Welcome to your Monday Biotech Deal Review for November 14, 2011, marking the end of its one month hiatus. The Monday Biotech Deal Review will now be resuming its normal weekly schedule. Below are summaries of recent transactions over the past month, which includes the acquisition of Afexa by Valeant for $0.85 per Afexa share, in cash. Read on to learn more.
Investment
iCo Therapeutics Inc. (TSXV: ICO.V) has completed its $1,115,000 non-brokered private placement of 5,575,000 ($0.20) units. Each unit is comprised of one common share and one common share (2-year) warrant. The warrant is exercisable at $0.30 for the first year and $0.25 for the second year. Net proceeds will be used to fund Phase 2 of the iCo-007 clinical program, and as working capital and general corporate purposes. A finder’s fee of 8% and 2,400,000 broker warrants will be paid pursuant to the placement.
Medicago Inc. (TSX: MDG) announced that Philip Morris Investments B.V. (NYSE: PM) has entered into a 34,550,000 ($0.65) subscription agreement to complete a private placement of $22.5 million in two tranches. The first tranche of 17,350,000 has been completed for proceeds of $11,277,500. Medicago will hold a shareholders meeting in December to approve the second tranche. After the closing of both tranches, Philip Morris will control 40% of Medicago. Net proceeds of the placement will be used to continue clinical development of Medicago’s plant-based manufactured VLPs vaccines, to fund additional product candidates and other general corporate and working capital purposes.
SQI Diagnostics Inc. (TSXV: SQD) has completed its $4.552 million non-brokered private placement of 2,276,000 ($2.00) units. Each unit consists of one common share and one common share (2-year, $2.50) warrant. Each warrant comes with a (20-day, $3.25) VWAP trigger. The proceeds will be used to fund product development, commercialization, sales and marketing, and general working capital. A 6% finder’s fee and 85,040 (2-year) warrants were issued to Kingsdale Capital Markets Inc.
Theralase Technologies Inc. (TSXV: TLT) has closed its previously announced $420,000 non-brokered private placement of 1,050,000 ($0.40) units. Each unit is comprised of one common share and a one-half (2-year, $0.60) warrant. Proceeds will be used as working capital.
Theralase Technologies Inc. (TSXV: TLT) is offering up to 750,000 ($0.40) units in a non-brokered private placement. Each unit is comprised of one common share and a one-half (2-year, $0.60) warrant. The $300,000 in proceeds are to be used for working capital purposes. Update: Theralase increased the offering to 1,250,000 units to meet high investor demand, yielding proceeds of $500,000.
DLVR Therapeutics Inc. has completed its $2 million cash and in-kind support seed round investment. Investors include MaRS Innovation, the University Health Network and the Ontario Institute for Cancer Research. The funds will be used by DLVR to advance its small molecule chemotherapeutic program and its small interfering RNA program.
Quest PharmaTech Inc. (TSXV: QPT) has closed its $600,000 non-brokered private placement of 10,000,000 ($0.06) units. Each unit is comprised of one common share and a one common share (2-year, $0.10) warrant. Proceeds will be used to finance its drug development program and for general corporate purposes.
Allon Therapeutics Inc. (TSX: NPC) has completed the previously announced public offering of 9,767,500 ($0.25) units and 7,663,870 ($0.25) common shares (covered here) for proceeds of $5,441,875. The units are comprised of one common share and a one-half (5-year, $0.40) warrant. The proceeds will be used for clinical trials and general administrative expenses, working capital and general corporate purposes.
PharmaGap Inc. (TSXV: GAP) has closed its private offering of 2,190,000 ($0.08) units for proceeds of $175,210. $10,513 in fees and 131,400 broker warrants were paid in connection with the closing. The initial closing took place on September 22nd (covered here).
Securities
Kane Biotech Inc. (TSXV: KNE) intends to extend the exercise period of 3,166,000 outstanding ($0.13) warrants to June 1, 2012. The warrants remain callable if the shares trade at or above $0.20 for any 20 out of 30 consecutive trading days.
Spectral Diagnostics Inc. (TSX: SDI) has received TSX approval for a normal course issuer bid for 2,227,667 common shares, or 2% of all issued and outstanding shares, by November 14, 2012. Spectral pay purchase up to 14,535 shares on the TSX per trading day, excluding block purchase exemptions.
GeneNews Limited (TSX: GEN) has obtained shareholder approval for a proposed 1:6 consolidation of common shares, to occur no later than January 31, 2012.
M&Eh
Merus Labs International Inc. (CNSX: MR) and Envoy Capital Group Inc. (TSX: ECG, NASDAQ: ECGI) have agreed to amalgamate on or about December 13, 2011, whereby Merus and Envoy shares will be exchanged for Amalco common shares at 4:1 and 1:1, respectively. A condition of the amalgamation is that Envoy complete a private placement of 4,500,000 ($2.00) units comprised of one Envoy share and one half of a ($3.00) warrant with a 30-day, $4.00 trigger. Proceeds are to be used for general working capital and to implement Amalco’s business plan. Envoy and Merus shareholders will hold 51% and 49% of Amalco respectively, on a non-diluted basis.
Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) announced that it took up 8,523,517 additional common shares of Afexa Life Sciences Inc. deposited at the expiry time of the offer by its wholly-owned subsidiary 1625907 Alberta Ltd. to acquire all outstanding common shares of Afexa. Afexa shareholders who tendered to the offer will receive $0.85 per share in cash. Valeant now controls 81.6% of outstanding Afexa shares on a fully-diluted basis. Valeant also now controls sufficient votes to privatize Afexa and buy-out remaining shareholders. A special meeting to approve the transaction will be held in December, following which Afexa’s shares will be delisted from the TSX and Afexa will cease to be a reporting issuer.
Valeant Pharmaceuticals International, Inc. (NYSE: VRX, TSX: VRX) acquired approximately 73.8% of all outstanding common shares of Afexa Life Sciences Inc. pursuant to its previously announced offer (covered here). Shareholders will receive $0.85 per share in cash. Valeant intends to privatize Afexa, as set out in the terms of the offer. Valeant has also completed the previously announced refinancing of the senior secured credit facilities (covered here) of its wholly owned subsidiary Valeant Pharmaceuticals International, upsizing the facilities to $2 billion. They are comprised of a $1.725 billion Term Loan A facility, which includes a $500 million delayed draw term loan facility, and a $275 million revolving credit facility. A portion of the borrowings will be used to repay bridge loans and revolving loans under prior facilities, and to pay fees and expenses.
Debt Financing
Cynapsus Therapeutics Inc. (TSXV: CTH) has arranged a second closing financing of $172,414 in Series E Debentures bearing annual interest of 10% and secured against Cynapsus assets. The debentures are payable by March 31, 2012. A 13% capital discount will be paid to debenture holders resulting in proceeds of $150,000 and the issue of 600,000 ($0.05) common shares to debenture holders. Cynapsus intends to complete additional Series E debenture financings up to $1.3 million by December 31, 2011. Proceeds will be used to fund R&D of Cynapsus’ anti-Parkinson’s disease APL 130277 product, repayment of Series B debentures, working capital and general corporate purposes. The Series E-2 debentures have an equal rank with the Series E-1 and Series D debentures, and rank ahead of the Series A and Series C debentures.
MedX Health Corp., (TSXV: MDX) has closed its $243,000 non-brokered private placement of redeemable notes convertible at $0.10 in year 1 and $0.25 in year 2, for a maximum of 2,430,000 common shares. The notes mature in 2 years and pay 10% interest in arrears every six months. Proceeds will be used for general working capital purposes.
Licensing and other Commercial Developments
Les Laboratoires Servier and Prognomix Inc. have entered into a research and development agreement to identify targets as part of programs meant to develop innovative type 2 diabetes and metabolic disease treatment. The collaboration rests on the genomic and bioinformatics discovery platform developed by Prognomix. As part of the agreement, Servier will make a contract signature fee payment and will be granted options to obtain rights to use the results of the collaboration.
Arch Biopartners Inc. (CNSX: ACH, OTC:FOIFF.PK) has engaged Intertek Cantox to devise a drug development plan for the ant-lung and pancreatic cancer compound GH501a, that will detail the steps to be completed in order to submit an Investigational New Drug application and pursue subsequent human trials.
Functional Technologies Corp. (TSXV: FEB) has entered into a six-month services agreement with San Diego Torrey Hills Capital, Inc., to provide investor relations services. Torrey Hills Capital will also develop a profile on Functional Technologies for coverage on the micro-cap company investor showcase website www.babybulls.com. Torrey will receive a monthly fee of US$6,000 and 100,000 ($0.46) options.
Amorfix Life Sciences Ltd. (TSX: AMF), is collaborating with Helix BioPharma Corp. (TSX: HBP) to develop novel therapeutics against cancers associated with mis-folded prion protein.
Noveko International Inc. (Toronto: EKO.TO) has won contracts of an aggregate of $380,000 with four Quebec swine companies to equip pig farms with air filtration solutions.
Interface Biologics Inc. has signed a definitive license and supply agreement with Navilyst Medical, whereby Navilyst will have exclusive access to incorporate Interface’s anti-thrombogenic Endexo™ technology in its vascular access products.
Soricimed Biopharma Inc., has in-licensed a proprietary peptide technology from the University Health Network.
Premier Diagnostic Health Services Inc. (CNSX: PDH) has negotiated terms for a Memorandum of Understanding with Zhejiang Dongyang Traditional Chinese Medicine Hospital in Zhejiang Province which is now in the process of being executed.
Pantheon, Inc. (TSX: PTI) has been awarded two type II diabetics pharmaceutical manufacturing projects from Boehringer Ingelheim for $18 million over 3 years.
Medicure Inc. (TSXV: MPH.H) has graduated from the NEX to the TSXV as a Tier 2 issuer. Medicure’s trading symbol will also change from MPH.H to MPH.
Special thanks to Keldeagh Lindsay for help with this week’s Monday Biotech Deal Review!
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