The Cross-Border Biotech Blog

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

Monday Deal Review: October 28, 2013

  Welcome to your Monday Biotech Deal Review for October 28, 2013! This week saw some activity in both the M&A and financing spaces, notably involving BELLUS Health, Concordia, Arch Biopartners, Novadaq and others.

Hit the break to catch up on the week’s major biotech news!

M&Eh

BELLUS Health Inc. (TSX: BLU) (the “Company”) announced the divestiture of two non-core assets: VIVIMIND™, a natural health product for memory protection, and BLU8499, a drug candidate for the treatment of CNS diseases including Alzheimer’s disease. As part of the transactions, BELLUS Health will receive a cash consideration from FB Health, an equity stake in FB Health as well as royalties and a share of BLU8499 revenues from Alzheon.

China Health Labs & Diagnostics Ltd. (TSX-V: CHO) (the “Company”) announced that its board of directors has received an unsolicited non-binding proposal from Century Delight Investment Limited (“Century Delight”), to acquire all of the outstanding common shares of the Company not already owned by Century Delight for cash consideration of $0.62 per share (the “Transaction Proposal”). The Consideration offered under the Transaction Proposal represents a premium of approximately 44% over the closing price of the Company’s shares listed on the TSX Venture Exchange on October 23, 2013.  Under the Transaction Proposal, the privatization is proposed to be effected by way of a share consolidation under the Companies Act (Cayman Islands).  Century Delight owns, or has control or direction over, 47,009,266 common shares representing approximately 72% of the Company’s 65,606,686 common shares outstanding. Century Delight has informed the Company that it is seeking financing, but that it has not yet entered into a binding financing agreement.

Mercari Acquisition Corp. (TSX-V: MV.H) announced that it has entered into a letter of intent dated October 23, 2013 with Concordia Healthcare Inc. (“Concordia”) to complete a going public transaction for Concordia (the “Proposed Transaction”) by way of a reverse takeover of Mercari. The Proposed Transaction will be conducted by way of share exchange, merger, amalgamation, arrangement, share purchase or other similar form of transaction pursuant to a definitive agreement to be entered into between Mercari and Concordia (the “Transaction Agreement”). In conjunction with the Proposed Transaction, Concordia intends to complete a brokered private placement (the “Private Placement”) for gross proceeds of up to $30 million. It is contemplated that securities issued in the Private Placement would be ultimately convertible or exchangeable into freely tradeable common shares of the entity resulting from the completion of the Proposed Transaction. It is intended that the shares of the entity resulting from the completion of the Proposed Transaction will be listed on the Toronto Stock Exchange (the “TSX”). Pursuant to the Proposed Transaction and if the Proposed Transaction is completed, it is anticipated that: (a) Mercari will change its name, which name will be determined prior to the completion of the Proposed Transaction; (b) a new slate of directors will be elected; (c) auditors will appointed for the resulting issuer; and (d) Mercari will consolidate its common shares on a ratio to be determined prior to the completion of the Proposed Transaction.

Financing

MedMira Inc. (TSX-V: MIR) has received an additional USD $1.917 million from the US Army. The Company is currently developing and commercializing two rapid tests for transfusion transmitted diseases under a United States Army Medical Research Acquisition Activity (USAMRAA) contract. The new funding enables MedMira to conduct additional testing for the Reveal Rapid Hepatitis B Surface Antigen Test and Multiplo Rapid HBc/HIV/HCV Antibody Test in parallel with the current clinical trials. Testing of additional specimens will provide the clinical data required for MedMira to obtain complementary label claims and intended uses for these two products, expanding their utility in a number of field applications.

ProMetic Life Sciences Inc. (TSX: PLI) (the “Corporation”) announced that it has priced its previously announced public offering (the “Offering”) of common shares in the capital of the Corporation (the “Common Shares”). The Corporation will file an amended and restated preliminary short form prospectus (the “Amended Preliminary Prospectus”) with the securities regulatory authorities in all Canadian provinces in order to amend and restate the Corporation’s preliminary short form prospectus dated October 21, 2013 (previously announced here). The Amended Preliminary Prospectus will reflect the updated terms of the Offering and will provide for the sale of 22,223,000 Common Shares at a price of $0.90 per Common Share for gross proceeds of $20,000,700. The Offering is being conducted on a “best efforts” basis through a syndicate of agents led by Paradigm Capital Inc. and including Beacon Securities Limited, D&D Securities Inc. and Cormark Securities Inc. The closing of the Offering is scheduled to take place on or about November 7, 2013.

