Welcome to your Monday Biotech Deal Review for October 7, 2013! A busy week saw significant activity in both the financing and commercial agreement spaces. Of note is MedMira recieving a $6.1 million equity investment.
Hit the break for the full rundown of the week’s major biotech news! And thanks again to Jennifer Ng of Norton Rose Fulbright for helping out with this week’s post.
Gamma-Dynacare Medical Laboratories (Gamma-Dynacare) announced that it has completed the acquisition of a controlling interest in Impact Genetics Inc. (Impact Genetics). Over the coming months, Impact Genetics’ operations will move to Gamma-Dynacare’s centre of excellence for pathology, immunopathology, genetics and pharmacogenomics testing in Bowmanville Ontario, near Toronto.
Catamaran Corp. (TSX: CCT) announced the completion, effective as of October 1, 2013, of its previously disclosed acquisition of RESTAT, LLC (“RESTAT”), for a purchase price of $409.5 million in cash, subject to certain customary post-closing adjustments. The purchase price was funded from Catamaran’s existing cash balance and $350 million in borrowings under its revolving credit facility. RESTAT provides prescription claim processing and PBM services. RESTAT is based in Milwaukee, Wisconsin, where its operations will remain.
Pyng Medical Corp. (TSX-V: PYT) (the “Company”) announced that closed its previously announced shares for debt transaction (the “Shares for Debt Transaction”) after receiving disinterested shareholder approval of the transaction at a special meeting of shareholders held on July 11, 2013. The closing of the previously announced private placement by Excelera Corporation (“Excelera”) has been delayed pending further consideration by the Company’s board of directors and by Excelera. Upon closing of the Shares for Debt Transaction, the Company issued a total of 6,645,080 common shares at a price of $0.09 per common share to MDR Specialty Distribution Corporation (“MDR”) of Newport News, Virginia, in satisfaction of debt owing by the Company to MDR in an amount of $598,057.23 (being the equivalent of US$588,118.04, as calculated at the Bank of Canada closing exchange rate on April 26, 2013 of 1.0169 CDN$/US$). Following the completion of the Shares for Debt Transaction, MDR now owns and controls 6,645,080 common shares of the Company, being approximately 28.17% of the 23,587,496 common shares of the Company currently issued and outstanding.
Premier Diagnostic Health Services Inc. (the “Company”) (CNSX: PDH) announced that it has concluded a debt settlement agreement with Management that provides that Management has purchased $31,075 of the Company’s debt that was exchanged for common shares in the capital stock of Premier. Management and its nominees have further purchased 919,065 common shares from a former member of the Company’s Management.
Hamilton Thorne Ltd. (TSX-V: HTL) announced that it is has reached an agreement to amend (the “Debenture Amendments”) its $300,000 unsecured subordinated debentures (the “Debentures”) dated August 29, 2012. The Debenture Amendment: (i) extends the maturity date of the Debentures from October 1, 2013 to October 1, 2016; (ii) reduces the interest rate payable under the Debentures to 10% per annum effective October 1, 2013 until the maturity date; and (iii) amends interest payment terms so that interest to September 30, 2013 shall be accrued and paid only upon maturity or earlier redemption of the Debentures, while interest earned from and after October 1, 2013 shall be payable in arrears on a quarterly basis. All other terms and conditions of the Debentures, as amended, were ratified and confirmed.
Amorfix Life Sciences Ltd. (TSX: AMF) announced that it has closed the first tranche of a non-brokered private placement (the Offering) pursuant to which 240,000 common shares of Amorfix (Shares) and 240,000 Warrants were issued for gross proceeds of CDN$84,000. This is the first of several tranches the company expects to close over the next few weeks. Each Warrant entitles the holder to purchase one Share at a price of CDN$ 0.55 for a period of 24 months following the closing date of the Offering, subject to earlier expiry in the event (a trigger event) that, following the expiry of the four month hold period, the volume-weighted average price of Amorfix’s common shares on the Toronto Stock Exchange (TSX) over a period of twenty consecutive trading days exceeds $1.00. On the occurrence of a trigger event, Amorfix may give notice to holders to accelerate the expiry to a date which is not less than 30 calendar days after such notice is sent to the holders. In connection with the Offering, Amorfix will pay CDN$6,720 in finder fees and issue 19,200 finder warrants which have the same terms as the Warrants.
Annidis Corporation (TSX-V: RHA) (the “Company”) announced that it has closed its previously announced $5,000,000 private placement of common shares (the “Financing”) with Yimai Technology International Company Limited (“YIMAI”). The Financing consisted of the issuance of an aggregate of 27,965,379 common shares to YIMAI for total consideration of $5,000,000. All common shares issued pursuant to the Financing are subject to a statutory hold period of four months and one day from the date of closing. Of these 27,965,379 common shares, 7,132,046 will be held in escrow by Annidis (the “Escrowed Shares”) and will be released to YIMAI on the basis of one Escrowed Share for each (approximately) 3.26 common shares which are issued upon exercise of certain of the Company’s other outstanding convertible securities (the “Convertible Securities”) on or before September 30, 2016. After such date any Escrowed Shares not already released to YIMAI will be cancelled. As of the date hereof, Annidis has a total of 23,242,938 common shares subject to issuance under Convertible Securities, which Convertible Securities are exercisable or otherwise convertible at prices ranging from $0.30 to $0.80 per common share and which expire on various dates between December 2013 and September 2016.
