The Cross-Border Biotech Blog

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

Monday Deal Review: March 17, 2014

  Welcome to your Monday Biotech Deal Review for March 17, 2014, and happy St. Patrick’s day to the Irish (or Irish-for-a-day) among us!

This past week saw Patheon complete their plan of arrangement with JLL/Delta Patheon Holdings, wherein JLL/Delta acquired all outstanding shares of Patheon for US$9.32 cash a share. The 2 entities have now been amalgamated and will operate under Patheon Inc., with DSM Pharmaceutical Products also now combined with Patheon.

M&Eh

Patheon Inc. (TSX: PTI) (“Patheon”) announced the completion of the previously announced statutory plan of arrangement (the “Arrangement”) under section 192 of the Canada Business Corporations Act, pursuant to the arrangement agreement between Patheon and JLL/Delta Patheon Holdings, L.P. (“DPx”) dated November 18, 2013. Pursuant to the Arrangement, DPx indirectly acquired all of the issued and outstanding restricted voting shares of Patheon at a price of US$9.32 cash for each share. Patheon was amalgamated with JLL/Delta Canada Inc., an indirect subsidiary of DPx, and will continue to carry on business under the name “Patheon Inc.” In connection with the completion of the Arrangement, DSM’s DSM Pharmaceutical Products (“DPP”) business group was combined with Patheon.

Financing

Merus Labs International Inc. (TSX: MSL) (“the Company”) announced that it has entered into an agreement with a syndicate of investment dealers (the “Underwriters”) pursuant to which the Underwriters have agreed to purchase 11,765,000 common shares (“Shares”) from the treasury of the Company, at a price of $1.70 per Share and offer them to the public by way of prospectus supplement (the “Offering”). In addition, the Company has granted the Underwriters an option (“Over-Allotment Option”) to purchase up to an additional 1,764,750 Shares from the treasury of the Company at the offering price exercisable at any time up to 30 days following Closing (as defined below), for market stabilization purposes and to cover over-allotments, if any. Closing of the Offering is expected to occur on or about March 20, 2014.

Zenith Epigenetics Corp. (“Zenith”) announced that it has closed a private placement of 8,000,000 common shares at a price of US$1.00 per share for gross proceeds of US$8,000,000 (the “Private Placement”) to Eastern Capital Limited (“Eastern”) and NGN BioMed Opportunity II, L.P. (“NGN”). Eastern and NGN subscribed for 6,000,000 and 2,000,000 common shares, respectively. After giving effect to the Private Placement, Eastern and NGN hold 19,200,000 and 8,769,339 common shares, respectively, of Zenith, representing approximately 22.9% and 10.5%, respectively, of Zenith’s issued and outstanding common shares. Eastern and NGN also hold 2,048,640 and 1,683,665 common share purchase warrants of Zenith, respectively.

California Nanotechnologies Corp. (TSX-V: CNO) (the “Company”) announced a proposed non-brokered private placement of up to 6,666,666 units of the Company at a price of $0.135 per unit for aggregate gross proceeds of up to $900,000. Each unit consists of one common share in the capital of the Company (a “Common Share”) and one-half of one common share purchase warrant.  Each whole warrant will entitle the holder thereof to purchase one additional common share at a price of $0.225 per share for a period of twelve months from the date of issue.

SQI Diagnostics Inc. (the “Company”) (TSX-V: SQD) announced it has filed and received a receipt for a preliminary short form prospectus in connection with a proposed offering of units of the Company. Each unit will be comprised of one common share and a fraction of up to one common share purchase warrant. The offering will be pursued on a best efforts basis pursuant to an agency agreement to be entered into between the Company and Euro Pacific Canada Inc. (the “Agent”) in each of the provinces of Ontario, British Columbia and Alberta. The number of units to be distributed under the offering, the price and composition of each unit and the exercise price of each common share purchase warrant will be determined in the context of the market by the Company and the Agent prior to filing the final short form prospectus.

