Welcome to your Monday Biotech Deal Review for September 30, 2013! There has been a lot of activity in the M&A and finanicngs space the last week. Hit the break for the full rundown of the weeks’s major biotech news!
JSS Medical Research announced that it has acquired LatAm Clinical Trials, a multinational CRO in South and Central America. LatAm offers flexibility of services coupled with an extensive knowledge of Latin American clinical trial industry and regulatory requirements along with an extensive network of experienced clinical investigators. With eight years of experience, LatAm Clinical Trials is recognized as one of the leading regional CROs with established long-term relationships in the pharmaceutical, medical devices, and biotechnology industries.
Easton Pharmaceuticals, Inc. (OTC: EAPH) announced it has signed a letter of intent to acquire a line of Anti-Ageing and beauty care products. The company has 60 days to perform its due diligence and review the line of products as well as any intellectual property including any patents or patent pendings that may come with the acquisition. The Product line and the company the products are being acquired from will stay confidential until closing of a final definitive agreement. Both companies have 60 days in which to come to terms and close on the final agreement. Should the deal close, this acquisition will bring Easton into the $426 Billion a year Cosmetics Industry which will coincide and complement its therapeutic line of products including its main product, “VIORRA”, a product to help treat FSAD (Female Sexual Arousal Disorder) utilizing ingredients which the FDA classifies as safe (GRAS).
Sun-Rype Products Ltd. (TSX: SRF) (the “Company”) announced that at the special meeting of the Company’s shareholders, the shareholders approved the previously announced plan of arrangement among the Company, SRF Acquisition Inc. (“SRF”) and Great Pacific Industries Inc. (the “Arrangement”). Under the Arrangement, SRF will acquire all of the common shares of the Company not already owned by SRF and its affiliates for a cash payment of $7.50 per common share.
Opmedic Group Inc. (the “Corporation”) (TSX: OMG) announced that it has entered into an acquisition agreement (the “Acquisition Agreement”) with Kemourmedic Group Inc. (“Kemourmedic Group”) pursuant to which all of the outstanding common shares of the Corporation will be acquired by Kemourmedic Group at a price of $2.90 in cash per share and the Corporation will be taken private for a total consideration of approximately $18.1 million (the “Transaction”). The Transaction values the Corporation’s equity at approximately $50.1 million. The Transaction is to be structured as an amalgamation of the Corporation with Kemourmedic Acquisition Inc., a wholly-owned subsidiary of Kemourmedic Group, under the laws of the Province of Quebec.
STI Technologies Limited announced shareholder approval of a plan of arrangement that will result in Toronto-based private equity firm, Imperial Capital Group, investing over $17 million dollars in the company. The transaction, which represents one of the largest investments recently made in the region, is still subject to court approval but received overwhelming shareholder approval after a special shareholders meeting that took place on Monday, September 23rd in Halifax. Many of the company’s early investors, including GrowthWorks Atlantic Fund, are selling their shares and receiving an attractive return on their original investment.
Merus Labs International Inc. (the “Company”) (TSX: MSL) announced that the Company has refinanced its debt obligation previously provided by PDL BioPharma, Inc. (“PDL”) (NASDAQ:PDLI) which had an outstanding amount owing of US$39.5 million, by closing on two new debt instruments: a C$30 million senior credit facility with the Royal Bank of Canada and the Bank of Montreal, and a C$10 million convertible note debenture with a large Canadian institutional investor. The C$30 million of senior debt is a three year term loan which can be drawn via a number of availment options either on a fixed or variable interest rate basis. The C$10 million unsecured convertible debenture pays interest at a rate of 8% per annum and matures in five years. At any time at the option of the holder, the principal amount of the convertible debenture may be convertible into the Company’s common shares at a price of $1.50 per share. If the trading price of the common shares of Merus closes for 20 consecutive trading days at $2.30 or greater, the Company has the option to force conversion of the entire note into common shares.
