Monday Deal Review - June 29, 2015

Welcome to your Monday Biotech Deal Review for June 22nd & 29th, 2015!

In M&A news, Tribute Pharmaceuticals Canada Inc. kicked off the summer with the $25 million acquisition of Medical Futures, with Tribute concurrently raising $12.5 million in a private placement of secured subordinated debentures. In addition, M Pharmaceuticals completed the acquisition of Trimtec Biomedical Inc., the primary purpose of which was the access to Trimtec’s intellectual property assets. Meanwhile, Endo International plc announced the pricing of $1.635 billion in unsecured, unsubordinated notes.

For details on these stories, as well as for the rest of the recent biotech highlights, continue reading this week’s Monday Deal Review!

Tribute Pharmaceuticals Canada Inc. (TSX-V:TRX)(OTCMKTS:TBUFF) (“Tribute” or the “Company”), a specialty pharmaceutical company with a primary focus on the acquisition, licensing, development and promotion of healthcare products in Canada and the U.S., announced that it has acquired Medical Futures Inc. (“MFI”) in a transaction valued at CAD $25 million.  Financial terms of the deal include the payment of: $8.3 million in cash on closing; $5 million through the issuance of 3,723,008 common shares in the capital of Tribute; and, $5 million in the form of a one year term promissory note bearing interest at 8% annually convertible at MFI’s option at any time during the term into 2,813,778 common shares of Tribute; and future contingent cash milestone payments totaling $6 million based on attainment of certain conditions expected shortly after the close of this transaction. The transaction is expected to be immediately accretive. Bloom Burton & Co. acted as trusted advisors to MFI on the transaction.

M Pharmaceutical Inc. (CSE:MQ)(OTCMKTS:MPHMF) (“M Pharmaceutical”), a Canadian company developing and commercializing biomedical technologies that improve the health and quality of life for people affected by obesity and diabetes, announced that it has closed the previously announced acquisition of the intellectual property rights associated with neural gastrointestinal stimulators through the purchase of Trimtec Biomedical Inc. (“Trimtec”), a private Alberta company. M Pharmaceutical issued 1,000 common shares from treasury and assumed the obligations of the exclusive worldwide license agreement covering this technology that Trimtec holds with UTI Limited Partnership at the University of Calgary in Calgary, Alberta.

Endo International plc (NASDAQ:ENDP)(TSX:ENL) (“Endo”) announced that Endo Limited, Endo Finance LLC and Endo Finco Inc. (collectively, the “Issuers”), its wholly-owned subsidiaries, priced $1.635 billion aggregate principal amount of 6.00% senior notes due July 2023 at an issue price of $1,000 per $1,000 principal amount in connection with their previously announced private offering. The notes will be unsecured, unsubordinated obligations of Endo Limited, Endo Finance LLC and Endo Finco Inc. and will be guaranteed by certain of Endo Limited’s direct and indirect subsidiaries.

Cynapsus Therapeutics Inc. (NASDAQ:CYNA)(TSX:CTH) (“Cynapsus”) announced that it has completed its previously announced underwritten public offering in the United States (the “Offering”) of 5,175,000 common shares at a price to the public of US$14.00 per share, for total gross proceeds of approximately US$72.5 million, including the exercise in full of the underwriters’ option to purchase additional common shares. Cynapsus’s common shares are dual listed on the NASDAQ Global Market (“NASDAQ”) under the symbol “CYNA” and the Toronto Stock Exchange (“TSX”) under the symbol “CTH”.

Clementia Pharmaceuticals, Inc. announced the completion of a U.S. $60 million mezzanine round of financing to support the ongoing development of the Company’s lead compound palovarotene for the treatment of fibrodysplasia ossificans progressiva (FOP). New Enterprise Associates (NEA) was the lead investor with participation by UCB, RA Capital Management, Rock Springs Capital Management, EcoR1 Capital, and a fund advised by Janus Capital Management LLC as well as existing investors OrbiMed Advisors and BDC Capital Healthcare Venture Fund.

Highland Therapeutics Inc., a pharmaceutical company, announced it has completed a US$50 million financing, consisting of a US$25 million offering of Class A Common Shares and a US$25 million credit facility provided by Citibank, N.A. The equity financing was led by Eastern Capital Limited.

