Monday Deal Review - January 19, 2015

Welcome to your Monday Biotech Deal Review for January 19th, 2015!

This week saw Valeant make news with details on its $1 billion senior unsecured note offering and its approximately $500 million senior note redemption.

For more details on these stories, as well as many more, keep reading!

Centric Health Corporation (“Centric Health”) (TSX: CHH), announced that it will reacquire all of the issued and outstanding shares of Community Advantage Rehabilitation, Inc. (“CAR”) (previously referred to as the Company’s Home Care Operations) and Active Health Services Ltd. (“Active Health”) (previously known as the Company’s Seniors Wellness Operations), which were sold to Lifespan Health and Wellness Limited (“Lifespan”) in May, 2014 for aggregate gross proceeds of $14.5 million. As of November 30, 2014, trailing 12 month revenue for CAR and Active Health was approximately $23.3 million dollars. In consideration for the full repayment of the amounts owing under the two promissory notes previously issued in favour of Centric Health by Lifespan, in the principal amounts of $2.5 million dollars and $12 million dollars, respectively, Lifespan shall transfer all of the shares of CAR and Active Health to Centric Health (the “Transaction”). Completion of the Transaction is subject to certain third party consents and is expected to be completed on or about January 30, 2015. Upon completion of the Transaction, CAR and Active Health are expected to be wholly-owned direct or indirect subsidiaries of Centric Health.

Valeant Pharmaceuticals International Inc., (TSE:VRX) (NYSE: VRX) announced that it has priced its previously announced offering of $1.0 billion aggregate principal amount of 5.50% senior unsecured notes due 2023 (the “Notes”). The offering is expected to close on or about January 30, 2015.  The net proceeds of the offering are expected to be used (i) to finance the redemption of all of the outstanding 6.875% Senior Notes due 2018 issued by the Company’s wholly-owned subsidiary, Valeant Pharmaceuticals International, (ii) to repay all or a portion of the amounts drawn under the Company’s revolving credit facility, and (iii) for general corporate purposes, including acquisitions.  Concurrently with the pricing of the offering, Valeant Pharmaceuticals International has irrevocably called for redemption the remaining approximately $500 million aggregate principal amount of its outstanding 6.875% Senior Notes due 2018.

Valeant Pharmaceuticals International Inc., (TSE:VRX) (NYSE: VRX) announced that its wholly owned subsidiary, Valeant Pharmaceuticals International, will redeem all of the outstanding $499.58 million aggregate principal amount of its 6.875% Senior Notes due 2018, CUSIP Nos. 91911XAN4, U9098VAF9 (the “Notes”) on February 17, 2015 and has mailed an irrevocable notice of redemption for the Notes. On January 15, 2015, a copy of the irrevocable notice of redemption with respect to the remaining Notes was mailed to record holders of the Notes by The Bank of New York Mellon Trust Company, N.A., 400 South Hope Street, Suite 400, Los Angeles, CA 90071, as trustee under the indenture governing the Notes.

Teralys Capital, Canada’s largest fund manager specialized in innovation, is proud to announce a significant $50 million commitment in the $135 million first closing of Montreal-based CTI Life Sciences II (“CTI II”), alongside commitments from Caisse de dépôt et placement du Québec, the Fonds de solidarité FTQ, the Government of Canada Venture Capital Action Plan (“VCAP”), and other investors. CTI II will invest predominantly in syndicated biotherapeutics opportunities, seeking to build great companies that develop assets at the pre-clinical to early clinical phase. Concurrent with the closing of its second fund, CTI has expanded its team and opened a presence in the Northeast USA. Building on the success of its initial fund, CTI II now has access to a larger fund and an international network to successfully pursue its investment strategy.

Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”) announced that the syndicate of underwriters led by GMP Securities L.P. and including Cormark Securities Inc., National Bank Financial Inc., Laurentian Bank Securities Inc., Bloom Burton & Co. Limited, Clarus Securities Inc., Mackie Research Capital Corporation and TD Securities Inc. (the “Underwriters”) has acquired 1,932,420 additional common shares of Knight (the “Additional Shares”) at a price of $6.75 per Additional Share for gross proceeds of $13,043,835 pursuant to the exercise in full of the over-allotment option (the “Over-Allotment Option”) granted to them in connection with the previously-announced bought deal offering of common shares of Knight for gross proceeds of $86,958,900, which was completed on December 22, 2014 (the “Offering”). Following the exercise in full of the Over-Allotment Option, the total gross proceeds of the Offering are $100,002,735. The securities that were sold have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and were not offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

It was announced that Bioenterprise Corporation will receive up to $2.5 million in federal government funding over the next five years for the national expansion of their commercialization services for the agricultural sector.  The announcement was made in Guelph by the Honourable Diane Finley, Minister of Public Works and Government Services. The Canadian Accelerator and Incubator Program (CAIP), delivered by the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) is designed to help Canadian early stage companies grow, prosper and create jobs.  CAIP provides support in the form of non-repayable contributions to a small and select number of best-in-class accelerators and incubators in Canada.

Interface Biologics Inc. (IBI), an innovative developer of biomedical-polymer technologies which improve the safety and effectiveness of medical devices, is pleased to announce the completion of a Series B financing round led by DSM Venturing and existing investor, BDC Capital.

