Welcome to your Monday Biotech Deal Review for March 31, 2014!
Hit the break to see our summary of the past weeks’ biotech news.
Avidus Management Group Inc. (TSX-V: AVD) announced that it has made the $400,000 payment required under the asset purchase agreement (the “Agreement”) with Akea, LLC (“Akea”). Asantae will now be able to proceed to full integration of the Asantae and Akea sales organizations, product lines and systems.
Concordia Healthcare Corp. (the Company) (TSX: CXR) announced that it has entered into a definitive agreement to acquire Donnatal®, an adjunctive therapy in the treatment of irritable bowel syndrome (“IBS”) and acute enterocolitis, from a privately held specialty pharmaceutical company carrying on business as Revive Pharmaceuticals (“Revive Pharmaceuticals”). The Company has agreed to acquire Donnatal® for US$200 million in cash and an aggregate of 4,605,833 common shares of Concordia. Management plans to pay for the cash component of the acquisition through a combination of available cash and debt financing. Accordingly, the Company has entered into a commitment letter with GE Capital, Healthcare Financial Services and its affiliated entities (“GE”). Pursuant to the commitment letter, GE has agreed to provide a secured credit facility having a principal amount of up to US$195 million, consisting of a $170 million term loan and a $25 million operating line (the “Credit Facility”).The Credit Facility will be secured by the assets of the Company and the assets of its subsidiaries.
LW Capital Pool Inc. (“LW CPI”) (TSX-V: LWI.H) and Tweed Inc. (“Tweed”) announced that they have entered into an agreement (the “Definitive Agreement”) setting out the terms upon which Tweed will complete a reverse takeover of LW CPI (the “Transaction”). The signing of the Definitive Agreement follows a previously announced non-binding letter of intent between the parties dated as of January 2, 2014. On closing of the Transaction LW CPI will change its name to Tweed Marijuana Inc. The Transaction will be structured as a three cornered amalgamation in which Tweed will amalgamate with 2405882 Ontario Inc., a wholly owned subsidiary of LW CPI formed solely for the purpose of facilitating the Transaction. The amalgamated company will be a wholly owned subsidiary of Tweed Marijuana Inc., will continue to be named Tweed Inc., will have the same board of directors and officers as Tweed (unless and until changed in accordance with the requirements of the MMPR) and will continue to conduct Tweed’s operations.
Hamilton Thorne Ltd. (TSX-V: HTL) announced that it has granted a total of 1,450,000 stock options to purchase common shares pursuant to the Company’s incentive stock option plan. The options are exercisable at Cdn$0.05 per share, and expire ten years from the date of grant. A total of 1,100,000 of these options were granted to the Company’s Directors, CEO, CTO and CFO. Grants to non-employee Directors vest over three years; grants to employees vest over four years.
Knight Therapeutics Inc. (“Knight”) (TSX-V: GUD) announced that it has entered into a letter agreement with a syndicate of underwriters co-led by GMP Securities L.P. and Cormark Securities Inc. (collectively, the “Underwriters”), and including Bloom Burton & Co. as a selling group member, pursuant to which the Underwriters have agreed to purchase, on a private placement basis, 14,300,000 special warrants (the “Special Warrants”) of the Company at a price of $5.25 per Special Warrant (the “Offering Price”) for aggregate gross proceeds to Knight of $75,075,000 (the “Offering”). Each Special Warrant will be exercisable into one common share in the capital of Knight (the “Common Shares”) for no additional consideration. The Special Warrants will be deemed to be exercised upon the earlier of: (i) a date that is no later than the fifth business day after the date of issuance of a receipt for a final prospectus qualifying the issuance of Common Shares underlying the Special Warrants; and (ii) four months and one day following the closing of the Offering. The Offering is expected to close on or about April 10, 2014. Knight subsequently announced it has amended the terms of its previously announced private placement bought deal offering of special warrants of Knight (“Special Warrants”) to increase the size of the offering to approximately $180 million (the “Offering”). Under the amended terms of the Offering a syndicate of underwriters co-led by GMP Securities L.P. and Cormark Securities Inc. (collectively, the “Underwriters”), and including Bloom Burton & Co. as a selling group member, have agreed to purchase, on a bought deal private placement basis, an aggregate of 34,300,000 Special Warrants at a price of $5.25 per Special Warrant for gross proceeds of approximately $180 million.
Miraculins Inc. (TSX-V: MOM) (“Miraculins”) announced that it has closed the third tranche under the non-convertible secured loan with a third party lender (the “Lender”), receiving an advance of CDN$150,000 from the Lender. Under the third tranche of the Loan, the Lender purchased a promissory note with a principal amount of CDN$166,667 for a purchase price of CDN$150,000. All amounts owing under the Loan will be due and payable on December 31, 2014 and will bear interest of 12% per annum, payable quarterly. In addition, any overdue payment will bear additional interest at a rate of 6% per annum, for a combined interest rate of 18% per annum on any overdue payment. As consideration for providing the third tranche of the Loan, Miraculins issued 75,758 common shares to the Lender. To correct a prior miscalculation, an additional 17,172 common shares were also issued in connection with the second tranche of the Loan, previously announced on February 10, 2014.
