The Cross-Border Biotech Blog

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

Monday Deal Review: April 22, 2013

Welcome to your Monday Biotech Deal Review for April 22, 2013! Aeterna Zentaris has had a busy two weeks on the commercial front, signing agreements with Merck and Ergomed.  However, there was a lot more action as well.  Hit the break to catch up on the week’s major biotech news.  

M&Eh

Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) and Obagi Medical Products, Inc. (NASDAQ: OMPI) announced that the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) with respect to the previously announced tender offer by its indirect wholly-owned subsidiary, Odysseus Acquisition Corp. (“Purchaser”), for all of the outstanding shares of common stock of Obagi Medical Products, Inc. at a price of $24.00 per share, net to the seller in cash, without interest (less any required withholding taxes) and subsequent merger of Purchaser with Obagi expired at 11:59 p.m., New York City time April 19, 2013. The expiration of the HSR waiting period satisfies one of the conditions to consummate the tender offer. The completion of the tender offer is also conditioned on approval of the transactions by the Antimonopoly Committee of Ukraine (the “AMC”) for purposes of compliance with applicable Ukrainian antimonopoly law and the tender of a majority of the outstanding shares of common stock of Obagi (on a fully diluted basis).

Ovid Capital Ventures Inc. (TSXV: OCA.P) has announced that it has signed a non-binding letter of intent (the “LOI”) with iTech Medical, Inc., (PINK: IMSU) a corporation existing under the laws of Delaware (“iTech”), which outlines the general terms and conditions pursuant to which Ovid and iTech would be willing to complete a transaction that will result in a reverse take-over of Ovid by the shareholders of iTech (the “Transaction”). The LOI was negotiated at arm’s length and is effective as of April 18, 2013. The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the “Definitive Agreement”) to be signed on or before June 30, 2013 (or such other date as may be mutually agreed in writing between Ovid and iTech). The Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the “TSXV”) and standard closing conditions, the approval of the directors of each of Ovid and iTech of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of Ovid and iTech, as well as the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies, however, it is currently contemplated that the transaction will be structured as an exchange of securities.

Angiotech Pharmaceuticals, Inc. (TSX:ANP)  has announced that on April 12, 2013 it completed its transaction, as previously announced on March 25, 2013, to sell certain of its subsidiaries, comprising Angiotech’s Interventional Products Business, to Argon Medical Devices, Inc., a portfolio company of RoundTable Healthcare Partners, and certain of its affiliates.  Angiotech received shareholder approval to conclude the transaction on April 8, 2013.

Lignol Energy Corporation (TSXV: LEC) has announced that, further to its press release dated March 11, 2013, the convertible notes held by the company and issued by Territory Biofuels Limited have been converted into a 40% fully diluted equity stake in TBF. LEC is now the largest shareholder in TBF, which owns a 150 million litre per year biodiesel plant and glycerine refinery located in Darwin, Australia.  In conjunction with this transaction, two LEC executive officers and directors, Mr. Ross MacLachlan and Mr. Stephen Morris, have been appointed directors of TBF with Mr. MacLachlan assuming the role of Chairman of TBF.

Resverlogix Corp. (TSX:RVX) has approved a proposal to spin-out its subsidiary, RVX Therapeutics Inc., which will focus on innovative drug research and development by leveraging its epigenetics platform. RVX Therapeutics will exclude Apolipoprotein A-1 and RVX-208 technologies, rather focusing on multiple therapeutic indications including autoimmune diseases and cancer. The spin-out is to be implemented by way of a court-approved Plan of Arrangement pursuant to the Business Corporations Act (Alberta). The implementation of the Arrangement will be subject to, among other things, final board approval of the Arrangement and a shareholder vote.

Investment

Trimel Pharmaceuticals Corporation (TSX: TRL) has entered into an underwriting agreement with a syndicate of underwriters led by RBC Capital Markets and including D&D Securities Inc. and Paradigm Capital Inc. to sell 50,000,000 common shares of the Company (the “Common Shares”) at a price of $0.80 per Common Share for aggregate gross proceeds of $40.0 million. No warrants of the Company will be offered as part of the transaction.

Mr. Eugene Melnyk has completed the refinancing of the loans that were secured by a pledge of the 53,478,965 common shares of Trimel Pharmaceuticals Corporation (TSX: TRL) beneficially owned by him (which represent approximately 58.9% of the outstanding common shares of Trimel). As a result of this refinancing, these shares were released from this pledge and the right to vote and sell these shares has reverted to Mr. Melnyk. Mr. Melnyk has pledged a portion of these shares as security for new loans incurred in the refinancing which also involves the release of such shares based on a price formula.

RepliCel Life Sciences Inc. (OTC: REPCF) announced the closing of a private placement financing (the “Financing”), pursuant to which it has issued 1,643,555 units at a price of CAD$0.31 per unit for gross proceeds of CAD$509,502. Each unit issued consisted of one common share of the Company and one common share purchase warrant. Each warrant entitles the holder to purchase an additional common share at CAD$0.50 per share for a period of 24 months from the closing of the Financing.