National Research Council of Canada (NRC) has granted KalGene Pharmaceuticals an exclusive worldwide license for a therapeutic molecule against Alzheimer’s disease. As life expectancy rises worldwide, Alzheimer’s is becoming an increasingly lethal disease, placing enormous strain on caregivers and healthcare systems.  With over 500,000 patients in Canada alone, the current cost of dementia care is over $15 billion dollars a year; as the baby boomer generation ages, costs are expected to rise to over $150 billion annually by 2038. Development of Alzheimer’s therapies requires reliable identification of early stage disease. KalGene is collaborating with the Centre for Imaging Technology Commercialization (CIMTEC) and the Montreal Neurological Institute at McGill University to access the most advanced diagnostic techniques.

Bertech Diagnostics Ltd. announced the signing of a license agreement with Global Cancer Diagnostics of Tempe, Arizona. This agreement enables Bertech to sell The Lung Cancer TestTM in Canada. With this partnership The Lung Cancer TestTM will continue its rapid expansion for use by current and former smokers. The Lung Cancer Test was introduced to the U.S. marketplace in late 2014. All required Clinical and Validation studies have been completed with excellent results. The Test detects the presence of the required biomarkers that are proven effective in the early detection of lung cancer. The Test is now available in all U.S. states. Global Cancer Diagnostics Inc. announced that The Lung Cancer Test was available for purchase beginning late last year.

Cyclenium Pharma Inc., an emerging pharmaceutical company specializing in the discovery and development of novel drug candidates based on proprietary macrocyclic chemistry and the Institute for Research in Immunology and Cancer — Commercialization of Research (IRICoR) along with Université de Montréal and its Institute for Research in Immunology and Cancer (IRIC) announced the signing of a collaborative research agreement.  The collaboration intends to utilize Cyclenium’s proprietary QUEST Library™ of next generation macrocyclic molecules and associated hit-to-lead optimization expertise in concert with IRIC’s state-of the-art capabilities in biological target identification, characterization and screening, as well as medicinal chemistry. The objective of the collaboration is to discover and develop new drug candidates in cutting-edge target areas for the treatment of cancer and immunological disorders.

CQDM is very pleased to announce that Janssen Inc. (Janssen) is joining its public-private consortium to support highly innovative, collaborative research in Canada to accelerate drug discovery and development, in order to bring better treatments to patients. The new partnership with Janssen brings to nine (9) the number of pharmaceutical companies around CQDM’s table, increasing the financial leverage that partners generate together. Thanks to CQDM’s unique business model, this leverage can go up to 25 times, depending on the funding program and co-funding partners, allowing the development of breakthrough tools, technologies and platforms which can help to bring faster health solutions from bench to bedside, at a much lower cost. Janssen is joining CQDM’s precompetitive research consortium as a program specific member and will be associated with the Explore Program. This program funds highly innovative, unconventional, high-risk and high-reward research from Quebec and Ontario that may significantly accelerate drug discovery across the industry by increasing R&D productivity and developing new research avenues. It also supports early concept validation of disruptive technologies to enhance drug discovery.

Genzyme, a Sanofi company, announced that the Manitoba Drug Program has included AUBAGIO™ (teriflunomide) 14 mg on the provincial drug formulary as a first-line oral agent for people in the province living with relapsing remitting multiple sclerosis (RRMS). AUBAGIO is indicated as monotherapy for the treatment of RRMS to reduce the frequency of clinical exacerbations and to delay the accumulation of physical disability.

Arch Biopartners Inc (“Arch” or the “Company”) (CSE:ACH)(OTCBB:FOIFF) has received conditional approval from the TSX Venture Exchange (“TSXV”) for the listing of its common shares on the TSXV. Final approval is subject to Arch complying with certain TSXV listing conditions by February 7, 2015. Upon receiving final approval to list its common shares on the TSXV, Arch will issue another press release specifying the last day of trading on the CSE and first day of trading on the TSXV. The trading symbol will remain “ACH”. Euro Pacific Canada (“EPC”) has been engaged to act as sponsor and prepare a sponsorship report in conjunction with the TSXV listing application. As part of the consideration for acting as sponsor, Arch has agreed to issue 71,500 common shares to EPC, to be held in escrow for one year from the date of issue. The date of issue is expected to be within ten days of the delivery of the sponsorship report to the TSXV.

Dr. Janet Dancey, Scientific Director of the Canadian Cancer Clinical Trials Network (3CTN), announced that 3CTN has received funding support from the Ontario Institute for Cancer Research (OICR), the Canadian Partnership Against Cancer (the Partnership), the Canadian Breast Cancer Foundation (CBCF) and CancerCare Manitoba. These contributions are the first from 3CTN’s coalition of cancer research funding organizations. 3CTN is in the process of finalizing additional funding commitments. The funding will be used to establish the Network’s sites at cancer centres conducting clinical trials across Canada. Network sites will receive financial support and other resources to be able to increase trials available to patients. Dancey also announced that 3CTN has also launched a new online service that will assist patients and clinicians in finding cancer clinical trials that may be of benefit.

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