Antibe Therapeutics Inc. (the “Corporation”) (TSX-V: ATE) announced its intention to complete a non-brokered private placement of 5,000,000 Common Shares of the Corporation at a price of $0.60 per Common Share for gross proceeds of $3,000,000 (the “Offering”). The Offering is expected to close on or about March 28, 2014, subject to TSXV approval, and to the satisfaction of customary closing conditions. The Offering will be made as a non-brokered private placement, exempt from prospectus and registration requirements of applicable securities laws and the securities to be issued will be subject to a four-month hold period.
Cynapsus Therapeutics Inc. (TSX-V: CTH) announced that it has filed a preliminary short form prospectus (the “Prospectus”) with the securities regulatory authorities in the Provinces of British Columbia, Alberta and Ontario in connection with a best efforts offering of common shares and warrants of Cynapsus for gross proceeds of $15 million to $25 million (the “Offering”). The Company has retained M Partners Inc. to lead the Offering (the “Agent”). An agency agreement for the Offering will be entered into by the Company and the Agent. The first closing of the Offering is expected to close on or about April 18, 2014.
RepliCel Life Sciences Inc. (the “Company”) (TSX-V: RP) announced it intends to undertake a brokered private placement financing, on a commercially reasonable basis, of up to 10,000,000 units (each, a “Unit”) at a price of $0.75 per Unit for gross proceeds of up to $7,500,000. Each Unit will consist of one common share of the Company (each, a “Share”) and one share purchase warrant, which will entitle the holder to purchase one additional Share for a period of two years from the closing of the private placement at a price of $1.00 per Share during the first year and $1.25 per Share during the second year. Wolverton Securities Ltd. is acting as the sole lead agent in connection with this brokered financing. Part of the private placement may be completed on a non-brokered basis.
Lorus Therapeutics Inc. (TSX: LOR) (the “Company”) announced that, in connection with its previously announced overnight marketed public offering (the “Offering”), it has entered today into an underwriting agreement with a syndicate of underwriters led by RBC Capital Markets and including Roth Capital Partners and Cormark Securities Inc. (collectively, the “Underwriters”) to sell 50,000,000 common shares of the Company (the “Common Shares”) at a price of $0.50 per Common Share (the “Offering Price”), for aggregate gross proceeds of $25,000,000. In addition, the Company has granted to the Underwriters an over-allotment option to purchase up to 7,500,000 additional Common Shares at the Offering Price (the “Over-Allotment Option”). The Over-Allotment Option may be exercised at any time up to 30 days following the closing of the Offering. The Common Shares will be offered in all of the provinces of Canada, excluding Quebec, by way of short form prospectus, and may also be offered in other jurisdictions in a manner permitted by applicable securities laws. The Offering is expected to close on or about April 10, 2014.
Microbix Biosystems Inc. (TSX: MBX) announced it has made application to the TSX to extend the term of an aggregate of 2,990,641 common share purchase warrants (the “Warrants”) which were issued in connection with Microbix’ March 29, 2012 non-brokered private placement. Each Warrant currently entitles the holder to purchase one common share of Microbix at a price of $0.40 until March 29, 2014. Microbix has applied to the TSX to extend the term of the Warrants and Finders Warrants to March 29, 2015.
Savaria Corporation (“Savaria”) (TSX: SIS) announced that it has entered into an agreement with Laurentian Bank Securities Inc. pursuant to which Laurentian Bank Securities has agreed to purchase, on a bought-deal private-placement basis, 5,000,000 units of Savaria (the “Units”) at a price of $3.25 per Unit for gross proceeds to Savaria of $16,250,000 (the “Offering”). Each Unit will be comprised of one common share and one-half of a common share purchase warrant of Savaria. Each full warrant will entitle its holder to subscribe for one additional common share of Savaria at an exercise price of $4.25 for 36 months from the closing date of the Offering. The issue price of the Units represents a discount of approximately 8% to the current market price of Savaria’s common shares and the exercise of the warrants comprised in the Units represents a premium of approximately 21% to such market price. The Offering is expected to close on or about April 15, 2014.
Arch Biopartners Inc. (the “Company”) (CNSX: ACH) announced it has raised $155,960 via a non-brokered private placement of 557,000 Units at a price of $0.28 per Unit. Each Unit comprises of one common share and one common share purchase warrant. Each warrant allows the holder to purchase an additional common share at $0.50 cents during the 24 month period following the close of the private placement.
