The Cross-Border Biotech Blog

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

Monday Deal Review: June 24, 2013

Welcome to your Monday Biotech Deal Review for June 24, 2013!

The past weeks’ big news is Antibe’s IPO, which resulted in approximately $2.1 million in proceeds. Antibe also concurrently made a private placement of shares with two private investors.

Valeant also made big news with the announcement of a public offering for proceeds of $1.75 billion, and a senior notes offering of about $3.2 billion.

Get the details on these major stories, and many more, by following the break.

M& Eh

BELLUS Health Inc. (TSX: BLU) and Thallion Pharmaceuticals Inc. (TSX:TLN) announced that BELLUS Health has agreed to acquire Thallion for approximately $6.332 million in cash, or $0.1765 per share (on a fully-diluted basis), subject to certain adjustments as described below, and the issuance of contingent value rights (“CVRs”), which will entitle the holders thereof to additional payments of up to approximately $7.66 million, or $0.2135 per CVR, if certain product revenue milestones are achieved and a future receivable is collected.

Investment

Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) has announced that it has filed a preliminary prospectus supplement to its effective shelf registration statement on Form S-3 and has today made a similar filing with securities regulatory authorities in each of the provinces of Canada in connection with a public offering of its common shares to raise gross proceeds of approximately $1.75 billion.

Lorus Therapeutics Inc. (TSX: LOR) has announced that it has completed a private placement of units (the “Units”) at a price of $1,000 per Unit, for aggregate gross proceeds of $893,000 (the “Private Placement”). Each Unit consists of (i) a $1,000 principal amount of unsecured promissory notes (the “Promissory Notes”); and (ii) 1,000 common share purchase warrants. The Promissory Notes will bear interest at a rate of 10% per annum, payable monthly and are due June 19, 2014. Each Warrant entitles the holder thereof to acquire one common share of the Company at a price per common share equal to $0.25 at any time until June 19, 2015.

Antibe Therapeutics Inc. (TSXV:ATE) has closed its initial public offering (the “Offering”) of common shares and listed such shares on the TSX Venture Exchange. Pursuant to the Offering, Antibe issued 3,868,000 common shares, at a price of $0.55 per common share, for gross proceeds of $2,127,400. In addition, Antibe completed a private placement to two investors pursuant to which it issued an aggregate of 282,000 common shares, at a price of $0.55 per common share, for gross proceeds of $155,100. The shares issued pursuant to the private placement are subject to a hold period that expires on October 19, 2013.

Critical Outcome Technologies Inc.(TSXV:COT) has completed a non‐brokered private placement and issued 2,412,397 units at a price of $0.12 per Unit for gross proceeds of approximately $289,500. Each Unit consists of one common share and one warrant of the Corporation. Each warrant is exercisable for 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 $2,860 in cash and issued an aggregate of 23,000 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.

Resverlogix Corp. (TSX:RVX) has announced the successful completion of its previously announced Plan of Arrangement under the Business Corporations Act (Alberta) (the “Arrangement”) pursuant to which Resverlogix spun-out RVX Therapeutics Inc. (“Therapeutics”) to Zenith Epigenetics Corp. (formerly 1741273 Alberta Ltd.) (“Zenith”).  Shareholders of Resverlogix now own one new common share of Resverlogix and one common share of Zenith for each common share of Resverlogix held immediately prior to the Arrangement becoming effective.

Debt Financing

Bioniche Life Sciences Inc. (TSX: BNC) and Paladin Labs Inc. (TSX:PLB) have announced a comprehensive strategic collaboration to refinance and increase Bioniche’s debt, provide new equity, and enter into the first licensing deal for Bioniche’s Phase III bladder cancer product – Urocidin™. Paladin acquired Bioniche’s existing debt facility with Capital Royalty Partners II L.P. and its affiliates for approximately $22 million (including accrued interest and prepayment penalties). Concurrently with such acquisition, Paladin and Bioniche agreed to enter into an amended loan transaction whereby Paladin shall provide an additional $8 million loan to support Bioniche’s ongoing operations, $5 million of which will be available upon closing of the amended loan transaction and $3 million of which will be available upon Bioniche’s receipt of equity in the form of licensing revenue or an equity financing. Bioniche has also agreed to grant Paladin an exclusive license to market and distribute Urocidin™ for bladder cancer in Canada, South Africa and Mexico. The companies have agreed to a net revenue sharing arrangement. Bioniche will be responsible for all product development and manufacturing costs and Paladin will be responsible for all sales and marketing costs in the said territories. Further, the agreement provides that Paladin will pay a series of potential sales performance milestones that can total up to $16 million during the term of the agreement.

Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) has announced that VPII Escrow Corp., a newly formed wholly owned Canadian subsidiary of the Company, has launched its offer of approximately $3.2 billion aggregate principal amount of senior unsecured notes (the “Notes”). The Notes will be due in 2021 and in 2023, with final tranching determined at pricing.

Nuvo Research Inc. (TSX: NRI)  and Paladin Labs Inc. (TSX:PLB) have announced that they have amended their loan arrangements (the “Loan”) originally agreed to in May 2012.  In May of 2012, Nuvo drew down the first $4.0 million tranche of the Loan which has been paid down to its current principle balance of $2.0 million. Under the terms of the amended arrangements, Nuvo is entitled to draw down a second $4.0 million loan tranche immediately and a third $4.0 million loan tranche upon the occurrence of both the (i) launch of Pennsaid® 2% in the U.S. by Nuvo’s U.S. marketing partner, Mallinckrodt Inc. and (ii) Pliaglis global annual sales achieving a US$5.0 million run rate.  Certain repayment and default provisions have also been amended.  The new tranches of the Loan, as with the first tranche, will bear interest at 15% per annum. Paladin will be issued warrants to acquire 50,000 Nuvo common shares at 130% of the 5-day trailing value weighted average trading price (“VWAP”) of Nuvo common shares on the Toronto Stock Exchange.  If Nuvo exercises its option to draw down the third tranche of the Loan, Paladin will be entitled to be issued warrants to acquire a further 50,000 Nuvo common shares at 130% of the VWAP of Nuvo common shares as of the date that Nuvo draws down the third tranche. The warrants will expire 3 years from their date of issue.

 

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