Some people were on the move this week — not only did Sanofi Canada announce 70 R&D job cuts, but BioMS took on a new banker and Labopharm, CardioComm and GeneNews all get new faces. Despite the fact that it seemed half of the country’s companies and deal-makers were at BIO in Chicago this week, there was still a fair amount of positive deal activity including numerous private placements, commercial agreements and a bit of M&Eh.
Sanofi-aventis Canada announced this week that it will be cutting close to 70 R&D jobs by July. The company said Canada provides inadequate protection for patented medicines, and it cited the International Report on Access to Medicines that ranked Canada 20th out of 25 OECD countries. The announcement called for “industry and governments to partner” to improve the situation.
BioMS Sheds its Clinical Past
BioMS Medical Corp. (TSX: MS) announced further steps towards its goal of becoming a service provider, making direct investments in and advising companies on strategy, financing, mergers & acquisitions, licensing, etc.. BioMS hired healthcare investment banker Nitin Kaushal, most recently from Desjardins, as Executive Vice President and Managing Director; and is changing its name to Medwell Capital Corp.
Dr. Donald Kramer, the former CEO of Northstar Healthcare Inc. (TSX: NHC) announced his intention through Canada Healthcare Acquisition Inc. to make a cash offer to acquire all of the issued and outstanding shares of Northstar for $0.95 per common share, pursuant to a formal takeover bid. The offer represents a premium of approximately 44% to the closing price of Northstar’s shares on May 4, 2010. The offer is conditional on a minimum tender of 51% of the common shares of Northstar on a fully-diluted basis. Dr. Kramer made an offer to acquire all of the issued and outstanding shares of Northstar in February 2009, also at $0.95 per share, which offer was rejected by the board of Northstar who opted instead to conduct a strategic review with the help of an outside financial advisor. In response, Northstar has stated that it has not received an offer from Dr. Kramer, and any offer it receives will be reviewed by the board of directors consistent with their fiduciary duties.
A5 Labs signed a letter of intent to acquire contract research assets, including all equipment and fixtures and intellectual properties, and a novel interferon production technology, including all know how and data from previous clinical trials related to the production of gamma interferon, from Vida Pharma, based in Montreal, Canada, in an all share transaction. Closing is expected on or before June 15, 2010.
Arch Biopartners Inc. (CNSX: ACH) completed acquisitions of Arch Biotech Inc., 1495628 AB Ltd., and 1502440 AB Ltd., completed a $700,000 private placement, and moved its listing from the TSX Venture Exchange to the CNSX. The placement was of comman shares at $0.50 each. The three companies will continue to operate separately as three wholly-owned subsidiaries.
ZoomMed Inc. (TSXV: ZMD), which makes a web app called ZRx Prescriber that permits physicians to use wireless devices to write and deliver scripts, signed an agreement with Cameron Stewart LifeScience Inc. ZoomMed will provide Cameron with an application to print sampling cards, co-payment assistance, and brand loyalty cards for patients using the ZRx Prescriber. ZoomMed also closed the first tranche of a two-stage private placement for gross proceeds of $2,000,000, issuing 10,000,000 shares at $0.20 per share. The final closing is expected before June 11, 2010.
Critical Outcome Technologies Inc. (TSXV: COT) closed the first tranche of a non-brokered private placement of $0.35 units on April 29, 2010 for gross proceeds of $1,063,349. The units consist of one common share and one-half of a (18-month $0.55) warrant. The final tranche is expected to close on or about May 26, 2010. Finders’ fees were paid in the aggregate cash amount of $36,933 and 105,607 in (18-month $0.40) warrants.
NexgenRx Inc. (TSXV: NXG) has agreed to amend the terms of its previously issued $500,000 secured convertible debenture. The principal terms are (a) and extension of the maturity date by six months (matures October 12, 2010); (b) interest fixed at a rate of 8%; (c) conversion price fixed at $0.35. The changes have been approved by the Toronto Stock Exchange.
Cynapsus Therapeutics Inc. (TSXV: CTH) announced the terms and conditions of a previously announced private placement, which will remain as initially set. Units are priced at $0.10 per unit, for gross proceeds of up to $2,500,000, with each unit consisting of one common share and one-half of a (2-year $0.125) warrant. Wellington West Capital Inc. is lead placement agent.
Innovotech Inc. (TSXV: IOT) put a shareholder rights plan in place. Just prudent public company practice?
Commercial and Licensing Deals
IntelGenx Technologies Corp. (TSXV: IGX) (OTCBB: IGXT), through its subsidiary IntelGenx Corp., signed a memorandum of agreement with Pillar5 Pharma Inc. under which IntelGenx will use best efforts to ensure that distributors of IntelGenx’ oral solid dose pharmaceutical products are directed to Pillar5 for the negotiation of manufacturing agreements with Pillar5 for IntelGenx’ products. As consideration, IntelGenx gets 10% of Pillar5’s equity which is to be held in escrow and are forfeitable by IntelGenx until Pillar5 reaches certain revenue targets. IntelGenx has a right of first refusal in the event that Pillar5 seeks to sale all of its shares or substantially all of its assets. In addition, Pillar5 may nominate one director to serve on the board of IntelGenx Technologies Corp., and IntelGenx Corp. may nominate one director to serve on the board of Pillar5.
Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI) (TSX: ANP) entered an exclusive distribution agreement with B. Braun for its proprietary Quill(TM) SRS knotless suturing system product line in the United Kingdom, Ireland, and France. The term of the distribution agreement will be for five years.
Stellar Pharmaceuticals Inc. (OTCBB: SLXCF) signed a licensing agreement for the distribution and sale of Uracyst® for the treatment of interstitial cystitis/painful bladder syndrome in Portugal with CPH Companhia Portuguesa Higiene. Uracyst® is expected to be launched by CPH in the second quarter of 2010. Under the agreement, CPH will pay Stellar an upfront licensee fee in addition to a transfer price in exchange for the rights to an exclusive license for the territory. The agreement has an initial five-year term and may be renewed for an additional three-year term with the mutual agreement of both parties.
Stellar also signed a licensing agreement for the distribution and sale of Uracyst® in Germany and Austria with medac GmbH. The launch of Uracyst® is expected in third quarter, 2010. Under the agreement, medac will pay Stellar an upfront licensee fee in addition to a specified transfer price in exchange for the rights to an exclusive agreement for this territory. The agreement has an initial five-year term with additional two-year renewal periods.
Grant for Development of “Clinic-Ready Agents”
FightSMA Canada was awarded a $250,000 grant for the research of spinal muscular atrophy from CML Healthcare of Mississauga, which will be matched by the Children’s Hospital of Eastern Ontario providing a total award of $500,000. The multi-year grant will support investigation into “clinic-ready agents” that can increase the presence of Survivor Motor Neuron, a protein that is essential for muscle strength and is deficient in children diagnosed with SMA.
In addition to Nitin’s move to BioMS, Labopharm Inc. (TSX: DDS) (NASDAQ: DDSS) got a new Chief Medical Officer, CardioComm Solutions, Inc. (TSXV: EKG) got a new CEO (their old CFO, now replaced) as Dr. Langer stepped down (but stays as Chair), and GeneNews Limited (TSX: GEN) got a new CFO and some new Board members.
Thanks again to Jacob Cawker for help with this week’s Deal Review!