Biosenta Inc. (CNSX: ZRO) announced that it has completed a multi-level financing agreement with Bassett Financial Corporation (“BFC”), based in Toronto. The Terms of the Agreement include: a six-month, $550,000 Bridge Loan used to fund additional sales and marketing activities in Canada and to fund shooting of an infomercial for US markets; an initial $200,000 Factoring line-of-credit based on receivables from sales to large Canadian and US retail chains, with an intention to increase the facility as required; an agreement to fund $1 million or more of common equity upon certain Canadian sales, and the receipt of approval for sale in the US from the Environmental Protection Agency (“EPA”), expected within the next 5 months; an agreement to fund $2 million or more of common equity upon additional US sales targets being achieved, expected before the end of 2014; a Corporate Finance Advisory Agreement whereby BFC will assist the company in restructuring its balance sheet, work with Biosenta to revise the business plan toward achieving high growth sales in Canada and the US; and to provide multi-faceted assistance in leveraging the public listing potential of the company by directing activities more toward future institutional investors; nomination of BFC CEO, Matthew Bassett to the Board of Directors of Biosenta.
Commercial & Other Agreements
Cardiome Pharma Corp. (TSX: COM) announced that Cardiome International A.G., a subsidiary of Cardiome Pharma Corp., has entered into an agreement with VIANEX, S.A., headquartered in Erythrea, Greece, for the commercialization and distribution of BRINAVESS™ (vernakalant IV) in Greece. Under the terms of the agreement, VIANEX has agreed to specific annual commercial goals for BRINAVESS. The initial term of this commercial agreement is for the duration of three years, and is renewable for another three year term thereafter. Financial details of the agreement have not been disclosed.
Pacgen Life Science Corporation (the “Company”) (TSX-V: PBS) announced that it has closed its previously announced partnership agreement (the “Agreement”) with General Biologicals Corporation (“GBC”). Under the terms of the Agreement, Pacgen has granted GBC its worldwide exclusive right to develop and commercialize prescription and non-prescription pharmaceutical products containing PAC-113 or one or more related peptides for the treatment of any oral condition (excluding transitional skin-mucous membrane areas), as well as vaginal, dermatological and ophthalmic conditions. In exchange, GBC has paid an upfront payment and will pay minimum annual royalty payments. GBC will also pay Pacgen milestone payments and royalty payments linked to marketing approvals and product sales, respectively.
SQI Diagnostics Inc. (TSX-V: SQD) announced that it has expanded its previously announced product development relationship with a global pharmaceutical company (“Global Pharma 1″) to develop a custom multiplex test to support the pharmaceutical company’s clinical drug development activities, through the entering into of a revenue-generating agreement with Global Pharma 1 to develop a 21-plex protein microarray.
Cardiome Pharma Corp. (TSX: COM) announced that the company has entered into a distribution agreement with Logista Pharma S.A., headquartered in Madrid, Spain, to distribute BRINAVESS™ (vernakalant IV) within the Spanish market. The state-of-the-art processes developed by Logista Pharma will ensure secure and timely fulfillment of BRINAVESS orders to all our hospital customers. Financial details of the agreement were not disclosed.
Microbix Biosystems Inc. (TSX: MBX) announced that it has reached an agreement with an existing, long-term customer to supply significantly increased antigen volumes. This customer has secured incremental business for their infectious disease tests and, as a result, requires more antigen supply from Microbix. This agreement represents an annual sales increase of more than $2 million. Shipments are expected to commence in the next fiscal quarter.
Amorfix Life Sciences (TSX: AMF) announced that it has entered into a collaboration with Trellis Bioscience to develop antibodies against misfolded CD38 protein as a treatment for haematological malignancies including leukemia and lymphoma. Trellis is a private, South San Francisco-based therapeutic antibody company formed around a breakthrough discovery platform capable of isolating therapeutic grade antibodies directly from the blood cells of humans.
Medifocus Inc. (the “Company”) (TSX-V: MFS) announced that it has entered into an Engagement Agreement (the “Agreement”) with New York City based Maxim Group LLC (“Maxim”) whereby Maxim will act as the Company’s exclusive placement agent for a private placement of the Company’s securities (the “Proposed Offering”). The Agreement is in effect until October 31, 2014, after which time either party may terminate the Agreement upon thirty 30 days prior written notice to the other party. Pursuant to the Agreement, the offering will be made on a best efforts basis and the terms of the offering will be determined by the Company and Maxim.
Vida Cannabis Corp. (“Vida Cannabis”) announced the Company’s wholly owned Canadian subsidiary, Vida Cannabis (Canada) Ltd. (“Vida Canada”), has closed in escrow on the $500,000 purchase of the 315,000-square-foot former production plant located at 114 Acadia Avenue, Stellarton, Nova Scotia. The Town of Stellarton has granted Vida Canada immediate access to the building in order to begin renovations. It is Vida’s intention to build a long-term relationship with the community of Stellarton, an intention that appears to be mutual and evident in Stellarton’s 50-year consent to Vida Canada’s operations in its jurisdiction.
Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the “Company”) announced that its shelf registration statement on Form F-3 previously filed with the Securities and Exchange Commission (the “SEC”) has been declared effective by the SEC. Under the shelf registration statement, the Company may offer and sell from time to time, in one or more public offerings in the United States, up to $50 million of common shares in one or more “at-the-market” (“ATM”) distribution programs, during a 36-month period.