Mincom Capital Inc. (TSX-V:MOI.P) and Group Nanoxplore Inc. have announced the signing on April 3, 2013 of a letter of intent (the “LOI”), pursuant to which and subject to approval of the TSX Venture Exchange (the “Exchange”), Mincom will acquire all of the issued and outstanding shares of GNI, which, upon completion, will constitute Mincom’s “qualifying transaction” pursuant to the policies of the Exchange.

Miraculins Inc. (TSXV: MOM) has closed a private placement offering with aggregate gross proceeds to the Company of $1,050,950 from the sale of 11,677,223 units at a price of $0.09 per unit. Each unit is comprised of one common share of the company and one half of one share purchase warrant. Each warrant entitles the holder to purchase one Share at a price of $0.11 per share for a period of 12 months from the date the warrant is issued. The shares and warrants will be restricted from transfer for a period of four months and a day from the date hereof in accordance with applicable securities laws. The net proceeds of the offering shall be used for general corporate purposes including sales and marketing costs related to the company’s PreVu test.

Cardiome Pharma Corp. (NASDAQ: CRME) (TSX: COM) announced that effective as of the opening of trading on April 12, 2013, the Company’s share capital will begin trading on a post-consolidated basis under the same stock symbol. The Company’s transfer agent, Computershare Investor Services Inc., is in the process of mailing letters of transmittal to registered shareholders. The letter of transmittal describes the process by which shareholders may obtain new certificates representing their consolidated common shares. Shareholders who hold their shares through a broker or other intermediary and do not have shares registered in their name will not need to complete a letter of transmittal. No fractional shares will be issued under the share consolidation, and any fractional share will be rounded down to the nearest whole number. Following the consolidation, Cardiome will have approximately 12,470,335 common shares issued and outstanding. All outstanding options of the Company will be adjusted accordingly to reflect the share consolidation.

Commercial and Other Agreements

Aeterna Zentaris Inc. (TSX: AEZ) (NASDAQ: AEZS) announced that its German subsidiary has entered into binding agreements with various partners and licensees with respect to the manufacturing rights and obligations for its Cetrotide® product. The principal effect of such agreements is to transfer manufacturing rights and to grant a manufacturing license for Cetrotide® to a subsidiary of Merck KGaA of Darmstadt, Germany, in all jurisdictions. Subject to the satisfaction of customary closing conditions, the transaction is expected to be completed on or about October 1, 2013, at which time Aeterna Zentaris would receive a one-time payment of €2.5 million, or approximately $3.2 million and certain other payments. In addition, the Company has also entered into a transitional services agreement with Merck KGaA under which the Company will, during a 36-month period, provide various transition services to assist Merck KGaA in assuming responsibility for the manufacturing of Cetrotide® in consideration for the payment of a monthly fee to the Company throughout such period.

Aeterna Zentaris Inc. (TSX: AEZ) (NASDAQ: AEZS) announced the signing of a co-development and profit sharing agreement with Ergomed Clinical Research Ltd. for AEZS-108 in endometrial cancer. Ergomed was selected as the contract clinical development organization to conduct the multicenter, multinational, randomized Phase 3 trial with AEZS-108 in endometrial cancer. Under the terms of the agreement, Ergomed will assume 30% (up to $10 million) of the clinical and regulatory costs for the Phase 3 trial with AEZS-108 in endometrial cancer, which are estimated at approximately $30 million over the course of the study. Ergomed will receive its return on investment based on an agreed single digit percentage of any net income received by Aeterna Zentaris for AEZS-108 in this indication, up to a specified maximum amount.

Actavis, Inc. (NYSE: ACT), and Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX), today announced that Actavis has reached settlement agreements with Medicis Pharmaceutical Corporation, a subsidiary of Valeant Pharmaceuticals International, Inc., resolving outstanding patent litigation related to Actavis’ Abbreviated New Drug Application (ANDA) for Clindamycin and Tretinoin Gel, a generic version of Ziana®, as well as Actavis’ ANDA for Imiquimod Cream, a generic version of Zyclara®. Under the terms of the agreement related to Actavis’ generic version of Ziana®, Actavis may launch its generic product in July 2016, or earlier under certain circumstances. Under the terms of the agreement related to Actavis’ generic version of Zyclara®, Actavis may launch its generic product on Jan. 1, 2019, or earlier under certain circumstances.

Theratechnologies Inc. (TSX: TH) (NASDAQ:THER)  announced the termination of its distribution and licensing agreement with Ferrer Internacional, S.A. for the commercialization of tesamorelin in Europe, Russia, South Korea, Taiwan and certain Asian countries for the treatment of excess abdominal fat in HIV-infected patients with lipodystrophy. Ferrer was also responsible for regulatory activities for tesamorelin in these territories.

Xenon announced that Merck, known as MSD outside the United States and Canada, through an affiliate, has exercised its option to exclusively license small molecule compounds for a novel target for the potential treatment of cardiovascular disease. In 2009, Xenon and Merck entered into a strategic alliance where Xenon employed its human clinical genetics platform to validate novel cardiovascular targets and collaborated on the discovery and development of small molecule compounds for those targets.

Quest PharmaTech (TSXV: QPT), a pharmaceutical company developing and commercializing products for the treatment of cancer, has recently signed an exclusive license agreement with University of California at Los Angeles to develop and market anti-PSA IgE technology for the treatment of cancer.

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