Arch Biopartners Inc  (the “Company”)(CNSX: ACH) announced it has engaged M Partners Inc. (the “Agent”) to act as lead agent in respect of a best efforts private placement offering of up to 1,785,715 common share units of the Company (the “Units”) for gross proceeds of up to $500,000 (the “Offering”). Each Unit will consist of one common share of the Company and one common share purchase warrant (the “Warrant”). Each Warrant will entitle the holder thereof to acquire one common share of the Company at an exercise price of $0.50 per common share for a period of 24 months from the closing date of the Offering. The closing of the Offering is expected to occur on or about the week of November 4th, 2013 or such other date as agreed by the Agent and the Company.

Novadaq® Technologies Inc. (the “Company”) (TSX: NDQ) announced that it has priced the underwritten public offering of 6,250,000 newly issued common shares at a public offering price of US$16.75 per share. The gross proceeds to Novadaq, before underwriting discounts and other offering expenses, are expected to be approximately US$105 million. The Company currently has no present understandings, commitments or agreements to enter into any acquisitions or make any investments. The closing of the Offering is expected to occur on or about October 29, 2013 or such other date that Novadaq and the underwriter agree.

CytoDyn Inc. (OTCQB: CYDY) announced the completion of its equity capital raise for a total of $14.5 million through a private offering. The proceeds from the offering will be used to fund current operating expenses in order to continue the development of the Company’s primary drug candidate, PRO 140, which is believed to be one of the leading monoclonal antibodies for the treatment of HIV.

Antibe Therapeutics Inc. (the “Corporation”) (TSX-V: ATE) today granted its independent directors and a new addition to its management team options to purchase a total of 250,000 common shares of Antibe pursuant to the Corporation’s stock option plan. Each option bares an exercise price of $0.55, being the closing price of Antibe shares on October 21, 2013, and an expiry date of October 21, 2023. Twenty-five percent of the options vest on the grant date and 1/36th of the remaining options vest in each of the subsequent 36 months.

Commercial & Other Agreements        

Cardiome Pharma Corp. (TSX: COM) announced that its subsidiary, Cardiome International AG, has entered into an agreement with Algorithm S.A.L., headquartered in Beirut, Lebanon, to sell and distribute BRINAVESS™ (vernakalant intravenous) exclusively in certain Middle Eastern and North African countries. Under the terms of the agreement, Algorithm 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 November 1, 2013 for the duration of five years and is renewable on an annual basis, or longer, thereafter. Countries covered by the agreement where Algorithm will be able to commercialize BRINAVESS include: Algeria; Bahrain; Egypt; Iran; Jordan; Kingdom of Saudi Arabia; Kuwait; Lebanon; Libya; Morocco; Oman; Qatar; Tunisia; and United Arab Emirates.

Easton Pharmaceuticals, Inc. (OTCMKTS: EAPH) announced it has signed a formal agreement with BMV Medica S.A. de C.V. (BMV) a Mexican Regulatory & Licensing consultancy to begin the process of submitting applications to obtain regulatory government approvals for its flagship product “VIORRA.” The agreement calls for milestone payments to be made to BMV and has confirmed that an initial up- front payment representing 33% of the total owed, plus a consultant fee, has been advanced to BMV towards the “VIORRA” government regulatory filing, which represents the first such payment to BMV after previous delays. The remaining payments as per the agreement, calls for milestone payments to be made over the next 6 month period which includes the drafting and submission of a comprehensive Dossier. BMV has guaranteed to the Company, pending the receipt of appropriate manufacturing documents, the company shall receive not only regulatory approval in Mexico, but shall search and deliver on a suitable distribution partner for sales and marketing. “Viorra” is an over-the-counter aid meant to restore and improve vaginal moisture and elasticity which has a very positive effect on women’s sexual desire and arousal targeted for women suffering from FSAD (Female Sexual Arousal Disorder).

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