The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monday Biotech Deal Review: August 13, 2012

Welcome to your Monday Biotech Deal Review for August 13, 2012.  Highlights from the previous two weeks include the announcement of an interim order for a plan of arrangement between QHR Technologies Inc. and Open EC Technologies and the announcement of a support agreement for the takeover of Life Bank by Insception Biosciences.  Read on to learn more.

Investments

Solegear Bioplastics Inc., announced it has secured Series A financing, led by Yaletown Venture Partners and joined by a number of leading angel investors.  Terms were not disclosed.

Functional Technologies Corp. (TSXV: FEB) announced that it has raised gross proceeds of $445,000 in an initial closing of the non-brokered private placement previously announced here. The funds were raised through the issuance of 2,225,000 units at a price of $0.20 per unit. Each unit is comprised of one common share and one share purchase warrant. Each warrant is exercisable at a price of $0.30 for a period of two years, subject to an accelerated exercise provision. The Company has paid cash fees totaling $26,000 and issued 130,000 share purchase warrants to finders in connection with the first tranche closing.

Calyx Bio-Ventures Inc. (TSXV: CYX) announced the closing of the first tranche of a brokered private placement previously announced here, of 1,110,000 units at a price of $0.25 per unit for total gross proceeds of $277,500 through an agent, Canaccord Genuity Corp. Each unit comprises one common share of the Company and one half of one common share purchase warrant. Each warrant is exercisable into one common share of the Company for a period of 24 months from closing at an exercise price of $0.40. The Company paid the agent a cash fee equal to 7% of the gross proceeds raised from the brokered private placement and issued warrants to the agent equal to 10% of the Units sold. Each agent warrant is exercisable into one common share of the Company for a period of 24 months at an exercise price of $0.40. In addition, the Company issued 37,000 units as a corporate finance fee to the agent.

QHR Technologies Inc. (TSXV: QHR) announced that Open EC Technologies Inc. (“OEC”) (TSXV:OCE) obtained an interim order providing for the calling and holding of the annual and special meeting of the shareholders of Open EC.  At the meeting, the shareholders of Open EC will be asked to approve an arrangement agreement between QHR and Open EC providing for the acquisition by QHR of all of the outstanding securities of Open EC such that Open EC will become a wholly-owned subsidiary of QHR.

SQI Diagnostics Inc. (TSXV: SQD) announced that it has received approval from the TSX Venture Exchange to extend the expiry of 1,140,000 outstanding common share purchase warrants the Company, which were issued in connection with the Company’s August 12, 2010 private placement financing. Each warrant, as amended, entitles the holder thereof to purchase one common share of the Company at any time until the close of business on August 12, 2012 at an exercise price of $5.00 per common shares. The Warrants will be amended, effective July 30, 2011, to extend the term of such Warrants to August 12, 2013. All other provisions of the Warrants will remain the same.

Miraculins Inc. (TSXV: MOM) announced that it will receive $130,000 in grant funding from the Manitoba Commercialization Support for Business (CSB) Program to support commercialization of its PreVu® Non-Invasive Skin Cholesterol Test. The Program provides financial assistance to cost share eligible arms-length third party expenses on a 50/50 basis. All assistance will be tied to mutually agreed upon milestones and financial assistance may be required to be paid back in full in the event that the company is sold, or relocates its Manitoba operations outside of the province during the life of the project.

M&A

Noveko International Inc. (TSX: EKO) announced that it has signed a Memorandum of Understanding with a French corporation that intends to acquire all the shares of S.A.S. E.C.M. (“ECM”).  The acquisition, if completed, will be made in consideration of a total amount of €4.3 million, of which €2 million are to be paid at the closing date of the transaction, €300,000 at the latest on December 31, 2012, €1 million at the latest on December 31, 2013, and €1 million at the latest on December 31, 2014. Closing of the transaction is scheduled to occur on or about October 1st, 2012.

Lifebank Corp. (TSXV: LBK) and Insception Biosciences Inc. announced that they have entered into a support agreement, pursuant to which Insception has agreed to offer to acquire all of the issued and outstanding common shares in the capital of Lifebank, by way of a take-over bid, for $0.48 per share in cash. Assuming no adjustment to the offer price and the exercise of all outstanding stock options, the offer price of $0.48 per share represents a value of $5,430,413 for Lifebank. Assuming an offer price of $0.48 per share, the offer represents a 500% premium based on Lifebank’s closing share price of $0.08 on the TSX Venture Exchange on August 9, 2012, and a premium of approximately 500% over the volume weighted average share price on the TSX-V for the 20 trading days ending August 9, 2012.

Licensing and Distribution Agreements

QHR Technologies Inc. (TSXV: QHR) announced that its EMR division will offer a direct connection to the entire comprehensive line of electronic vital sign devices from Welch Allyn.  The new AccuroEMR device integration will allow rapid electronic transfer of patient test results directly between the Welch Allyn’s digital vital devices and the AccuroEMR active patient history template—eliminating the need for manual data entry, saving several minutes per patient and minimizing the risk of transcription errors.

