The Cross-Border Biotech Blog

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

Monday Deal Review: October 14, 2013

  Welcome to your Monday Biotech Deal Review for October 14, 2013!

Of particular note this week is the innovative collaboration between Sirona Biochem and Bloom Burton & Co. The venture seeks to develop and commercialize new therapeutics in the areas of inflammation and infectious disease. Such an arrangement purports to take advantage of Sirona’s proprietary fluorination technology platform, and Bloom Burton’s knowledge of the market and expertise in commercialization, delivering to market products targeted towards rare or neglected inflammatory diseases and bacterial resistance. This model shows significant promise, so look to this space to see how the relationship progresses.

Hit the break to get the full scoop on the week’s major stories!

M&Eh

Atrium Innovations Inc. (TSX: ATB) (the “Company”) announced that it has acquired 70% of the outstanding shares of Mucos Pharma CZ s.r.o. (“Mucos CZ”). The transaction includes an obligation on or before December 31, 2015 to acquire the remaining 30% of Mucos CZ shares allowing for a proper transition. The acquisition price of this transaction is established on a multiple of 4.75 times the last twelve months EBITDA. This transaction of US$15.9 million will be financed with existing credit facilities.

Laborie Medical Technologies, Inc. announced it has completed the acquisition of UroMed Technology, Inc.’s pelvic muscle rehabilitation business (“UroMed”). The acquisition of UroMed expands Laborie’s offering in Pelvic Muscle Rehabilitation and in the conservative therapy sector. Laborie, based in Toronto, Ontario, is a leading global manufacturer and supplier of medical testing equipment and consumables with exceptional brand recognition and industry-leading technologies. Laborie supplies physician offices, hospitals, and mobile providers on six continents. Since Audax’s acquisition in July 2012, Laborie has also completed the acquisition of Life-Tech, Inc., based in Stafford, Texas, in January of 2013.

Financing

BIOSENTA INC. (CNSX: ZRO) (the “Company”) announced that the first tranche of a private placement of units previously announced by a news release on September 26, 2013 at a price of $0.15 per unit (the “Offering”), has closed. The Company issued 6,522,892 units, each unit consisting 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 Company (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 October 10, 2013. Of the $978,433.80 of units sold, $743,184.62 of the aggregate subscription price of the units was satisfied by the setoff of existing debt owed by the Company to the certain subscribers. In connection with the issue and sale of the units, the Company issued 248,333 Class A Shares at a deemed issue price per share of $0.15 to satisfy the payment of $37,250 in finders’ fees and issued 124,166 warrants to acquire Class A shares at a price of $0.20 per share the extent such warrants are exercised on or before the date that is 18 months from October 10, 2013.

Medifocus Inc. (TSX-V: MFS) announced that it has extended its previously announced offering of units. Subject to regulatory approval, Medifocus is offering up to $6,000,000 worth of units (the Units) at a price of $10,000 per Unit by way of a non-brokered private placement (the Offering). Each Unit consists of (i) redeemable promissory notes, bearing 8% annual interest payable on a quarterly basis (Notes), which are convertible into common shares (Common Shares) at a conversion price of $0.25 per Common Share, and which are payable 36 months after the closing of the Offering; and (ii) Common Share purchase warrants to purchase up to one-half the number of Common Shares resulting from such conversion (Series C Warrants). Each whole Series C Warrant will entitle the holder to purchase one additional Common Share at a price of $0.30 per Common Share for a period of 36 months following the completion of the Offering. Medifocus anticipates that the Offering will be completed on or around November 15, 2013. Medifocus may pay finder’s fees equal to 9% of the gross proceeds raised and issue non-transferable finder’s warrants to purchase up to 9% of the number of Common Shares underlying the Units sold in the Offering. Each finder’s warrant will entitle the holder to purchase one additional Common Share at a price of $0.30 per Common Share for a period of 24 months following the completion of the Offering.

Avidus Management Group Inc. (the “Company”) (TSX-V: AVD) announced an increase to its non-brokered unit private placement previously announced on September 19, 2013 from $500,000 to $750,000.  The Company will issue up to 5,000,000 units (each, a “Unit”) at a purchase price of $0.15 per Unit (the “Private Placement”), 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. The company also reports the exercise of 2,157,500 common share warrants in the preceding 60 days, each with an exercise price of $0.10.

Welichem Biotech Inc. (the “Company”) (TSX-V: WBI) announced the results of its substantial issuer bid, pursuant to which the Company offered to purchase for cancellation up to 23,529,411 of its issued and outstanding common shares (“Shares”) at a purchase price of $0.85 per Share for an aggregate purchase price of up to $20 million (the “Offer”). The offer expired at 5:00 p.m. (Toronto time) on October 9, 2013. Based on the final report provided by the depositary for the Offer, a total of 26,356,197 Shares with an aggregate purchase price exceeding $20 million have been deposited and not withdrawn and, as a result, 23,529,411 Shares with an aggregate purchase price of $20 million will be purchased for cancellation from all shareholders who have tendered their Shares on a pro-rata basis. The Shares being purchased for cancellation represent approximately 28.4% of the issued and outstanding Shares of the Company outstanding as of October 9, 2013 and, following the purchase and cancellation of these Shares, approximately 59,462,658 Shares will remain outstanding. The Company confirms that, as of the date hereof, the amount of paid-up capital to be allocated to each Share is $0.198 and the amount of the deemed dividend per Share is $0.652.

