The Cross-Border Biotech Blog

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

Monday Deal Review: December 2, 2013

  Welcome to your Monday Biotech Deal Review for December 2, 2013! Hit the break to see this week’s major biotech news.

M&Eh

Atrium Innovations Inc. (TSX: ATB) (the “Company”) announced that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with a company backed by the Permira funds (the “Permira funds”) whereby the Permira funds will acquire all the issued and outstanding common shares (“Shares”) of Atrium, other than the shares to be rolled over by Fonds de solidarité FTQ (the “Fonds”) and Caisse de dépôt et placement du Québec (“CDPQ”), for $24.00 in cash per Share (the “Purchase Price”). Upon completion of the transaction, Atrium will be jointly owned by the Permira funds (75%), the Fonds (12.5%) and CDPQ (12.5%), before management equity programs. The Purchase Price represents a premium of approximately 22.6% to the closing price of $19.58 per Share on the TSX on November 28, 2013 and a premium of approximately 27.0% over the 30-day volume weighted average price of $18.90 per Share on the TSX, up to and including November 28, 2013. The transaction represents a total enterprise value of approximately $1.1 billion, including the assumption of existing indebtedness, for 100% of Atrium.

Financing

Xylitol Canada Inc. (the “Company”) (TSX-V: XYL) announced a new Control Person (as that term is defined in the policies of the TSX Venture Exchange) of the Company, being Dundee Agricultural Corporation (“Dundee”). Disinterested shareholders of the Company approved Dundee’s option to convert the principal balance and accrued interest on its $3 million loan to the Company into common shares, thereby becoming a Control Person of the Company. The principal balance of the loan, being $3 million, is being converted into common shares of the Company at a rate of $0.24 per share while, subject to TSX Venture Exchange (the “Exchange”) approval, accrued interest totaling $71,013.70 is being converted into common shares of the Company at a conversion price of $0.27 per share, being today’s closing price of the common shares on the Exchange. Pursuant to the conversion of Dundee’s loan and accrued interest, 12,736,013 common shares will be issued and Dundee will hold a total of 21,624,901 common shares, being 29.32% of the Company’s issued and outstanding common shares. Dundee also currently holds 4,444,444 warrants entitling it to acquire the same number of common shares at a rate of $0.375 per share at any time until January 10, 2015.

SQI Diagnostics Inc. (TSX-V: SQD) announced that it has received approval from the TSX Venture Exchange to extend the expiry of 1,199,052 outstanding common share purchase warrants (“the Warrants”) of the Company, which were issued in connection with the Company’s December 2009 private placement financing. Each warrant, as amended, entitles the holder thereof to purchase one common share of the Company at any time until the close of business on December 4, 2013 at an exercise price of $4.00 per common share.  The warrants will be further amended effective December 4, 2013, to extend the term of the warrants to December 4, 2014.  All other provisions of the warrants remain unchanged.

Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the “Company”) announced the closing of its previously announced public offering of 13.1 million units (the “Offering”) generating net proceeds of approximately US$13.7 million, with each unit consisting of one common share and one whole warrant to purchase one common share, at a purchase price of US$1.15 per unit. Each warrant is exercisable for a period of five years at an exercise price of US$1.60 per share. Canaccord Genuity Inc. acted as the sole book-running manager, and Maxim Group LLC act as co-manager for the Offering.

Commercial & Other Agreements

Response Biomedical Corp. (the “Company”) (TSX: RBM) announced that it has entered into agreements to distribute its Cardiovascular portfolio of RAMP® products with two new distributors in China. These new distribution agreements follow the approval of Response’s RAMP® branded cardiovascular Point of Care Testing (“POCT”) portfolio by the China Food and Drug Administration (“CFDA”). The new distributors, Shanghai Elite Biotech Co., Ltd. and Beijing Clear Biotech Co., Ltd., are leading distributors of innovative diagnostic technologies and laboratory products to hospitals in China. Both new distributors will market Response’s cardiovascular tests on Response’s RAMP® branded readers. The territory allocated between the two distributors encompasses all of China. Response’s existing distributors in China will continue to market Response’s cardiovascular products under their own brand labels and registrations. These new distributors, as well as Response’s current two distributors, will sell to the estimated $365 million POCT market in China, a market growing at a rate of 12% per year.

Novartis Pharmaceuticals Canada Inc. (Novartis) announced  an investment of $1.2 million in Alberta to collaborate with the Alberta government to advance care and innovation in multiple sclerosis (MS). This investment by Novartis, for MS research, marks the first collaboration under a memorandum of understanding (MOU) between Novartis and the Alberta government intended to stimulate health research and innovation in the province of Alberta. The $1.2-million Novartis investment will support research for the treatment of MS. The memorandum of understanding (MOU) signed in 2012 between Novartis Pharmaceuticals Canada Inc. and the Alberta government outlines a joint research and innovation collaboration. Under the agreement, the parties will assess opportunities to develop, fund, manage and commercialize innovations in health that support the interests and strategies of Novartis and Alberta. The joint translational and research collaboration includes Novartis Pharmaceuticals Canada Inc., Alberta Innovates Health Solutions and Alberta’s Ministry of Enterprise and Advanced Education. Areas for collaboration identified in the MOU include neurosciences, autoimmune diseases and inflammation, oncology, molecular diagnostics, pulmonary and cardiac diseases, diabetes, and vaccines.

KLOX Technologies Inc. (“KLOX”) announced an exclusive supply, distribution and licensing agreement with Sandoz Canada for KLOX’s innovative and proprietary LumiCleanseTM System (also known as Lumigel Cleanse) for the treatment of acne vulgaris, and for its skin rejuvenation LumiBelTM System (also known as Fast & Mild Beauty System) in Canada. Under the terms of the agreement, Sandoz Canada will be responsible for all commercial activities for the acne vulgaris LumiCleanseTM System and the skin rejuvenation LumiBelTM System in the Canadian market. KLOX will be responsible for the supply of both products to Sandoz Canada. The financial terms of the agreement include upfront and other milestone payments, as well as a profit share structure based on product sales.

MaRS Innovation (MI) announced a new collaboration with Johnson & Johnson Innovation and its affiliate Janssen, Inc., in Canada to advance early-stage technologies related to human health in therapeutics, medical devices, and diagnostics. Through the collaboration, MaRS Innovation and technical experts from the Johnson & Johnson Innovation Center in Boston, Massachusetts will jointly identify and fund high-potential opportunities emerging from well-validated scientific research discoveries within MaRS Innovation’s 16 member institutions, which include the University of Toronto and its affiliated teaching hospitals. Through the agreement, Johnson & Johnson Innovation will provide funding over a three-year period to support promising individual projects based on joint due diligence, which will be leveraged with financial support from MaRS Innovation.

Other

Bioniche Life Sciences Inc. (TSX: BNC) announced that its purified hyaluronate sodium product for horses – NexHA™ – has been approved by the U.S. Food and Drug Administration (FDA) for sale in the U.S. The product was launched in Canada in December of last year and will be launched in the U.S. next week at the American Association of Equine Practitioners’ Annual Convention in Nashville, Tennessee. NexHA™ is a formulation of purified hyaluronate sodium that can be administered to horses by intravenous or intra-articular injection.

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