Stellar Biotechnologies, Inc. (“the Company”) (TSX-V: KLH) announced the closing of its private placement raising total gross proceeds of US$12,000,000 (the “Private Placement”), previously announced here. In connection with the Private Placement, the Company issued a total of 11,428,570 units (the “Units”) for total gross proceeds of US$12,000,000. The Private Placement included a brokered portion sold to institutional and accredited investors totalling US$5,000,000 (4,761,903 Units) (the “Brokered Offering”) and a non-brokered portion totalling US$7,000,000 (6,666,667 Units) (the “Non-brokered Offering”). The Non-Brokered Offering included a US$5,000,000 investment by Amaran Biotechnology, Inc., a privately-held Taiwan biotech company and biopharmaceuticals contract manufacturer. Each Unit, sold for US$1.05, comprises one share of Stellar’s common stock and one half of a share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to purchase one additional share of Stellar’s common stock at a purchase price of US$1.35 for a period of three years from the issuance date of the Warrants.
Lorus Therapeutics Inc. (TSX: LOR) (the “Company”) announced that it has completed a private placement of convertible promissory notes (the “Notes”) for aggregate gross proceeds of $600,000 (the “Private Placement”). The Notes bear interest at a rate of 10% per annum, payable quarterly and are due September 26, 2015, subject to the right of the Company to repay the Notes at any time. The principal amount of each Note is convertible at the option of the holder thereof into common shares of the Company at a conversion price of $0.30 per common share.
Response Biomedical Corp. (the “Company”) (TSX: RBM) announced the brokered and non-brokered private placement of Subscription Receipts for aggregate gross proceeds of up to $4,000,000. Response has entered into an agency agreement (the “Agency Agreement”) with Bloom Burton & Co. Inc. (the “Agent”) to act as agents on a “best efforts” basis to sell, on a private placement basis, up to 816,326 subscription receipts (the “Subscription Receipts”), at a price of $2.45 per Subscription Receipt, for aggregate proceeds to Response of up to $2,000,000 (the “Offering”). In addition, Response has entered into Subscription Agreements with affiliates of OrbiMed Advisors, LLC (“OrbiMed”), pursuant to which OrbiMed has subscribed for 816,325 Subscription Receipts at a price of $2.45 per Subscription Receipt, for aggregate proceeds to Response of approximately $2,000,000 (together with the Offering, the “Private Placement”). Concurrently with the execution of the Agency Agreement, the Company has entered into Subscription Agreements with subscribers (other than OrbiMed) for 456,792 Subscription Receipts. The Company will be seeking shareholder approval of the Private Placement at a special meeting of the Company’s shareholders. Prior to such meeting, the Company may enter into additional Subscription Agreements with additional subscribers up to the maximum aggregate proceeds for the Private Placement of $4,000,000 and if necessary, will hold more than one closing for the Offering.
Covalon Technologies Ltd. (the “Company”) (TSX-V: COV) announced that it has received final approval from the TSX Venture Exchange for its previously announced non-brokered private placement comprised of 750 units (the “Units”) at a price of $1,000 per Unit for gross proceeds of $750,000. The Company also announced that, subject to regulatory approval, Covalon has granted 309,500 stock options (“options”) to directors, officers and staff of the Company. The options issued to directors and officers have an exercise price of $0.85 per common share, will vest over the next three years and are valid for a period of five years from the date of grant.
Annidis Corporation (TSX-V: RHA) (the “Company”) is providing an update on its previously announced $5,000,000 private placement of common shares (the “Financing”) with Yimai Technology International Company Limited (“YIMAI”). Annidis and YIMAI have agreed on an adjustment to the $600,000 bridge loan previously announced on August 28, 2013, such that YIMAI will advance to Annidis $200,000 at an interest rate of 10% per annum repayable from the proceeds of the Financing, in the event that the Financing does not close on or before October 4, 2013. The remaining $400,000 available under the bridge loan has already been advanced to Annidis.
Biosenta Inc. (CNSX: ZRO) (the “Company”) announced a private placement of up to 8,800,000 units at a price of $0.15 per unit for gross proceeds of up to $1,320,000 (the “Offering”). 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 (a “Warrant Share”) 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 number of Warrants to be issued will equal to 8% of the number Units sold in the Offering.
