Welcome to your Monday Biotech Deal Review for November 26, 2012. This past week saw Valeant continue their aggressive stock repurchase program. Valeant plans to repurchase up to $1.5 billion worth of its own stock, senior notes or debt. Further, we saw Paladin expand its potential sales reach with the purchase of a controlling stake in Mexico-based Ativa Pharma. Get the full breakdown of these and many more of the past week’s major biotech stories.
Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) has announced that its board of directors has authorized a new securities repurchase program. Under the securities repurchase program, which commenced November 15, 2012, the company may make purchases of up to $1.5 billion of its senior notes, common shares and/or other debt or shares that may be issued prior to the completion of the program. The securities repurchase pogram will replace the cmpany’s former securities repurchase program, which expired on November 7, 2012. Valeant’s board of directors also approved a sub-limit for the repurchase of Valeant common shares of the greater of 10% of the company’s public float or 5% of the company’s issued and outstanding common shares, in each case calculated as of the date of the commencement of the repurchase program. On the date of the commencement of the program, the company had approximately 303,442,994 common shares outstanding. Valeant intends to initially make purchases of up to 15,172,149 common shares on the open market through the facilities of the New York Stock Exchange (NYSE), representing approximately 5% of the company’s issued and outstanding common shares.
MethylGene Inc. (TSX:MYG) has announced that it has completed its previously announced private placement (covered by us here) of 179,690,970 units at a subscription price per unit of Cdn.$0.145 (the “Subscription Price”), each unit consisting of one common share and thirty one-hundredths (0.30) of a common share purchase warrant, exercisable until November 19, 2017 at an exercise price of Cdn.$0.174 (being 120% of the Subscription Price), for gross proceeds to MethylGene of approximately Cdn.$26.1 million.
Patheon Inc. (TSX: PTI) has announced that it will launch a U.S. $30 million transferable rights offering. Under the terms of the rights offering, all record holders of the company’s restricted voting shares as of November 27, 2012 will receive, at no charge, one transferable subscription right for each restricted voting share held as of the record date. For every 13.75 subscription rights held, rights holders will be entitled to subscribe for one whole restricted voting share at a price of $3.19 per whole share, payable in either U.S. or Canadian dollars at such holder’s choice, but subject to any additional restrictions any broker, dealer, bank or other nominee may impose. Rights holders who exercise their subscription rights in full will have the opportunity to over-subscribe for additional restricted voting shares to the extent shares are available, subject to certain limitations.
Allon Therapeutics (TSX: NPC) has filed a preliminary short form base shelf prospectus with the securities commissions in each province and territory of Canada (other than Quebec). The shelf prospectus, when made final, will enable the company to offer up to $50 million of common shares, common share purchase warrants, units consisting of common shares and whole or partial common share purchase warrants, preferred shares, debt securities and/or subscription receipts entitling the holder to acquire common shares, warrants, units or preferred shares during the 25-month period that the shelf prospectus, including any amendments thereto, remains effective.
M & Eh
Paladin Labs Inc. (TSX: PLB) has announced that it has initiated the launch of commercial operations in Latin America with an agreement to acquire a controlling stake in Ativa Pharma S.A, a start-up specialty pharmaceutical company headquartered in Guadalajara, Mexico. Paladin’s acquisition of a controlling stake in Ativa is subject to the clearance of certain closing conditions. The benefit of this acquisition to Paladin is the onboarding of an established infrastructure and network that provides the necessary licenses and permits to import, distribute and promote pharmaceuticals in the Mexican market, together with an existing team with commercial and regulatory expertise based in Mexico. Following the closing of this transaction, Ativa will change its name to incorporate the Paladin name and branding.
Commercial, Licensing and Other Agreements
Opsens Inc. (TSXV: OPS) is has announced its first major agreement granting distribution and other rights for its OptoWire and OptoMonitor, Opsens’ products for measuring Fractional Flow Reserve (“FFR”). FFR is an index of the functional severity of a coronary stenosis that is calculated from pressure measurements taken before and after a narrowing of the arteries during coronography. Under the terms of the agreement with a Japanese-based medical company, Opsens will receive US$3 M for the distribution rights for its FFR products for Japan, Korea and Taiwan, which is comprised of US$2 M at signing, US$1 M once Opsens gets regulatory approval for its FFR devices in Japan and US$2 M in convertible debenture, at signing.
BioExx Specialty Proteins Ltd. (TSX: BXI) has announced that it has closed its previously announced convertible debenture offering for gross proceeds of $2,925,000. Subscribers of the debentures are provided with subordinated security over the personal property of the company and its subsidiary, BioExx Proteins of Saskatoon Inc. The debentures bear interest at a rate of 12% per annum, and will be convertible into units at a conversion price of $0.10 per unit, with each unit being comprised of one common share in the capital of the company and one half of one share purchase warrant, with each whole warrant being exercisable into one common share, and having a three year term and an exercise price of $0.15 per share. The debentures mature 3 years from their date of issuance and may be repaid by the Company at any time following the first twelve months of their issuance, subject to the conversion rights of debentureholders.