Welcome to your Monday Biotech Deal Review for February 4, 2013! This week saw significant activity in the sector generally On the M&A side, Valeant continued their ongoing acquisition strategy, buying the Russian Natur Product International, a primarily OTC private pharma company. Gilead’s acquisition of YM Biosciences took one step closer to completion as YM shareholders approved the statorily mandated vote to approve the plan of arrangement that will facilitate the arrangement. Court approval is now required as one of the final steps. Microbix was also involved in the week’s M&A activity, having sold its water for injections business to Irvine Scientific. The there was also significant investment activity this week, including Biosenta announcing a new private placement.
See detail on these and the the rest of the week’s major biotech stories by clicking through!
M & Eh
Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) has completed its acquisition of Natur Produkt International, JSC, a specialty pharmaceutical company in Russia, for approximately $163 million, plus adjustments for net debt and working capital. Natur Produkt has a significant presence in the over-the-counter (OTC) segment in several categories marketed under the umbrella brand, Natur Produkt. Key brands include AntiGrippin, a leading cough and cold remedy, Anti Angin, Sage and Eucaplyptus MA brand names, leading sore throat remedies.
YM BioSciences Inc. (NYSE Amex: YMI; TSX: YM) has announced that, at the special meeting of shareholders of the Company the YM shareholders approved the previously announced plan of arrangement involving the company, Gilead Sciences, Inc. (Nasdaq: GILD) and 3268218 Nova Scotia Limited, a wholly-owned subsidiary of Gilead. Under the Arrangement, the Nova Scotia Limited will acquire all of the issued and outstanding common shares of the company for cash consideration of U.S.$2.95 per common share. In addition, holders of warrants and options will each receive a cash payment equal to the difference between U.S.$2.95 and the exercise price of such warrants or options.
Microbix Biosystems Inc. (TSX: MBX) has sold its Water-for-Injection business to Irvine Scientific in California. The sale was constructed on an earn-out basis, though specific deal terms were not disclosed. The sale of this non-core asset is part of the Company’s strategy to focus on higher value-added Antigen products as well as key pipeline projects such as Kinlytic, which the Company is currently developing under license for Zydus Cadila. The sale has resulted in the redeployment of key resources to these important initiatives.
Biosign Technologies Inc. (TSXV: BIO) has announced a further amendment to the scheduled closing of a recent private placement (covered here). This amendment applies to the previously announced additional subscription of 6,000,000 units of the company at a purchase price of $0.05 per unit, which formed part of its previously announced private placement financing (see news releases issued on November 29, 2012 and December 21, 2012). Each unit is comprised of one common share and one common share purchase warrant. Each common share purchase warrant is exercisable for a two-year period at $0.05 per share during the first 12 months and $0.10 per share in the second twelve months. Under an amended closing schedule, the second 6,000,000 Unit private placement is scheduled to close as previously announced in multiple tranches between now and March 14th, 2013.
Biosenta Inc. (CNSX: ZRO) has announced a private placement of up to 4,000,000 units at a price of $0.15 per unit for gross proceeds of up to $600,000. Each unit consists of one Class A Share and one-half of one Class A Share purchase warrant. Each whole warrant will entitle the holder to purchase one additional Class A Share in the capital of the corporation at an exercise price of $0.20 per warrant share to the extent such warrant is exercised on or before the date that is 18 months from the closing date of the offering. The company may pay a finder’s fee consisting of 8% cash and warrants to acquire Class A Shares at $0.20 per Class A Share exercisable during the period up to 18 months following closing of the offering. The number of Warrants to be issued will equal to 8% of the number units sold in the offering. All securities issued will be subject to a four-month hold period. The proceeds will be used for working capital purposes and in furtherance of the company’s activities in connection with development of product lines, including development of its pilot plant and research facility Parry Sound, Ontario.
Critical Outcome Technologies Inc.(TSXV:COT) has completed a non-brokered private placement and issued 3,605,258 units at a price of $0.14 per unit for gross proceeds of $504,736. Each unit consists of one common share and one warrant of the Corporation. Each warrant is exercisable into one common share of the corporation at an exercise price of $0.26 per share for a period of 18 months from the date of issue. The corporation paid finders’ fees to arm’s length third parties in connection with the offering in the aggregate amount of $32,571 in cash and issued an aggregate of 232,652 compensation warrants. Each compensation warrant is exercisable into one common share of the corporation for a period of 18 months from the date of issue at an exercise price of $0.20 per share.
