The Cross-Border Biotech Blog

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

Monday Deal Review: November,5 2012

Welcome to your Monday Biotech Deal Review for November 5, 2012.  The past week saw a flurry of activity by Patheon, as it seeks to fund the acquisition of Banner Pharmacaps from Netherlands based VION.  Functional Therapeutics, on the other hand, has indicated that their previously announced spin-out agreement has been terminated.  Check out the link below for more detail on these stories, as well as the other major biotech stories of the past week.

M & Eh

Patheon Inc. (TSX: PTI), has announced that it has entered into a definitive agreement with VION N.V., a global manufacturer of foodstuffs and ingredients based in the Netherlands, to acquire Banner Pharmacaps, a specialty pharmaceutical business dedicated to the research, development and manufacturing of unique gelatin-based dosage forms. In connection with the funding of the acquisition, Patheon has obtained committed financing to repurchase its existing senior secured notes and repay any borrowings outstanding under its existing revolving credit facility, pay fees and expenses associated with the transactions, and for general corporate purposes. Patheon has received commitments from Morgan Stanley, UBS, Credit Suisse and KeyBank to provide, in the aggregate, U.S. $650 million senior secured facilities, comprised of a U.S. $565 million term loan facility and a U.S.$85 million revolving facility. In addition, Patheon has received an equity financing commitment from JLL Partners Fund V, L.P., an affiliate of Patheon’s majority shareholder, to contribute equity financing, without any fees or charges, by participating in a rights offering or private placement of Patheon’s restricted voting shares, in an amount up to U.S. $30 million, less amounts invested in Patheon by other shareholders.  Under any such rights offering all shareholders would be offered a pro rata right, including any oversubscription privilege, to purchase restricted voting shares of Patheon.

Investment

Microbix Biosystems Inc. (TSX: MBX) has announced the closing of a private placement financing resulting in the issuance of 1,050,000 Units at a price of $0.30 per unit for gross proceeds of $315,000 to be used for operating capital.  Each unit consists of one common share of Microbix and one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at an exercise price of $0.33 for 24 months. Two insiders of the company participated in the financing by purchasing an aggregate of 250,000 units.  The financing was non-brokered. A total of 192,000 finder’s warrants were issued, and the company paid a cash commission of $2,100 in connection with the private placement. Each finder’s warrant entitles the holder to purchase one unit at a price of $0.33 for a period of 24 months.

Covalon Technologies Ltd. (TSXV: COV) has announced the closing of a non-brokered private placement comprised of 9.55 million units at a price of $0.052 per unit for gross proceeds of $496,600. Each unit is comprised of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to acquire an additional common share at a price of $0.10 per share for a period of five years from the closing date. All securities issued pursuant to the offering will be subject to a hold period expiring February 27, 2013.  Directors and officers of Covalon participated in the non-brokered private placement for an aggregate of 1.8 million units. Proceeds of the private placement will be used by Covalon to develop and commercialize new wound care products, expand international distribution channels and for general working capital.

Alethia Biotherapeutics Inc., a privately held biotechnology company focusing on the development of therapeutic monoclonal antibodies has announced that it has closed a new financing. Alethia will use the proceeds to fund primarily its lead program. The financing included participation of current major investors comprising AgeChem Venture Fund, BDC Venture Capital and GO Capital in addition to a long-term partner and shareholder of the company, Cellscript of Wisconsin.

EnWave Corporation (TSXV:ENW) has announced that it has completed and closed the acquisition of approximately 86.5% interest in Hans Binder Maschinenbau GmbH, in exchange of an investment of 2,000,000 Euro into the capital of Binder. The company has granted an aggregate of 625,000 stock options to the managing directors and to a shareholder of Binder. Each stock option entitles its holder to purchase one common share of the company at an exercise price of $1.32 per common share until October 26, 2017.

MedMira Inc. (TSXV: MIR) a developer of rapid diagnostic technology and solutions, has announced that it has completed debt settlement arrangements with its debt holders and is no longer in a default position on any of its loans. Building on a debt reduction of $11,834,592 completed in June 2012, the Company paid an additional $312,992 to eliminate a further $1,021,503 in debt.

Medicure Inc. (TSX-V:MPH) has announced that the TSX Venture Exchange has approved the consolidation of the company’s issued and outstanding common shares on the basis of one post-consolidation common share for every fifteen pre-consolidation common shares and the company has proceeded with the consolidation. Effective at the opening of the market on November 2, 2012, Medicure’s shares will commence trading on the Exchange on a consolidated basis under the new CUSIP number 58469E408. The company’s name and trading symbol will not change as a result of the consolidation. The Company will have approximately 12,196,506 common shares issued and outstanding as a result of the consolidation.

Commercial Agreements

Functional Technologies Corp. (TSXV:FEB) has reported the termination of the spin-out agreement announced on July 19, 2012 regarding the proposed sale of Phyterra Bio Inc. and Maritime Pulse Drying Inc., as well as certain assets of Phyterra Yeast Inc., due to certain conditions precedent, including government agency approval, not being satisfied or waived. The company is reviewing alternative strategies regarding the non-core assets that were the subject of the spin-out agreement in furtherance of streamlining its operations and strategic focus.

Nordion Inc. (TSX: NDN) has announced that it has been granted special permission by The Open Joint Stock Company “Isotope”, the authorized subsidiary of Russia’s State Atomic Energy Corporation “Rosatom”, to enter into a negotiation directly with the Research Institute of Atomic Reactors (RIAR) for supply of Molybdenum-99 (Mo-99). Nordion and Isotope have jointly agreed that the current Mo-99 supply agreement structure was no longer appropriate and have terminated their Mo-99 supply agreement effective Oct. 26, 2012. The 2010 framework agreement with Isotope, to explore and define areas of collaboration for the supply, marketing and sale of isotopes produced in Russia is expected to remain in effect.

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