Monday Deal Review - April 28, 2014

Welcome to your Monday Biotech Deal Review for April 28th, 2014!

The week’s biggest news was the announcement that Valeant has offered a bid to merge with Allergan, Inc., which, if successful, would give Allergan shareholders 43% of the combined company. The transaction would proceed such that each Allergan share would be exchanged for $48.30 in cash and 0.83 shares of Valeant common stock. The bid by Valeant, made in conjunction with hedge fund manager Bill Ackman, has garnered significant media attention, with Allergan recently adopting a shareholder rights plan as it considers its options in response to the bid. Keep reading to get more details on this deal as well as the rest of the week’s major stories.

Valeant Pharmaceuticals International, Inc. (“Valeant”) (NYSE: VRX) (TSX: VRX) announced that it has submitted a merger proposal to the Board of Directors of Allergan, Inc. (NYSE: AGN) under which each Allergan share would be exchanged for $48.30 in cash and 0.83 shares of Valeant common stock, based on the fully diluted number of Allergan shares outstanding. Shareholders will be able to elect a mix of cash and shares, subject to proration. The proposal represents a substantial premium based on Allergan’s unaffected price of $116.63 on April 10, 2014, the day before Pershing Square Capital Management L.P. (“Pershing Square”) crossed the 5% Schedule 13D ownership level and commenced its rapid accumulation program. Allergan shareholders will own 43% of the combined company and thereby continue to participate in the expected value creation of the collective business.

Novadaq® Technologies Inc. (“NOVADAQ”) (NASDAQ:NVDQ)(TSX:NDQ) announced that it has entered into a definitive agreement to acquire all outstanding shares of Aïmago SA (“Aïmago”). Under terms of the agreement, NOVADAQ will pay to Aïmago shareholders, an upfront consideration of US$10 million, which includes US$6.5 million in cash, plus US$3.5 million in NOVADAQ stock. If certain regulatory and commercial milestones are achieved in the future, NOVADAQ may also pay contingent earn out considerations totalling an additional US$2.4 million, which may be satisfied in cash or in NOVADAQ stock at NOVADAQ’s option. NOVADAQ will acquire all of Aïmago’s assets on a cash-free/debt-free basis, including tangible assets and intellectual property assets, which include three owned patent families and four patent families licensed from EPFL. Upon closing, Aïmago will become a fully owned NOVADAQ subsidiary.

Nordion Inc. (TSX: NDN) (NYSE: NDZ) announced that the Ontario Superior Court of Justice (Commercial List) has issued an interim order authorizing, among other things, the holding of an annual and special meeting of the shareholders of Nordion (the “Meeting”). At the Meeting, Nordion shareholders will be asked to approve matters relating to Nordion’s annual general meeting, as well as a statutory plan of arrangement involving the proposed acquisition by Sterigenics, a global leader in sterilization services and a portfolio company of GTCR LLC, a leading private equity firm based in Chicago, Illinois, USA. On March 28, 2014, Nordion announced it had entered into a definitive agreement (the “Arrangement Agreement”) setting out the terms and conditions of the proposed acquisition by Sterigenics, whereby each shareholder of Nordion will receive an aggregate cash consideration of US$11.75 for each Common Share held (the “Arrangement”).

Supreme Pharmaceuticals Inc. (the “Company”) (CVE:SL) announced that it has paid the option price by way of $150,000 in cash and issued 2,000,000 common shares for the previously announced option with respect to the producing medical marijuana facility in the South Okanagan. The common shares issued are subject to trading restrictions until August 25, 2014.

Lorus Therapeutics Inc. (TSX: LOR) (the “Company”) announced that the underwriters have partially exercised their over-allotment option to purchase an additional 6,500,000 common shares of the Company at a price of $0.50 per common share, in connection with the previously announced public offering of common shares of Lorus, which was completed on April 10, 2014. As a result of the exercise of this over-allotment option, Lorus received additional gross proceeds of $3,250,000 and will have raised total gross proceeds of $28,250,000 from its public offering.

Easton Pharmaceuticals Inc. (OTC: EAPH) announced it has received a final draft of its Reg. A SEC document that is set to be filed with the Securities and Exchange Commission later this week. Easton’s Delaware attorney has submitted final changes of the filing to the company’s board for review and comment. The company anticipates submitting the filing with the Securities and Exchange Commission sometime within the next few days or the end of this week. The Reg. A filing is being supported by its current finance partners who in the past 9 months have advanced Easton Pharmaceuticals with $1,000,000 in financing. Once filed with the SEC, the company should receive comments, if any, within 10 to 20 days. The company’s current financing partners have committed to move forward, have asked for an exclusive and believe they will be able to finance the full $5,000,000 over the next year.

Sirona Biochem Corp. (TSX-V: SBM) announced a collaboration with Magellan BioScience Group, Inc. The goal of the collaboration is to prioritize technologies discovered or identified by Magellan BioScience, which require Sirona Biochem’s expertise in stabilization for safe and effective commercial applications. Target markets for potential applications include pharmaceutical, cosmetic, and over the counter (OTC) consumer packaged goods.

Nuvo Research Inc. (TSX: NRI) announced a collaboration involving Ferndale Laboratories, Inc. (Ferndale) and a leading Contract Research Organization (CRO) with significant dermatology experience to develop two topical dermatology products based on Nuvo’s patented Multiplexed Molecular Penetration Enhancer (MMPE™) technology. Under the terms of the collaboration agreement, Nuvo will utilize its proprietary MMPE technology to formulate two patented topical dermatology product candidates. Once the formulations are complete, Ferndale in collaboration with the CRO, will oversee and fund the formulations’ advancement through Phase 2 clinical studies. It is anticipated that the product candidates will then be made available for out-licensing. Licensing revenues, including upfront payments, milestone payments and royalties will be shared by the parties based on a formula that includes compensation to Nuvo for contributing the patented formulations.

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