Welcome to your Monday Biotech Deal Review for September 3, 2012. A slow week was capped by today’s announcement that Valeant Pharmaceuticals International Inc. will acquire dermatology specialist Medicis Pharmaceuticals Corporation. The deal, which pushes Valeant’s total 2012 acquisition spending to over $3.5 billion, continues Valeant CEO Michael Pearson’s strategy of “using M&A as a surrogate for R&D.” Read on to learn more.
M & Eh
Valeant Pharmaceuticals International, Inc. (TSX: VRX) and Medicis Pharmaceutical Corporation (NYSE: MRX) announced that they have entered into a definitive agreement under which Valeant will acquire all of the outstanding common stock of Medicis for $44.00 per share in cash. The transaction, which values Medicis’ common stock at approximately $2.6 billion, was unanimously approved by the Boards of Directors of both companies. The $44.00 per share price represents a 39% premium to Medicis’ closing share price on Friday, August 31, 2012, the last trading day prior to announcement, and a 31% premium to the three-month average trading price. The transaction is expected to close in the first half of 2013.
Legumex Walker Inc. (TSX: LWP) today announced it has entered into a letter of intent with Keystone Grain Ltd., a Manitoba-based processor and marketer of sunflowers, flax, specialty crops and organic commodities, under which Legumex Walker will purchase all of the outstanding shares of Keystone. Pending the completion of the acquisition, the two companies have agreed to coordinate the sourcing of feedstock and selling of products.
Biosign Technologies Inc. (TSXV: BIO) intends to complete a non-brokered private placement of up to 5,000,000 units of Biosign at $0.10 per Unit for gross proceeds of up to $500,000. Each Unit will consist of one common share of Biosign and one-half of one common share purchase warrant, with each full warrant exercisable for one common share of Biosign at an exercise price of $0.15 per share for a period of 12 months from closing. The Warrants shall have an acceleration clause such that in the event that the closing price of the Biosign common shares on the TSXV is in excess of $0.20 for a period of five consecutive trading days, then Biosign will have the right to accelerate the expiry date to 14 days following the date of notice thereof given to the holders. The proceeds of the private placement will be used for restructuring purposes and to execute the new Company’s business plan. Shareholders of Biosign will be afforded the opportunity to participate in the offering on a pro rata basis.
Lignol Energy Corporation (TSXV: LEC), a leading technology company in the advanced biofuels and renewable chemicals sector, today announced that it has completed a non-brokered private placement of 30,750,000 common shares at a price of $0.08 per common share to raise gross proceeds of $2.46 million, and has acquired from Wasabi Energy Limited (ASX/AIM: WAS) 275,000,000 ordinary shares of Australian Renewable Fuels Limited (ASX: ARW) (“ARW”), for a total purchase price of CAD$4,265,770. Consideration for the share acquisition of ARW shares from Wasabi is comprised of $500,000 in cash, 19 million LEC common shares issued at $0.08 per share for $1,520,000 and a 10-month secured convertible debenture for $2,245,770 convertible into LEC common shares at $0.15 per share.
Lorus Therapeutics Inc. (TSX:LOR) has announced that the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) has awarded funding to Lorus to support development of IL-17E for cancer therapy. The $50,000 non-repayable contribution from NRC-IRAP will be used for a pilot development project to manufacture IL-17E, which will be carried out by researchers at the National Research Council.
biOasis Technologies Inc. (TSXV:BTI) has announced that it has granted 328,000 incentive stock options to officers and directors of the Company exercisable at $1.28 per share expiring on August 28, 2017.
Resverlogix Corp. (TSX: RVX) has announced that it has entered into a $25 million Loan Agreement with Citibank, N.A. Resverlogix received the $25 million upon closing of the loan. The loan is repayable upon maturity on August 24, 2017 and may be repaid in whole or in part after August 23, 2013 without penalty. Interest on the loan is payable annually in arrears at 4.5% per annum for the first year of the loan and thereafter at a rate equal to Canadian one-year LIBOR swap rate plus 3.14%, to be reset annually. The loan is secured by an irrevocable $25 million Standby Letter of Credit arranged by Eastern Capital Limited which will be maintained until maturity of the loan. Resverlogix intends to use the net proceeds from the loan to fund research and development activities, general and administrative expenses, increased working capital and other general corporate purposes.