The Cross-Border Biotech Blog

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

Monday Deal Review: September 23, 2013

  Welcome to your Monday Biotech Deal Review for September 23, 2013! Now that we are in the full swing of September, the activity in the market has ramped up.

In terms of M&A, Axxess has purchased the assets of Revive Bioscience, including Revive’s product and IP portfolios, for an undisclosed amount. Easton has re-entered the drug market by purchasing rights in a female sexual arousal disorder drug. And MTPC has completed its acquisition of Medicago. Medicago’s shares are no longer listed as a result.

In terms of financing, IMRIS and Xylitol have both enetered into loan agreements. However, a number of other companies are also rasing capital through placements, including MedMira, Miraculins, and Bioniche .

Theres lots more to report, so hit the break to see the past weeks’ major biotech stories.

Once again, a big thank you to Jennifer Ng for her help in getting these stories to you.

M&Eh

Axxess Pharma Inc. (OTCMKTS: AXXE) announced it has signed an Agreement for its acquisition of the assets of Revive Bioscience Inc. a leading Canadian OTC healthcare company. The terms of the deal remain private. Revive Bioscience Inc.’s assets include revenues, product inventory, established sales channels, an attractive IP portfolio; including a best-selling, OTC pain relief formula and a number of other proprietary formulas. Revive has a national distribution of products in Canada, through GNC and independent retail stores, and expects to add other large retail outlets later this year. Further, the company has an exclusive world-wide license with one of the top sporting brands in the world. This license provides access to a global distribution network, including 20,000+ retailers. The branded products are endorsed by current athletes from the NFL, NHL and UFC.

Easton Pharmaceuticals (OTCMKTS: EAPH) announced it has re-entered the drug market by acquiring a 50 percent ownership interest in a Drug designed to treat (FSAD) Female Sexual Arousal Disorder (FSAD). The acquisition terms are for the issuance of 10,000,000 restricted shares of the company’s common stock, previously issued in escrow and an option to purchase additional shares should the drug be developed and brought to a certain stage utilizing FDA protocols. The Drug, whose name is not being disclosed at this point in time, is a topical Drug that consists of Alprostadil as its main ingredient. The other 50 percent ownership interest of the Drug is owned by a private Canadian Pharmaceutical Company whose name at this point is also being kept private. Included with the acquisition of the Drug designed to treat FSAD are certain patents / patent pendings filed in the United States patent office, Canada and in Europe, which includes a transdermal delivery technology which are presently not being used in any of Easton’s current product lines.

Mitsubishi Tanabe Pharma Corporation (“MTPC”) (TYO: 4508) and Medicago Inc. (TSX: MDG) announced today the completion of the previously announced acquisition of Medicago Inc. by MTPC. On September 18, 9284-9686 Québec Inc.,a subsidiary of MTPC, acquired all of the outstanding common shares of Medicago, other than the common shares currently held by MTPC and Philip Morris Investments B.V. an affiliate of Philip Morris International Inc. (“PMI”), pursuant to the terms of an arrangement agreement made as of July 12, 2013. As a result, Medicago has become jointly owned by MTPC (60%) and PMI (40%). Shareholders of Medicago, as of the effective date of the arrangement, will be entitled to receive $1.16 per common share in cash, and holders of warrants and stock options will be entitled to receive a cash payment equal to the difference between $1.16 and the exercise price of any warrant or stock option they hold. The common shares of Medicago will be delisted from trading on the Toronto Stock Exchange, at the end of trading on September 19, 2013.

 

Financing

IMRIS Inc. (TSX: IM) announced it has entered into a secured loan facility agreement (the “Agreement”) with Deerfield Management Company, L.P. (“Deerfield”) for $25 million in financing.  In accordance with the terms of the Agreement, Deerfield advanced $25 million immediately following execution of the Agreement. The loan matures five years from the date of the Agreement and may be prepaid subject to certain restrictions contained in the Agreement. The principal amount of the loan is payable in three equal annual installments on the third, fourth and fifth anniversaries of the date of the disbursement, except that, if IMRIS achieves certain revenue targets, the principal payment due on the third anniversary can be deferred for up to two years and the payment due on the fourth anniversary can be deferred for one year. The outstanding principal amount of the loan at any time will accrue interest at a rate of 9% per annum. In connection with the loan, Deerfield will receive warrants to purchase 6.1 million shares of IMRIS common stock at an exercise price of $1.94 per share, which represents a premium of 5% over the closing price of the Company’s common stock preceding the execution of the Agreement.

