Monday Deal Review: January 21, 2013

Welcome to your Monday Biotech Deal Review for January 21, 2013!  Medicago made news last week with a $15 million loan agreement with an unnamed pharmaceutical company. The funds are being used for Medicago’s plant-based VLP vaccine pipeline. As the agreement provides for potential licensing options with that partner, we will be watching closely to see any further announcements.

YM Biosciences, as it continues with its plan of arrangement transaction with Gilead, has received the endorsement of two proxy firms who have recommended to shareholders that they vote in favour of the transaction. This will likely allow YM Biosciences to obtain the shareholder approval required by statute to be able to continue with the arrangement.

Paladin labs, meanwhile, has closed their acquisition of a controlling stake in Ativa Pharma of Mexicom, and has also in-licensed a new biologic from Apeiron Biologics. Also, last week we saw Theratechnologies conclude their recent issues with the NASDAQ exchange by voluntarily delisting. They remain on the TSX, however.

As always, click through to see more on these deals as well as the rest of last week’s major biotech activity.

M&Eh

Paladin Labs Inc. (TSX: PLB) announced that all of the closing conditions have been fulfilled relating to the acquisition of a controlling stake in Ativa Pharma S.A., as covered previously. The transaction has been completed with effect from January 1, 2013.

YM BioSciences Inc. (NYSE Amex: YMI; TSX: YM) reports that proxy advisory firms Institutional Investor Services and Glass, Lewis & Co. have recommended that shareholders of YM BioSciences Inc.  vote in favor of the previously announced plan of arrangement under which a wholly owned subsidiary of Gilead Sciences, Inc. (Nasdaq: GILD). will acquire YM for U.S.$2.95 per share in cash. In addition, the initial waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired without any action by the Federal Trade Commission or the Antitrust Division of the United States Department of Justice. The Canadian Competition Bureau has also issued a letter stating that it does not, at this time, intend to challenge the completion of the transaction and waived the parties’ obligation to submit a notification.

Investment

Stellar Biotechnologies, Inc. (TSXV: KLH) (OTCQB: SBOTF) has been listed for trading in U.S. on the OTCQB Market under the symbol SBOTF.

Medifocus Inc.  (TSX-V:MFS) has completed its previously announced private placement. The company issued 13,056,997 units at a price of $0.15 per unit for gross proceeds of $1,958,549.55. Each unit is comprised of one common share and one Series D common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.20 for a period of 24 months following the completion of the offering. If, at any time prior to the warrants’ expiration date, the daily volume weighted average trading price of the common shares on the TSX Venture Exchange exceeds $0.75 for at least 10 consecutive trading days, Medifocus may, within 30 days of such occurrence, give an expiry acceleration notice to the holders of warrants and, if it does so, the warrants will, unless exercised, expire on the 30th day after the expiry acceleration notice is given.

Theratechnologies Inc. (TSX: TH) (NASDAQ:THER) intends to seek a voluntary delisting from the NASDAQ Global Market after  (covered here previously). The voluntary decision to delist from NASDAQ was taken following the Board of Director’s detailed review of numerous factors including: the aforementioned NASDAQ letter, the applicable NASDAQ rules and regulations, the benefits generated by the maintenance of the listing, the current company’s share price, the obligation to proceed with a reverse stock-split to maintain the listing, the effect on the company’s share price and shareholdings to proceed with a reverse stock split and the fact that the company’s common shares will continue trading on the Toronto Stock Exchange under. Based on the foregoing factors, the Company no longer sees sufficient value in maintaining its listing on NASDAQ.

Biosign Technologies Inc. (TSXV: BIO)  announced an amendment to the scheduled closing applicable to an additional subscription of 6,000,000 units of the company at a purchase price of $0.05 per unit, which formed part of its previously announced private placement financing (covered here). Each unit is comprised of one common share and one common share purchase warrant. Each common share purchase warrant is exercisable for a two-year period at $0.05 per share during the first 12 months and $0.10 per share in the second twelve months. Under the revised closing schedule, the second 6,000,000 Unit private placement is now scheduled to close as follows: $150,000 on January 28, 2013, $75,000 on February 14, 2013 and $75,000 on March 14, 2013.

Sirona Biochem Corp.’s (TSXV:SBM)(OTCQX:SRBCF)(FRANKFURT:ZSB) stock is now trading on OTCQX®, the under the symbol SRBCF.

Debt Financing

Medicago Inc. (TSX: MDG) a has executed a $15,000,000 loan agreement with a major Pharmaceutical company.  The principal of the loan is repayable on January 14, 2014 but can be extended by Medicago at its option until January 14, 2016 and will bear an interest rate of not more than 10% per year. Interest on this loan will be paid quarterly. Medicago and its partner are continuing discussions to finalize a licensing agreement which may also include co-promotion rights of Medicago vaccines in certain markets and, if successfully concluded will result in the principal of the loan being applied as upfront payments upon the execution of the licensing agreement. In such an event, Medicago will not be required to pay interest on the loan. Whilst Medicago and its Pharma partner are pursuing discussions together under a term sheet, there can be no assurance that any additional transactions will be successfully concluded between Medicago and its partner.

Licensing and Other Agreements

Duchesnay Inc. and Tzamal Medical Group Ltd have signed an agreement whereby Tzamal Medical Group has been granted exclusive rights to distribute and sell throughout the Israeli market the prescription medicine Diclectin® (doxylamine 10 mg/pyridoxine 10 mg delayed-release tablet) indicated for the management of nausea and vomiting of pregnancy (NVP).

Paladin Labs Inc. (TSX: PLB) has entered into an exclusive licensing agreement with Apeiron Biologics AG for APN311, a novel, antibody-based immunotherapy for children with high-risk neuroblastoma. Under the terms of the agreement, Paladin has been granted the exclusive rights to market and sell APN311 in Canada and Sub-Saharan Africa (including South Africa). Further details or financial terms of the transaction were not disclosed

The Centre for Commercialization of Regenerative Medicine (CCRM) has entered into an agreement with Nikon Corporation (TYO:7731) to place the Nikon BioStation CT Integrated Cell Culture Observation System, and related software, in CCRM’s product development facility to perform high throughput studies of patient-derived stem cell responsiveness to test molecules in a controlled environment. Together, CCRM and Nikon will develop new algorithms necessary to capture cellular and molecular events as they unfold. The end result will be the generation of crucial data that should help advance personalized regenerative medicine.

Merus Labs International Inc. (TSX: MSL, NASDAQ: MSLI) announced that through its wholly owned subsidiaries, Merus Labs B.V and Merus Labs Luxco S.à R.L., it entered into promotion and distribution agreements with selected partners in certain European countries for the Company’s Emselex®/Enablex® product. The partner companies and corresponding territories are as follows; POA Pharma Scandinavia AB (Nordic countries defined collectively as Denmark, Norway, Sweden, Finland, and Iceland), Proximum d.o.o (Croatia), and SPCare Lda (Portugal). Under the terms of the agreements, the partner companies have been granted exclusive rights to distribute, market, and sell Emselex®/Enablex® in their respective territories. Although the financial terms of the agreements have not been disclosed, the general structure of the arrangements are such that the partners contribute the local marketing and sales resources in exchange for a portion of the incremental net sales generated above the current annual baseline net sales. For the year 2012, the newly partnered territories had net sales of approximately US$4.5 million.