The Cross-Border Biotech Blog

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

Tag Archives: Colabor Income Fund

Monday Deal Review: August 31, 2009

B&W_BigNickelThis week Canada seems to have accounted for a significant chunk of the Western Hemisphere’s biopharma deal activity … by numbers, anyway. By dollars, all is dwarfed by the $3.1 billion Proctor & Gamble/Warner Chilcott deal, but don’t let that stop you from reading on after the jump…

Monday Deal Review: August 24, 2009

Another Biotech Windfall from the SIFT Tax: Vasogen Molts for Cervus and Merges with IntelliPharmaCeutics. Shareholders Applaud.

Canadian moneyIn July, we covered the deal ConjuChem Biotechnologies Inc. (TSX: CJB) made with Colabor Income Fund (TSX: CLB.UN), where ConjuChem got $5 million and the Income Fund got a public corporate shell.  ConjuChem had $8.7 million in the bank in April, but was burning it fast (pdf).

Noting at the time that ConjuChem shareholders did not react well to the deal (they still haven’t), we wondered whether future income trusts would find biotech partners willing to try the structure again. Well, the answer is “yes.”

Vasogen Inc. (NASDAQ: VSGN; TSX: VAS), which has been trading under $0.20 since releasing its Q2 results and cutting back to one employee in July, is giving its shell to Cervus LP (TSXV: CVL.UN) unit holders in exchange for $7.5 million.  Cervus is a public LP, but it’s caught by the same Canadian tax change — the SIFT tax — as income trusts, which is what is driving these entities to seek the shells of public corporations.  Vasogen shares have doubled so far today.

What does the Vasogen deal have that the ConjuChem deal lacked? Two things: more cash and a brighter future.

  • More Cash: ConjuChem got $5 million for its shell but Vasogen is getting $7.5 million.
  • A Brighter Future: Unlike ConjuChem, which planned to use its windfall to continue its existing programs, Vasogen leveraged its cash into a deal for 14% of IntelliPharmaCeutics (IPC).

IntelliPharmaCeutics has: a lead product (a generic version of Focalin XR®) that is partnered with Par Pharmaceutical and has an ANDA filed; a generic version of Coreg CR, a high blood pressure medication, that is ready for entry into bioequivalence studies, and a platform for abuse- and alcohol-resistant drug delivery technology that can build a nongeneric product pipeline.

Now IntelliPharmaCeutics will also have extra cash and access to public markets.  Everybody wins (though I assume that if Vasogen is not successful in its conversations with NASDAQ, there will be some problems).

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Monday Deal Review: August 17, 2009

B&W_BigNickelIn addition to the highlights already noted — Enobia’s $50 million r0und, and the LOM – BioQuest joint venture — there was plenty of other Canadian deal activity this week.  Check it out after the jump…

Monday Deal Review: July 12, 2009

B&W_BigNickelThe highlights of this week were definitely the Bioniche-Endo deal and Allostera’s $17 million raise, but that was just the tip of the iceberg as Canadian deal activity heated up along with the weather.  A novel deal with an income trust swapping cash for a biotech’s public shell starts things off after the jump…

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