Xylitol Canada Inc. (the “Company”) (TSX-V: XYL) announced that it has completed a $3 million debt financing (the “Loan”) with Dundee Agricultural Corporation (“Dundee”). The Loan accrues interest at a rate of 1.0% per month. Subject to the approval of the TSX Venture Exchange (the “Exchange”) and any shareholder approval which may be required by the Exchange, the principal amount of the Loan outstanding from time to time or any portion thereof may, at the option of Dundee, be converted into common shares of the Company at the price of $0.24 per common share. Upon conversion of the principal amount of the Loan, any accrued and unpaid interest up to but excluding the date of conversion will be paid in cash, or at the option of Dundee, and subject to the approval of the Exchange, in common shares at a price per share equal to the greater of: (a) the last closing price of the common shares on the Exchange on the date of conversion, and (b) $0.10 per share.

Avidus Management Group Inc. (the “Company”) (TSX-V: AVD) announced a non-brokered private placement (the “Private Placement”) of up to 3,333,333 units of the Company (each a “Unit”) at a subscription price of $0.15 per Unit, for gross proceeds of up to $500,000, subject to the approval of the TSX Venture Exchange (the “Exchange”). Each Unit will be comprised of one common share in the capital of the Company and one transferable common share purchase warrant (each a “Warrant”).  Each Warrant will entitle the holder thereof to purchase an additional common share of the Company at an exercise price of $0.20 per common share for a period of five years from the date of issue; provided, however, that the Company will be entitled to accelerate the expiry date of the Warrants to the date that is 10 days following the date that the Company provides notice to holders that the closing price of the common shares on the Exchange has been equal to or greater than $0.45 for ten consecutive trading days prior thereto.

Bioniche Life Sciences Inc. (the “Company”) (TSX: BNC) announced that it has filed a final short form prospectus in all Canadian provinces with the exception of Quebec, Prince Edward Island and Newfoundland and Labrador for an equity offering (the “Offering”) of units priced at $0.29 per unit. Each unit includes one Common Share and one-half of a Warrant exercisable at $0.40 for two years. Due to demand, the Offering size has been increased to $9,000,000 and the proposed over-allotment option was cancelled. A private placement on identical terms to raise an additional $804,500 less expenses is expected to be completed with three related parties. The preliminary short form prospectus was filed on August 6, 2013.

MedMira Inc. (TSX-V: MIR) announced a CAD $6.105 million (CHF 5.5 million) equity investment from OnSite Lab Holding AG (OnSite Lab).  OnSite Lab is the Company’s largest and controlling shareholder.  Under the terms of the deal Onsite Lab will acquire 122,100,000 equity units at $0.05 per unit. Each equity unit consists of one common share and one common share purchase warrant and is subject to a four month hold period ending February 1, 2014.  Each full warrant entitles Onsite Lab to purchase one common share of MedMira at $0.10 per share exercisable over four years.  Under the terms of this transaction, Onsite Lab will increase its ownership of MedMira common shares from 58.6% to 68.5%. This could increase to 74.5% if all warrants related to this transaction are exercised. Onsite Lab made previous investments in MedMira totaling CAD $11.5 million.

Miraculins Inc. (TSX-V: MOM) (the “Company”) announced the first close of a private placement offering (the “Offering”) with aggregate gross proceeds to the Company of $430,000 from the sale of 7,166,667 units (“Units”) at a price of $0.06 per Unit. Each Unit is comprised of one common share of the Company (a “Share”) and one half of one Share purchase warrant (a “Warrant”). Each whole Warrant entitles the holder to purchase one Share at a price of $0.10 per Share for a period of twelve 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 Company anticipates that a second closing will take place in the near term.