In connection with the completion of the acquisition of MFI, Tribute also completed a private placement of $12,500,000 principal amount of secured subordinated debentures (the “Debentures”). The Debentures bear interest at a rate of 6.0% per annum payable quarterly in arrears and mature on June 16, 2016 (the “Maturity Date”). KES 7 Capital Inc. acted as the lead agent in connection with the offering and Bloom Burton & Co., Mackie Research Capital Corporation, Laurentian Bank Securities Inc. and Dundee Capital Markets Ltd. formed part of the syndicate for the offering. The agents received a cash commission equal to 6% of the gross proceeds raised.

SQI Diagnostics Inc. (TSX-V:SQD)(OTCMKTS:SQIDF) (“SQI”), a life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, announced that it intends to complete a non-brokered private placement (the “Private Placement”) of up to 10,600,000 units (“Units”) of the Company at a price of $0.50 per Unit for gross proceeds of up to $5.3 million, subject to regulatory and stock exchange approval. Each Unit will consist of one common share and one common share purchase warrant. Each common share purchase warrant will entitle the holder to purchase one common share at a price of $0.65 for a period of three years from the date of issuance, subject to accelerated expiry in certain circumstances. If the full Private Placement is sold and after giving effect to the issuance of shares and exercise of warrants, SQI would have up to 77,586,058 shares outstanding.

RepliCel Life Sciences Inc. (OTCMKTS:REPCF) (TSXV:RP), a clinical stage regenerative medicine company focused on the development of autologous cell therapies, is announced the completion of financing, raising total gross proceeds of $2,038,278.83, which consisted of a brokered private placement of 4,834,471 units (each a “Unit”) at a price of $0.31 per Unit for gross proceeds of $1,498,686.01 (the “Brokered Financing Portion”) and a non-brokered private placement of 1,740,622 Units at a price of $0.31 per Unit for gross proceeds of $539,592.82.

The Government of Ontario’s Ministry of Research and Innovation announced a $1 million contribution to the Neuroscience Catalyst consortium, bringing the total raised for the open innovation fund to $3.7 million. The contribution will be used to bolster Toronto’s neuroscience efforts to find new drugs to treat and manage brain disorders — specifically, mood disorders and Alzheimer’s disease.

Generex Biotechnology Corporation (OTCMKTS:GNBT) (“Generex” or the “Company”) announced that it entered into a securities purchase agreement with an institutional investor on June 24, 2015. The investor has agreed to purchase in a private placement an aggregate of 500 shares of the Company’s newly designated non-voting Series G 9% Convertible Preferred Stock (“convertible preferred stock”) and warrants to purchase up to an aggregate of 100% of the shares of its common stock issuable upon conversion of the convertible preferred stock (“warrants”) at the closing.

Pivotal Therapeutics Inc. (CSE:PVO)(OTCMKTS:PVTTF) (“Pivotal” or the “Company”), a specialty pharmaceutical company with a focus on Omega-3 therapies for cardiovascular disease and overall health, announced that on June 17, 2015 it issued 780,722 common shares (the “Common Shares”). The Common Shares represented payment of interest for the period of March 5th, 2015 to June 4th, 2015 on its outstanding Convertible Notes that is due on or before July 1, 2015. The issued and outstanding number of shares now total 95,013,710.

Encycle Therapeutics Inc., a Canadian start-up emerging as a market leader in finding orally-bioavailable molecules, announced $840,000 in funding from CQDM and MaRS Innovation to generate a better understanding of the chemical properties required to make small peptide-like molecules, which Encycle calls nacellins, orally bioavailable. This funding, generated through MaRS Innovation’s strategic partnerships programs with Pfizer Inc. and GSK, and CQDM’s global membership program with Pfizer Inc. and Merck, brings Encycle’s total funding to approximately $4 million, including an earlier investment in 2011 from Ontario Centres of Excellence.