Nightingale Informatix Corporation (TSX-V: NGH) (the “Company”) announced that it has completed a private placement of $857,000 aggregate principal amount of 10% Series C secured subordinated convertible debentures (the “Debentures”) at a price of $1,000 per Debenture (the “Debenture Offering”). The Debentures were issued pursuant to a trust indenture, dated as of March 12, 2013, between the Company and Equity Financial Trust Company, which allowed the Company to raise up to $5 million in Debentures. The Company completed two previously announced private placements totaling $3.915 million aggregate principal amount of Debentures under the same trust indenture on March 12, 2013 and August 21, 2013. The Debentures mature on March 14, 2016 and bear interest at the rate of 10% per annum, which shall be calculated and payable in cash monthly, in arrears, on the first business day of each month, commencing on November 1, 2013. Following March 12, 2014, Nightingale shall have the right to redeem the Debentures (a “Redemption”) at any time, in whole or in part, without notice or penalty, at a price equal to their principal amount plus accrued and unpaid interest. The Debentures are convertible at the holder’s option into common shares at any time at a conversion price of $0.60 per share. The conversion price represented a 150% premium to the 30 day volume weighted average trading price, established at the market close March 8, 2013. The Debentures are secured on all of the Company’s and certain of its subsidiaries’ present and subsequently acquired property and assets, and shall be subordinated to certain defined senior indebtedness in the aggregate amount of $7.5 million. The Debentures will not be listed and have a four-month statutory hold period.
Pivotal Therapeutics Inc. (CNSX: PVO) announced the entering into a CDN $5,000,000 Convertible Promissory Note led by Crossover Healthcare Fund LLC as a continuation of its non-brokered private placement. To date the equity financing raised gross proceeds of CDN $2,741,809. The financing will continue through issuance of Convertible Promissory Notes for up to an additional CDN $5,000,000, which will go towards increasing the Company’s sales and marketing efforts. The Notes are convertible at CDN $0.25 per share and, when closed, the combined proceeds from the financing will be in excess of CDN $7,700,000.
MedMira Inc. (TSX-V: MIR) announced that it has closed the CAD $6.105 million (CHF 5.5 million) equity investment with 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.
Commercial & Other Agreements
BioSyent Inc. (TSX-V: RX) announced that its subsidiary BioSyent Pharma Inc. has signed an exclusive Canadian Licence and Distribution Agreement with its third European partner for a women’s health product that has prior approval from Health Canada. The product has been widely approved in Europe and is successfully marketed in countries such as Germany, France, Italy, Spain, Sweden, Poland, Austria, and Belgium.
Sirona Biochem Corp. (TSX-V: SBM) announced the signing of a Letter of Intent whereby Sirona Biochem will provide a global exclusive license to Obagi Medical Products to commercialize the skin lightening compound TFC-849. In exchange for this license, Sirona Biochem will receive upfront and milestone payments as well as ongoing royalty payments for global product sales.
Miraculins Inc. (TSX-V: MOM), (the “Company”) announced the execution of a non-binding Letter of Intent (the “LOI”) with Cachet Pharmaceutical Co. Ltd. (“Cachet”). The LOI provides Cachet with a non-exclusive ninety-day negotiation period to acquire an exclusive license to commercialize the Company’s SCOUT DS® Non-Invasive Diabetes Screening Test in Mainland China, towards addressing the devastating growth of that country’s diabetes epidemic and the corresponding economic impact to its healthcare system. Under the terms of the LOI, the parties have acknowledged the general terms that could form part of a formalized agreement should they reach that stage in their negotiations, which will abide by Chinese regulations governing Chinese public companies and reflect anticipated market demand within China. Miraculins would be responsible for the manufacture and delivery of SCOUT DS® systems to Cachet for distribution in China and would provide consultation and support for all related business activities.
Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the ”Company”) announced the completion of its previously announced agreements with various partners and licensees with respect to the manufacturing rights and obligations for its Cetrotide® product. The principal outcome of such agreements is the transfer of manufacturing rights and the grant of a manufacturing license for Cetrotide® to a subsidiary of Merck KGaA of Darmstadt, Germany (“Merck Serono”), in all jurisdictions. Under the terms of these agreements, Aeterna Zentaris will receive a one-time payment of €2.5 million, or approximately $3.3 million.
BioExx Specialty Proteins Ltd. (“BioExx”) (TSX: BXI), today announced that its board of directors (the “Board”) has determined that it is in the best interest of stakeholders of BioExx and its wholly-owned subsidiary, BioExx Proteins of Saskatoon Inc. (BioExx and BioExx Proteins of Saskatoon Inc., collectively, the “Company”), for the Company to commence proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”). Accordingly, the Company today applied for and obtained an order (the “Initial Order”) from the Ontario Superior Court of Justice (Commercial Division) (the “Court”) under the CCAA. The Court has granted CCAA protection for an initial period expiring on October 31, 2013.
Merus Labs International Inc. (the “Company”) (TSX: MSL) announced that it received notice from the NASDAQ Stock Market (“NASDAQ”) confirming that the Company has regained compliance with the $1.00 per share minimum bid price requirement for continued listing on the NASDAQ Capital Market. On September 30, 2013, NASDAQ notified the Company that the closing bid price of its common stock has been at $1.00 per share or greater at least 10 consecutive trading days. Accordingly, NASDAQ has confirmed to the Company that it has regained compliance with the minimum bid price rule and the matter is now closed.
Cardiome Pharma Corp. (TSX: COM) announced that BRINAVESS™ (vernakalant intravenous) has been approved in South Africa by the Medicines Control Council (MCC) for the rapid conversion of recent onset atrial fibrillation to sinus rhythm in adults. The MCC oversees the regulation of medicines in South Africa.