Pivotal Therapeutics Inc. (CNSX: PVO) announced that it completed the sale of 1,649 units at a price of CDN $1,000 per unit of its previously announced debt financing agreement led by Crossover Healthcare Fund LLC, a U.S. institutional fund. Proceeds of the first tranche totalled CDN $1,649,280. To date the total investment from Crossover Healthcare Fund has exceeded CDN $4,300,000. Each unit will consist of CDN $1,000 of Convertible Promissory Notes (the “Note” or “Notes”) and warrants to purchase 1,200 shares of common stock of the Company (the “Warrants”). The maturity of the Notes is two (2) years from the date of issuance. Investors may convert their Notes into common shares for CDN $0.25 per share at anytime prior to maturity. The Notes will accrue interest at a rate of 8% per annum.  The closing of the debt financing is subject to the satisfaction of customary closing conditions and is expected to occur on or about October 31, 2013.

Pivotal Therapeutics Inc. (CNSX: PVO) also announced that it closed the equity portion of the financing led by Crossover Healthcare Fund consisting of 12,462,768 units at a price of CDN $0.22 per unit for total proceeds of CDN $2,741,809. Each unit consists of one common share and one-half purchase warrant. Each full purchase warrant may be exercised to purchase one common share of the Company upon payment of the exercise price of $0.30 per common share. The purchase warrants expire 60 months following the closing of the equity portion of the private placement and may be called by the Company at any time after six months following closing, provided the common shares of the Company have traded at a price of at least $0.45 for 20 trading days within a 30 consecutive day trading period.

Commercial & Other Agreements        

ReliaBrand Inc. (OTCBB: RLIA) announced that Walmart® Canada will be the exclusive chain-wide national retailer of the Adiri® NxGen® Nurser in Canada in 2014. After successful initial testing of the full line of Adiri® NxGen® Nursers in 150 selected Walmart® stores across Canada, ReliaBrand® was approved as a chain-wide inline supplier beginning January, 2014. In addition, ReliaBrand will be replenishing the inventory in the select Walmart® stores on a regular basis until the January, 2014 transition has been made. Currently many of the select stores have sold out of the initial Adiri® NxGen® Nursers. Replenishments to Walmart® Distribution Centers began last week and the Adiri® NxGen® Nursers will begin to appear again in the select Walmart® stores over the next few weeks.

Sirona Biochem Corp. (TSX-V: SBM) and Bloom Burton & Co. (“Bloom Burton”) announced the signing of a Letter of Intent to conduct collaborative research to develop and commercialize new therapeutics in the areas of inflammation and infectious disease. Leveraging Sirona’s proprietary fluorination technology platform, Sirona and Bloom Burton will identify and design promising assets, undertake chemical synthesis and scale up, and conduct preclinical proof of concept studies necessary to support further development activities. The collaboration hopes to address rare or neglected inflammatory diseases and the threat of emerging bacterial resistance, both of which are markets with enormous medical need. Sirona and Bloom Burton will share in the future proceeds arising from the commercialization activities.

Nuvo Research Inc. (TSX: NRI) announced that the Company has been advised by its worldwide Pliaglis licensing partner, Galderma S.A. (Galderma), that Pliaglis has been approved for sale and marketing in Brazil and that it expects to launch Pliaglis in Brazil in early 2014. This entitles Nuvo to a US$2.0 million milestone payment that it expects to receive from Galderma in early 2014.

IMRIS Inc. (TSX: IM) (the “Company”) and Siemens Healthcare today announced that the companies have strengthened their sales collaboration through a new agreement that positions one of Siemens’ most innovative computed tomography (CT) products as the core of the IMRIS VISIUS® iCT solution. Developed for the neurosurgery and spine surgery markets, the VISIUS iCT has at its core the 64- slice Siemens SOMATOM® Definition AS scanner. IMRIS received U.S. Food and Drug Administration (FDA) 510(k) clearance for VISIUS iCT in July. The company currently has systems sold to three major eastern US neurosciences centers.

Cardiome Pharma Corp. (TSX: COM) announced that its subsidiary, Cardiome Development AG, has entered into an agreement with Biospifar S.A., to sell and distribute BRINAVESS™ (vernakalant intravenous) exclusively in Colombia. Under the terms of the agreement, Biospifar S.A. has agreed to specific annual commercial goals for BRINAVESS. Financial details of the agreement have not been disclosed.

Other

BioExx Specialty Proteins Ltd. (the “Company”) (TSX: BXI) announced that the Toronto Stock Exchange (the “TSX”) has informed the Company that effective November 6, 2013 the Company’s common shares will be delisted from the TSX for failure to meet the continued listing requirements of the TSX. Trading in the Company’s common shares will remain suspended. It is anticipated that the Company’s common shares will be duly delisted on November 6, 2013.

Lorus Therapeutics Inc. (TSX: LOR) (the “Company”) issued a Notice of Application in the Ontario Superior Court of Justice, Commercial List (the “Court”) today. The application seeks an order pursuant to Section 133(b) of the Canada Business Corporations Act (the “CBCA”) extending the time for Lorus to call the next annual meeting of its shareholders (“AGM”) to March 31, 2014, together with an order validating service of the application materials in the manner described in the affidavit of Aiping Young, President and CEO of Lorus, sworn October 10, 2013. The application is scheduled to be heard before a judge of the Court on October 23, 2013, at 10:00 a.m., at 330 University Avenue, Toronto, Ontario.

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