Cipher Pharmaceuticals Inc. (TSX: DND) announced it has reached agreement with Institut Biochimique SA (“IBSA”) to obtain exclusive license and distribution rights in Canada to market the Betesil® Patch, a novel, patent-protected, self-adhesive medicated plaster containing 0.1% betamethasone valerate, for the treatment of inflammatory skin conditions such as plaque psoriasis.  The product is currently marketed in several European countries. Cipher intends to initiate the regulatory review process for the Betesil® Patch in Canada in Q4 of this year.  The financial terms of the agreement include an upfront fee of $100,000 CAD, followed by other regulatory related milestone payments.

Medifocus, Inc. (TSXV: MFS) announced that it has obtained a newly allowed patent and an extensive intellectual property portfolio of 50 patents as part of the recently announced asset purchase of Prolieve® from Boston Scientific for the treatment of Benign Prostatic Hyperplasia. The patent, titled, “Device and method for treatment of tissue adjacent a bodily conduit by thermocompression,” was granted on July 17, 2012 by the United States Patent and Trademark Office.

ProMetic Life Sciences Inc. (TSX: PLI) announced the formation of an affiliate biopharmaceutical company, NantPro BioSciences, LLC, with NantPharma, LLC to develop and commercialize a plasma-derived biopharmaceutical product for the US market. The newly formed US based company has entered into exclusive development, licensing and manufacturing agreements with ProMetic. Under these agreements, ProMetic has granted NantPro rights to its Plasma Protein Purification System (“PPPS™”) and Prion Reduction technologies for the exclusive development and commercialization of a plasma-derived biopharmaceutical product for the US market. The agreements provide ProMetic with grant back rights to the biopharmaceutical product for markets outside the US, subject to payment of royalties by ProMetic to NantPro arising from ProMetic sales outside the US. NantPharma has made an initial contribution of US $2.5 million to NantPro, which in turn paid all of these funds to ProMetic under the various agreements for NantPro to access the technology rights from ProMetic.

PharmaGap Inc. (TSXV: GAP) announced that shareholders approved the proposed license of its lead cancer drug program to Clinical Value Corporation (“CVC”).  The key elements of the Transaction are:1)      PharmaGap will receive 50% of the first $100 million of sale or licensing revenues of the drug after recovery by CVC of its initial investment and equivalent priority, and 1/3 of sale or licensing revenues above $100 million;  CVC will assume all costs for final pre-clinical development and protection of intellectual property for the lead cancer drug program;  monthly cash payment will be made by CVC to PharmaGap to support development of PharmaGap pipeline products; and accounts payable and related obligations of PharmaGap incurred in pre-clinical development are assumed by CVC.

Other Commercial Developments

Aeterna Zentaris Inc. (TSX: AEZ) announced that the United States Patent and Trademark Office has granted a patent for the use of its oral ghrelin agonist, AEZS-130 (EP1572) as a diagnostic test for adult growth hormone deficiency (AGHD). The patent (US 8,192,719 B2) became effective as of June 5, 2012, and will expire on October 12, 2027. The corresponding composition of matter patent (US 6,861,409 B2), filed on June 13, 2001 and granted on March 1, 2005, will expire on August 1, 2022, with the possibility of a patent term extension of up to 5 years.

Theratechnologies Inc. (TSX: TH) announced that it received a letter from The NASDAQ Stock Market LLC (NASDAQ) on August 7, 2012 notifying Theratechnologies that, for the last 30 consecutive business days, the bid price of its common shares had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements set forth in NASDAQ Listing Rule 5450(a)(1). Theratechnologies has 180 calendar days, or until February 4, 2013, to regain compliance with the minimum bid price requirement. Theratechnologies intends to monitor the bid price for its common shares between now and February 4, 2013, and will assess all its available options under the circumstances during this period.

Cynapsus Therapeutics Inc. (TSXV: CTH) announced that it has been awarded a grant of USD$947,925 from The Michael J. Fox Foundation for Parkinson’s Research to support clinical studies to develop APL-130277, a sublingual (oral) thin film strip reformulation of apomorphine. APL-130277 is potentially the only oral formulation of Apomorphine, and as such will provide patients with a convenient and more tolerable alternative to multiple daily injections.

Angiotech Pharmaceuticals, Inc. (TSX: ANP) announced the expiration of the offer by its subsidiary, Angiotech Pharmaceuticals (U.S.), Inc. to exchange up to $225 million aggregate principal amount of Angiotech’s Senior Floating Rate Notes due 2013 for new 9% Senior Notes due 2016 to be issued by Angiotech U.S, as previously announced here.  The Offer expired at 11:59 p.m. New York City time, on August 9, 2012.  A total of $255,532,000 aggregate principal amount of Existing Notes were validly tendered.

Osta Biotechnologies Inc. (TSXV: OBI) announced that the TSX Venture Exchange has transferred its listing to the NEX board of the Exchange (the “NEX”) effective as of the opening of trading on Friday, August 3, 2012. The Corporation’s share symbol will remain OBI and the common shares will remain suspended.  The Corporation continues to review and consider several business opportunities and its transfer to the NEX will not materially impact this strategy.

Special thanks to Jennifer Ng for help with this week’s Monday Biotech Deal Review!

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