Welcome to your Monday Biotech Deal Review for November 11, 2013! This week’s big story was the announcement that Paladin Labs has agreed to be acquired by NASDAQ-listed Endo Health Solutions for $1.7 billion. The deal will lead to existing Paladin shareholders recieving shares in a new holding company (holding both Endo and Paladin shares) and newly formed Canadian public company Knight Therepeutics.
There were many more notable deals this past week, so follow the link to see the full week’s worth of major biotech stories!
Paladin Labs Inc. (TSX: PLB) (“Paladin”) announced that it has reached a definitive agreement to be acquired by Endo Health Solutions (NASDAQ:ENDP) (“Endo”) in a stock and cash transaction valued at approximately $1.7 billion. Pursuant to the acquisition, both Endo and Paladin will be acquired by a newly formed Irish holding company (“New Endo”). At $77 per Paladin share, the transaction represents a 20% premium to the Paladin closing share price on November 4, 2013 of $63.91 and a 25% premium to Paladin’s 3-month volume weighted average share price of $61.67. Paladin will continue to be led by Paladin Labs’ current management, will maintain its Montreal headquarters, and will operate in Canada under its current name, Paladin Labs Inc. Under the terms of the agreement, which has been unanimously approved by the boards of both companies, Paladin’s shareholders will receive 1.6331 shares of New Endo stock and $1.16 in cash, subject to adjustment, for each Paladin share they own upon closing, pursuant to a plan of arrangement under Canadian law. In addition, Paladin’s shareholders will receive one share of Knight Therapeutics Inc. (“Knight”), a newly- formed public company in Canada.
China Health Labs & Diagnostics Ltd. (the “Company”) (TSX-V: CHO) announced that the Company and Century Delight Investment Limited (“Century Delight”) have entered into an agreement (the “Agreement”) pursuant to which Century Delight will become the sole shareholder of the Company following the Company taking action to redeem for cancellation 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”). The Transaction is proposed to be effected by way of a share consolidation and redemption under the Companies Act (Cayman Islands). The consideration offered under the Transaction represents a premium of approximately 44% to the last trading price of CAN$0.43 of the shares on the TSX Venture Exchange as of October 23, 2013 (the day before the first announcement of the Transaction) or a premium of approximately 26.3% over the 30-day volume weighted average price of the shares or approximately 55.4% over the 60-day volume weighted average of the shares on the TSX Venture Exchange as of October 23, 2013. The Transaction will be effected by way of a 47 million to one share consolidation of all of the issued and outstanding shares. Following the consolidation, the Company will compulsorily redeem for cancellation all of the shares held by shareholders whose aggregate holding is less than one whole post-consolidation share. As a result, upon completion of the Transaction, only Century Delight will remain as the sole shareholder of the Company.
OPMEDIC GROUP INC. (TSX: OMG) announced the completion of the amalgamation (the “Amalgamation”) of OPMEDIC Group and Kemourmedic Acquisition Inc. pursuant to which OPMEDIC Group has been taken private. Pursuant to the Amalgamation that closed earlier today, each shareholder of OPMEDIC Group other than the Founders received one redeemable share of the amalgamated corporation for each common share of OPMEDIC Group held immediately prior to the Amalgamation and each redeemable share was then immediately redeemed for $2.90 payable in cash.
Response Biomedical Corp. (the “Company”) (TSX: RBM) announced that shareholders of Response have approved the conversion of 1,273,117 subscription receipts (the “Subscription Receipts”) for gross proceeds of approximately $3.1 million. The Subscription Receipts were issued in connection with the Company’s brokered and non-brokered private placements (the “Offering”). The Company has provided notice to the subscription receipt agent that the escrow release conditions have been satisfied and as a result, the Subscription Receipts have been automatically converted (for no additional consideration) into 1,273,117 common shares of Response and 636,557 common share purchase warrants (each whole warrant, a “Warrant”). Each Warrant has a term of 36 months and an exercise price of $3.58. In connection with the September 26, 2013 agency agreement and the brokered portion of the Offering, Response has paid Bloom Burton & Co. Inc. (the “Agent”) a cash commission of approximately $31,000 and has issued to the Agent 17,689 common share purchase warrants (the “Agent Warrants”). Each Agent Warrant is exercisable for one Common Share for a period of 24 months and has an exercise price of $2.45. As a result of satisfying the escrow release conditions, the net proceeds of approximately $2.7 million from the issuance of the Subscription Receipts will be released to the Company within three business days.
Calyx Bio-Ventures Inc. (TSX-V: CYX) (the “Company”) announced that it has applied to the TSX Venture Exchange (the “Exchange”) for approval to the extension of the expiry date of up to 7,567,834 common share purchase warrants (the “Warrants”) issued to placees and finders as part of a private placement financing which closed in two tranches on November 9, 2012 and December 13, 2012. The expiry date of the Warrants issued on November 9, 2012 (the “First Tranche Warrants”) is currently November 9, 2013 and the expiry date of the Warrants issued on December 13, 2012 (the “Second Tranche Warrants”) is currently December 13, 2013. The Company is applying to extend the expiry dates for the Warrants by 6 months, so that the First Tranche Warrants will expire on May 9, 2014 and the Second Tranche Warrants will expire on June 13, 2014. All other terms of the Warrants will remain the same. The warrant amendment remains subject to the approval of the Exchange.