Medifocus Inc. (TSX-V:MFS) has agreed, subject to regulatory approval, to issue an aggregate of 1,090,000 common shares at a deemed price of $0.25 per common share to settle an aggregate of $272,500 of debt representing unpaid salary ($210,000) and amounts due to service providers ($62,500). All of the common shares issued in connection with the shares for debt transaction will subject to a 4-month and one day hold period from the date of issuance.
Critical Outcome Technologies Inc.(TSXV:COT has announced that it has received acceptance from the TSX Venture Exchange (TSXV) to extend the expiry term of 1,575,500 common share purchase warrants (Warrants) issued as part of its private placement in April and May 2010. Each Warrant entitled its holder to purchase one common share of the Company at an exercise price of $0.55 per share expiring on October 27, 2011 as to 1,519,070 Warrants, and on November 27, 2011 as to the remaining 56,430 Warrants.
Premier Diagnostic Health Services Inc. (CNSX:PDH) has withdrew its previously announced non-brokered private placement offering consisted of 2,500,000 units at a price of $0.20 per unit. Each unit consisted of two common shares of PDH valued at $0.10 per share and one purchase warrant to subscribe to a further share of PDH at $0.15 per share plus one bonus share. The company also announced today a new non-brokered private placement offering to accredited investors of 1000 units aggregate gross proceeds of up to $1,000,000. The 2013 convertible unit offering will consist of one $1,000 par value unsecured convertible debenture and 1000 common shares at an issue price of $.10 per share. The minimum subscription is 10 Units ($10,000). The debentures will mature on July 31, 2016 (if not otherwise converted) and bear interest at a rate of 8% per annum payable on July 31 and December 31 each year during the term or the earlier of conversion or maturity. The debentures are convertible into common shares of the company at any time prior to maturity, in whole or in part, at the option of the holder, at a conversion rate of $0.18 per share. The company shall have the right, on 30 days’ notice, to redeem all or any portion of the principal plus accrued Interest due on the debentures. Holders have the right to convert during the 30 day notice period.
Licensing and other Commercial Agreements
Bioniche Life Sciences Inc. (TSX: BNC) is terminating its exclusive global veterinary license agreement with Trophogen Inc. effective immediately. The agreement was originally entered into in June, 2010 to provide commercial access for Bioniche to a patented, proprietary superagonist hormone technology platform developed by Trophogen (originally licensed from the National Institutes of Health) in the veterinary field.
EnWave Corporation (TSXV:ENW it has signed an additional Collaboration Agreement with Milne Fruit Products Inc. to include the right to test and develop dried peas and corn using the company’s Radiant Energy Vacuum technology. If product and market testing is successful, Milne will initiate commercial production for these products, increasing the breadth of their Microdried® product line. Milne has the right to exercise an option to license both pea and corn products for a period of up to twelve months. Licensing terms have been negotiated and if the option is taken, the existing commercial license signed with Milne will be amended for pea and corn processing exclusivity in the state of Idaho. All other terms of the amended Agreement are confidential.
Lignol Energy Corporation (TSXV: LEC) has announced that its wholly owned subsidiary, Lignol Innovations Ltd. (“LIL”) has secured a commercial supply agreement with a market leader in the sustainable thermoplastics industry. The agreement provides for the supply of LIL’s proprietary HP-LTM lignin to a European company, a global leader in sustainable thermoplastics, as an ingredient in its commercial products. Previously Lignol had delivered trial samples which were used for formulation development, customer evaluation and product trials. LIL will supply tonnage quantities of HP-L lignin for this supply agreement and anticipates working with this customer on other product applications, building upon this initial business success.
Medicago Inc. (TSX: MDG) has executed a collaboration agreement with Mitsubishi Chemical Holdings Corporation (“MCHC”) to develop a next generation technology for plant production. The objectives of the collaboration are to evaluate MCHC’s Plant Factory System, a closed cultivation system, to produce Nicotiana Benthamiana plants for protein production using Medicago’s technologies. Under the terms of their collaboration agreement, Medicago and MCHC will work together exclusively for one year to evaluate the potential of combining MCHC’s Plant Factory System with Medicago’s plant protein production technologies.