Sirona Biochem Corp. (TSX-V: SBM) (the “Company”) announced that it has closed its private placement in the amount of 9,748,834 units at $0.12 per unit for total gross proceeds of $1,169,860. Each unit consists of one common share and one transferable share purchase warrant, each warrant exercisable into one additional common share of the Company for a period of two years from the date of issue at a price of $0.16 per share. The Company paid a total of $36,652.80 in cash and issued a total of 305,440 share purchase warrants to finders in connection with the placement. Each finder’s warrant is exercisable into one common share of the Company for a period of two years at a price of $0.16 per share.

Calyx Bio-Ventures Inc. (the “Company”) (TSX-V: CYX) announced that effective September 18, 2013, it closed the non-brokered private placement first announced on September 4, 2013 and further increased on September 11, 2013 (the “Private Placement”). The Private Placement consisted of the sale of 3,223,333 units (the “Units”) at a price of $0.15 per unit for gross proceeds of $483,500. Each Unit comprises one common share of the Company and one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant is exercisable into one common share of the Company for a period of 18 months from closing at an exercise price of $0.35.

Commercial & Other Agreements        

Cardiome Pharma Corp. (TSX: COM) announced that its subsidiary, Cardiome Development AG, has entered into an agreement with Tzamal Medical Ltd., to sell and distribute BRINAVESS™ (vernakalant intravenous) exclusively in Israel. Under the terms of the agreement, Tzamal Medical has agreed to specific annual commercial goals for BRINAVESS. Financial details of the agreement have not been disclosed. The initial term of this commercial agreement begins September 15, 2013 for the duration of three years and is renewable on an annual basis, or longer, thereafter.

Cangene Corporation (TSX: CNJ) announced that it has been awarded a multiple award indefinite delivery/indefinite quantity contract to potentially provide its Anthrax Immune Globulin Intravenous (AIGIV) to the U.S. Department of Health and Human Services (HHS) for the U.S. government’s biodefence program.  Under the terms of the five-year contract, Cangene could be awarded delivery orders for the collection and storage of anti-Anthrax human plasma, for the manufacturing of bulk drug substance and AIGIV final drug product.  The contract’s work statement has a total potential maximum value of approximately $264 million to Cangene.

Other

Cardiome Pharma Corp. (TSX: COM) announced completion of the transfer of commercialization responsibility for BRINAVESS™ (vernakalant IV) in the European Union (EU) from its former partner, Merck Sharp & Dohme Corp., a subsidiary of Merck & Co (Merck).  Cardiome has begun supplying BRINAVESS under its own trade dress and transfer of the post-marketing study for BRINAVESS is now complete. Cardiome will continue to market BRINAVESS through its direct sales force in key European markets and through distribution partnerships in others, and recognize revenues for the product worldwide.

Stem Cell Therapeutics Corp. (TSX-V: SSS) announced that it has adopted a shareholder rights plan (the “Plan”) effective September 16, 2013. The Company will be seeking shareholder approval of the Plan at its next annual general and special meeting of shareholders. Under the terms of the Plan, one right will be issued by the Company for each outstanding Stem Cell Therapeutics (“SCT”) common share at the close of business on September 16, 2013, and for each SCT common share issued in the future (subject to the terms of the Plan). The rights issued under the Plan become exercisable only if a person acquires or announces its intention to acquire 20% or more of the common shares of the Company without complying with the “Permitted Bid” provisions of the Plan or without the approval of SCT’s Board of Directors.

Cipher Pharmaceuticals Inc. (TSX: DND) announced that its sales and distribution partner, Ranbaxy Laboratories Inc. (“Ranbaxy”) has received a Paragraph IV Certification Notice of filing from Watson Laboratories Inc. of an Abbreviated New Drug Application (“ANDA”) to the U.S. Food and Drug Administration (“FDA”) for a generic version of Absorica™ (isotretinoin capsules). Ranbaxy and Cipher intend to vigorously defend Absorica’s intellectual property rights and pursue all available legal and regulatory pathways in defense of the product. Absorica was approved by the FDA in May 2012, and granted a three-year market exclusivity period, which expires in May 2015.

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