Bioniche Life Sciences Inc. (the “Company”) (TSX: BNC) announced that it has closed a Canadian equity offering of 33,808,620 Units priced at $0.29 per Unit for total proceeds of $9,804,500. Each Unit includes one Common Share and one-half of a Warrant exercisable at $0.40 for two years. The Units were issued pursuant to an agency agreement between the Company and Euro Pacific Canada Inc. (the “Agent”). The Company has agreed to pay the Agent a fee equal to 7% of the gross proceeds ($0.0203 per Unit) plus broker warrants to purchase, in the aggregate, that number of Common Shares which is equal to 7% of the number of Units issued pursuant to the financing at the offering price for two years. After deducting the Agent’s cash fee and other expenses, the net proceeds to the Company are approximately $9 million. As part of the debt refinancing and equity deal completed with Paladin Labs Inc. (Paladin) in July 2013, Paladin has invested $500,000 in Bioniche as part of this equity financing. Further, with the closing of this financing, Paladin will release a further $3 million loan to the Company.
Aequus Pharmaceuticals Inc. announced the closing of $1.2 million in equity financings. At the time of closing, Aequus finalized an exclusive, worldwide in-licensing deal of intellectual property enabling for the transdermal application of aripiprazole from New York based laboratory, Transdermal Research Pharm Laboratories, LLC.
Commercial & Other Agreements
Plandaí Biotechnology, Inc. (OTCQB: PLPL) announced that it has sold an exclusive license to Oasix, Inc., a Canadian company that develops and markets skin care products and also operates the Oasis Skin Institute in Alberta, Canada. Under the terms of the license, which calls for an initial payment of $500,000, Oasix will have the right to develop and market cosmetic products using Phytofare™ Pheroid™ Topical Catechin Complex (“ph2TM”), a new topical cream developed using the nano-entrapment technology recently licensed by Plandaí. The five-year license is limited to ph2TM Topical Catechin Complex for cosmetic uses in Canada, the US, South Africa and Nigeria. Oasix is also required to purchase annual minimum quantities of ph2TM Topical Catechin Complex from Plandaí. The payment terms include an up-front payment of $250,000, which has been received, with the balance due on completion of the clinical trials currently underway at North-West University.
Cardiome Pharma Corp. (TSX: COM) announced that its subsidiary, Cardiome Development AG, has entered into an agreement with LifePharma (Z.A.M) Ltd., to sell and distribute BRINAVESS™ (vernakalant intravenous) exclusively in Cyprus. Under the terms of the agreement, LifePharma has agreed to specific annual commercial goals for BRINAVESS. Financial details of the agreement were not disclosed.
BioExx Specialty Proteins Ltd. (the “Company”) (TSX: BXI) announced that the Toronto Stock Exchange (the “TSX”) has informed the Company that it is reviewing the eligibility for continued listing of the Company’s common shares on the TSX. The Company has been granted 60 days to comply with all the requirements for continued listing. If the Company cannot demonstrate that it meets all of the TSX ongoing listing requirements on or before November 25, 2013, the Company’s common shares will be delisted.
Merck Canada announced that it is reinforcing its commitment to the Quebec life sciences research innovation sector by providing a $4 million grant to the Fonds de recherche du Québec – Santé (FRQS) for academic research. The FRQS grant will go towards supporting patient-oriented research conducted by the Strategy for Patient-Oriented Research (SPOR) initiative.
Cardiome Pharma Corp. (TSX: COM) announced that BRINAVESS™ (vernakalant intravenous) has been approved in Turkey by the Turkish Ministry of Health for the rapid conversion of recent onset atrial fibrillation (AF) to sinus rhythm in adults. The Turkish Ministry of Health oversees the regulation of medicines in Turkey. Turkey is a significant emerging market in the pharmaceutical industry. According to the European Federation of Pharmaceutical Industry and Associations Pharmaceutical Industry Report, total sales for the pharmaceutical market in Turkey totaled €7.2B1 in 2011.
Nordion Inc. (TSX: NDN) has reached an agreement to settle claims filed against Nordion and its subsidiaries by BioAxone BioSciences, Inc. (“BioAxone”) for a nominal amount. The parties are finalizing the settlement documents, which are expected to be confidential. During fiscal 2012, Nordion was served with a Complaint relating to the Company’s former MDS Pharma Services business. This legal action, commenced by BioAxone in Florida, related to the preparation and qualification of a Bacterial Master Cell Bank relating to the development of a biologic drug. The settlement is expected to have a non material impact on Nordion’s financial position, which the Company intends to report in its fourth quarter fiscal 2013 results.