 1,030 Units for gross proceeds of $1,030,000. Additional closings of the private placement of up to 1,500 units may occur up until August 13, 2012. Each unit consists 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 4,545 common share purchase warrants. The debentures are convertible into common shares of the Company at a price of $0.11. Each warrant entitles the holder to purchase one common share at a price of $0.11 per share for a period of two years from issuance. Insiders have subscribed for greater than 25% of the private placement. In addition to the initial closing of the private placement, Biorem has received an additional $500,000 advance from its existing senior lender and has amended the terms of its secured debenture originally issued on October 31, 2008 in respect of the additional advance of funds.
Trimel Pharmaceuticals Corporation (TSX: TRL) announced that it has entered into a loan and security agreement with GE Capital, Healthcare Financial Services (“GE Capital”) pursuant to which GE Capital will advance U.S.$7,500,000 to the Corporation. According to the Loan Agreement, the loan will accrue interest at 10.75% per year and is repayable in scheduled installments through to July 1, 2015. In connection with the transaction, the lenders under the Loan Agreement have been issued warrants exercisable for an aggregate of 154,916 common shares of the Corporation and certain brokers have been issued warrants exercisable for an aggregate of 51,639 common shares of the Corporation. The warrants are exercisable for five years at an exercise price calculated using the volume weighted average trading price of the Corporation’s common shares on the Toronto Stock Exchange for the period of five days ending immediately prior to the completion of the Loan.
Licensing and Distribution Agreements
Accuristix announced it has been awarded a long term contract by Hoffman-La Roche Limited as its supply chain partner to handle the storage and distribution of their commercial pharmaceuticals, clinical trials, samples and promotional literature.
Sunshine Biopharma Inc. (OTCBB: SBFM) announced that it has engaged Beta Pharma Canada Inc. to manufacture an initial batch of Adva-27a and provide synthesis parameters for future scale-up and large scale manufacturing of the drug. Beta Pharma Canada Inc., headquartered in Montreal, is a Canadian small-molecule drug discovery and manufacturing company specializing in design, synthesis and process development of novel pharmaceutical compounds. Adva-27a is Sunshine Biopharma’s lead anti-cancer compound which has proven effective at killing Multidrug Resistant Breast Cancer cells (MCF-7/MDR) and Small-Cell Lung Cancer cells (H69AR).
Nuvo Research Inc. (TSX: NRI) announced that Galderma S.A. has received its first three Pliaglis marketing licenses from E.U. countries. These licenses entitle Nuvo to receive a total of US$6.0 million of milestone payments from its worldwide Pliaglis marketing partner, Galderma. The milestone payments are due on the earlier of the launch of Pliaglis in the approved countries or 6 months from the date of marketing approval. The payments are expected in December 2012 (US$5.0 million) and January 2013 (US$1.0 million). Galderma has advised Nuvo that it expects to launch Pliaglis in the E.U. and other territories in the first half of 2013.
Miraculins Inc. (TSXV: MOM) announced that Alere Inc. has secured its final six-month exclusive option period on Miraculins’ preeclampsia technology and will provide Miraculins a non-refundable fee in accordance with the terms of the Collaborative Research and Option Agreement between the parties. Alere originally secured an exclusive option to license and commercialize any Miraculins’ biomarkers with the execution of the Agreement on January 11, 2010. In accordance with the terms of that agreement, the exclusive option has been maintained at regular intervals with the final 6 month exclusive option period ending on January 10, 2013.
Pacgen Life Science Corporation (TSXV: PBS) announced that Pacgen Inc., the company’s wholly owned subsidiary, has signed an exclusive distribution agreement with Arise Biotech Corporation to distribute Arise’s automated pipetting systems and electronic pipettes in the United States.
Cangene Corporation (TSX: CNJ) has entered into an agreement with Camurus AB under which Cangene bioPharma Inc., a wholly-owned subsidiary of Cangene, will have exclusive rights to commercialize episil® in the United States for the management and relief of pain associated with oral lesions. Cangene bioPharma plans to launch episil® in the United States in October 2012. Financial terms fo the agreement were not disclosed.
Other Commercial Developments
Nuvo Research Inc. (TSX: NRI) announced that the United States Patent Office has granted the reinstatement of Patent No. 6,465,709 related to Synera® Patch. The patent expiry date is July 7, 2020.
Hamilton Thorne Ltd. (TSXV: HTL) announced that it has received a notice of Intention to Grant a European Patent on the “Modular Objective Assembly” utlized in the Company’s LYKOS® and XYRCOS™ lasers. Upon final approval, the patent can be officially filed in over 30 European countries.
CardioComm Solutions, Inc. (TSXV :EKG) announced that an aggregate of 1,450,000 incentive stock options have been granted to management and directors of the Company. The options are exercisable at $0.60 per share for five years from the date of grant, vest equally over 18 months at the end of each three month period from the date of grant and are subject to a four month hold period.
biOasis Technologies Inc. (TSXV: BTI) announced that it has granted options to its officers, employees, consultants and members of the board of directors. A total of 1,647,000 options have been granted in accordance with the approved stock option plan, effective at the close of business on July 19, 2012 at a price of $1.28 per share expiring on July 19, 2017.
Helix BioPharma Corp. (TSX: HBP) announced that it will file a Form 15F with the United States Securities and Exchange Commission with the intention of terminating registration of its common shares and terminating its reporting obligations for all of its registered securities. Helix has voluntarily delisted its common shares from the NYSE MKT which became effective on July 19, 2012. On July 18, 2012, Helix, removed from registration all unsold securities. Helix’s common shares will continue to trade on the Toronto Stock Exchange and the company will continue to file the necessary reports with Canadian Securities Administrators.
Cangene Corporation (TSX: CNJ) has announced the cancellation of its product development program for Immune Globulin Intravenous (IGIV) following a strategic review. The company based its decision on a determination that the program no longer fit with its refocused, specialty biopharmaceutical strategy and a substantial shift in the competitive environment since the start of the program.
Kane Biotech Inc. (TSXV: KNE) has granted an aggregate of 1,032,500 stock options at an exercise price of $0.15 per common share to the management and employees of the company. The options are set to expire five years from the date of the grant. In addition, the company has increased the retainer fee to $7,500 per month for the remainder of the service agreement with Pure Advertising and Marketing Inc. for investor relations services in 2012. The services agreement for investor relations is a 12 month renewable term where either party may terminate the agreement at any time on 6 months prior written notice. Pure Advertising and Marketing Inc. has no direct or indirect interest in the company or its securities.
Special thanks to Jennifer Ng for help with this week’s Monday Biotech Deal Review!