Cardiome Pharma Corp. (TSX: COM) (the “Company”) and CarCor Investment Holdings LLC (“CarCor”) the closing of their previously announced bought deal prospectus offering of 1,500,000 common shares from treasury of the Company for gross proceeds of C$15 million (the “Primary Offering”) and 1,500,000 common shares in a secondary offering from CarCor for gross proceeds of C$15 million (the “Secondary Offering”), both at C$10.00 per common share, for a combined offering of C$30 million (collectively, the “Offering”). The Offering was made on a bought deal basis pursuant to an underwriting agreement with Canaccord Genuity Corp., acting as sole bookrunner and co-lead underwriter, and Cormark Securities Inc., acting as co-lead underwriter (together, the “Underwriters”). The Underwriters received a cash commission of 6.0% of the gross proceeds raised through the Offering.

Concordia Healthcare Corp. (“Concordia”) (TSX: CXR) announced that it has closed its previously announced short form prospectus offering, on a “bought deal” basis, of 5,750,000 common shares (the “Common Shares”) of Concordia, which includes the exercise by the Underwriters (as defined below) of an over-allotment option of 15%, for aggregate gross proceeds of $67,562,500 (the “Offering”). The Offering was completed at a price per Common Share of $11.75 by a syndicate of underwriters co-led by GMP Securities L.P. and Canaccord Genuity Corp. and including Barclays Capital Canada Inc., Beacon Securities Limited and Cormark Securities Inc.

Easton Pharmaceuticals Inc. (OTC: EAPH) announced it is nearing its limit on financing under regulation offerings. The company is now moving towards a Reg A filing to raise an amount up to $5,000,000 per year from an accredited investor on a best efforts basis. In other events, Easton has closed on an agreement for Medical Marijuana. Easton Pharmaceuticals announces it has come to terms on its negotiations with one of its proposed medical marijuana partners. The companies are now in the process of drafting a final agreement. Complete details to be disclosed on a subsequent press release to be announced when fully completed and executed.

Medifocus, Inc. (TSX-V: MFS) announced the closing of the second tranche of $2 million of its previously announced $6 million convertible debenture financing. The first tranche of $3,540,000 was completed on December 18, 2013. The current financing consists of 200 units at a price of $10,000 per unit (the Units). Each Unit consists of (i) a $10,000 redeemable promissory note (“Note”), bearing 8% annual interest payable on a quarterly basis, which are convertible into 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 (“Series C Warrants”) to purchase 20,000 common shares at a price of $0.30 per share for a period of 36 months following the completion of the Offering. Medifocus will pay finder’s fees of $161,100 in cash and issue 644,400 finder’s Warrants in respect of the financing.

ProMetic Life Sciences Inc. (TSX: PLI) (“ProMetic”) announced that it has received approximately $3.2 million via the repayment of the amended and restated loan entered into in March, 2010 by ProMetic and InvHealth Holding Inc. (“Invhealth”), a corporation wholly-owned and controlled by Mr. Pierre Laurin, President and Chief Executing Officer of ProMetic (the “Loan”). The Loan was repaid prior to its March, 2016 deadline following discussions initiated by ProMetic’s Board of Directors, which were led by ProMetic’s Chairman of the Board, Mr. Kym Anthony. The combination of the existence of legal conditions for early repayment of the Loan as well as the opportunity for the Corporation to access non-dilutive capital to further advance its orphan drug pipeline in the clinics led to the mutual decision of the parties to repay said Loan at this time. 

Other

Vida Cannabis Corp. (“Vida Cannabis”) announced the accelerated closing of the purchase of the Stellarton facility by its wholly owned subsidiary Vida Cannabis (Canada) Ltd. The new closing date will now be by the end of March 2014 instead of April 15, 2014. The Town and its representatives were exceedingly cooperative during the process, with the Town providing its approval at the Council Meeting on March 10, 2014.

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