ProMetic Life Sciences Inc. (TSX: PLI) (the “Corporation”) announced that it has closed its previously announced public offering (the “Offering”) of common shares in the capital of the Corporation (the “Common Shares”). The Offering was conducted on a best efforts basis by a syndicate of agents led by Paradigm Capital Inc. and including Beacon Securities Limited, D&D Securities Inc. and Cormark Securities Inc. (collectively the “Agents”). The Corporation has issued a total of 26,651,400 Common Shares at a price of $0.90 per Common Share for total gross proceeds of $23,986,260, which includes the issuance of 3,333,400 Common Shares issued pursuant to the exercise of the over-allotment option granted to the Agents for gross proceeds of $3,000,060. In consideration for the services rendered by the Agents under the Offering, the Agents received a cash commission of 6% of the gross proceeds of the Offering.
Helix BioPharma Corp. (TSX: HBP) announced it has completed a private placement with net proceeds in excess of CDN$4.6 million, after fees and expenses associated with this transaction. The terms of the placement are for the purchase of common shares at $1.15 per share and include one warrant per share at an exercise price of $1.61 and have an expiry of five years from the date of issue. The private placement also included participation by members of Helix management and directors. ACM Alpha Management Consulting Est. provided financial advisory services to Helix in connection with this private placement.
Commercial & Other Agreements
ProMetic Life Sciences Inc. (TSX: PLI) (the “Corporation”) announced the achievement of a milestone related to its strategic agreement (“Agreement”) with Hematech Biotherapeutics Inc. (“Hematech”) worth $1.5 million. A second milestone representing another $1.0 million is also expected to be achieved this quarter. Pursuant to the Agreement signed in May 2012, $10 million was committed to ProMetic by Hematech for the non-exclusive manufacturing rights related to ProMetic’s proprietary plasma protein purification system (“PPPS™”), said rights being exclusive for Taiwan and for the co-exclusive commercialization rights to plasminogen on a global basis. As part of the Agreement, $2.0 million was paid to ProMetic in 2012 and $2.5 million worth of milestone payment are expected to impact H2 2013. The Agreement calls for additional milestone payments in 2014 in relation to the filing of Investigational New Drug (“IND”) applications for two plasma-derived biopharmaceuticals. Following the completion of clinical trials and regulatory approval, ProMetic will manufacture plasminogen in its Laval facility and will commercialize it, sharing profits equally with Hematech.
Novadaq® Technologies Inc. (the “Company”) (TSX: NDQ) as well as Swissray Asia announced that the companies have entered into an international distribution agreement pursuant to which Swissray Asia has become the exclusive distributor of Novadaq Imaging Systems for the regions of Australia and Indonesia, as well as other Southeast Asia and Oceania countries. Novadaq and Swissray have agreed upon minimum annual purchase commitments for each country in the territories.
Covalon Technologies Ltd. (the “Company”) (TSX-V: COV) announced that it has licensed its antimicrobial silicone adhesive technology to Molnlycke Heath Care (“Molnlycke”). Under the license agreement, Covalon has granted Molnlycke the exclusive rights to exploit Covalon’s patent-pending antimicrobial silicone adhesive technology in the field of single-use surgical, wound care and vascular access medical dressings. Covalon will receive $3.5 million in upfront license fees and additional ongoing minimum royalties, milestone payments and other fees. Covalon retains the rights to exploit the antimicrobial silicone adhesive technology in other fields and commercialize new life-saving products in its development pipeline while continuing to distribute its other products. The parties simultaneously signed a supply and distribution agreement under which Covalon will provide to Molnlycke its United States Food and Drug Administration (FDA) cleared products, SurgiClear™ and IV Clear™, for distribution under the Molnlycke brand.
Medworxx Solutions Inc. (TSX-V: MWX) announced a partnership with Kurt Salmon to use the Medworxx Patient Flow Platform to conduct audits of healthcare organizations in France as part of their management consulting process. Kurt Salmon will use the Medworxx Appropriate Length of Stay Audit (“ALSA”) in combination with their own audit processes and methodologies. The ALSA uses the proven Medworxx software as an audit and diagnostic solution, prior to hospitals implementing the solution operationally. Management consulting companies and hospital support agencies are able to use Medworxx to rapidly unlock unique patient flow data, providing visibility into patient flow issues in the hospitals that they provide services to.
Sophiris Bio Inc. (TSX: SHS) (the “Company”) announced that it has applied for voluntary delisting of its common shares from the Toronto Stock Exchange (“TSX”). Sophiris’ common shares are currently listed for trading on the NASDAQ Global Market and the TSX. After delisting from the TSX, the Company’s shares will continue to trade on NASDAQ under the symbol “SPHS”. Subject to the application being accepted by the TSX, the Company expects the delisting to be effective on or about November 13, 2013.