Endo International PLC (NASDAQ:ENDP)(TSX:ENL) (“Endo”) announced that Endo Limited, Endo Finance LLC and Endo Finco Inc., its wholly-owned subsidiaries, intend to offer senior notes, subject to market and customary conditions. The notes will be unsecured, unsubordinated obligations of Endo Limited, Endo Finance LLC and Endo Finco Inc. and will be guaranteed by certain of Endo Limited’s direct and indirect subsidiaries. Endo intends to use the net proceeds from the proposed offering, together with the proceeds of new senior secured credit facilities and cash on hand, to fund the purchase price of the previously announced acquisition of Par Pharmaceutical Holdings, Inc.  (“Par”), as well as for repayments of indebtedness of Par and certain transaction expenses.

Kane Biotech Inc. (TSX-V:KNE) (“Kane” or the “Corporation”) announced that on June 23, 2015, it issued 254,178 common shares of the Corporation (“Common Shares”) in payment of $12,708.91 in interest owing on Kane’s $500,000 2 year 10% convertible redeemable unsecured note (the “Note”) as at June 18, 2015. Pursuant to the terms of the Note, Kane has the option to issue Common Shares in lieu of cash in payment of interest on the Note at a deemed price per share equal to the market price of the Common Shares on the applicable interest payment date, subject to a minimum price of $.05 per share and the approval of the TSX Venture Exchange.

Knight Therapeutics Inc. (TSX:GUD), a leading Canadian specialty pharmaceutical company,  announced that it has (1) extended a secured loan of US$15 million to Pro Bono Bio PLC (“Pro Bono Bio”), a leading healthcare nanotechnology company, and (2) entered into an exclusive distribution agreement with Pro Bono Bio to commercialize its wide range of nanotechnology products, medical devices and drug delivery technologies in select territories.

Knight Therapeutics Inc. (TSX:GUD), (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, announced that it has entered into a sale agreement with Synergy Strips Corp (OTCMKTS:SNYR) (“Synergy”) related to the U.S. rights to Neuragen®, an innovative OTC product that helps relieve pain caused by diabetic nerve damage. Knight retains Canadian rights and ex-U.S. global rights to Neuragen®. Under the terms of the agreement, Knight will receive minimum aggregate consideration of US$1,200,000.

Easton Pharmaceuticals Inc. (OTCMKTS:EAPH) announced that it has closed the recently announced MOU with BMV Medica S.A. de C.V. to distribute injectable approved cancer drugs from Biolyse Pharma for Mexico and Latin America. The Easton / BMV agreement is under similar terms as previously announced with the Common Sense Inc. agreement for the diagnostic women’s health products which maintains a 50/50 net profit sharing on all sales of a line of generic cancer drugs beginning with “Paclitaxel” and “Docetaxel” from St. Catharines, Ontario based Biolyse Pharma Corporation. The terms of the agreement calls for Easton to support the regulatory filings in Mexico for marketing authorization (MA) together with some ancillary costs.

handyem Inc. and FlowMetric Diagnostics Inc. announced their partnership centralized around the incorporation of handyem’s HPC-150 portable flow cytometer within FlowMetric Diagnostics’ mobile point-of-care diagnostic laboratory, the Mo-POD™. This unprecedented model of mobile laboratory platform is presented at the BIO International Conference at the Pennsylvania Convention Center, Philadelphia from June 15th to 18th 2015.  By virtue of this strategic collaboration, both handyem and FlowMetric Diagnostics intend to accelerate flow cytometry as a precise and low cost diagnostic platform to service North American and Global medical needs.

Hemostemix Inc. (TSX-V:HEM) (the “Corporation”) , a clinical-stage autologous cell-therapy company, announced that it has entered into a research collaboration agreement with the Austria-based Ludwig Boltzmann Institute for Experimental and Clinical Traumatology (“LBI”) to explore applications of Hemostemix technology for restoring blood supply. LBI is an internationally renowned organization dedicated to research in the fields of tissue engineering, stem cells, and regenerative medicine.

Endo International plc (NASDAQ:ENDP)(TSX:ENL) (“Endo”) announced that (1) its wholly-owned subsidiaries, Endo Finance LLC and Endo Finco Inc., will redeem all $481,894,000 aggregate principal amount outstanding of their 7.00% Senior Notes due 2019 on July 24, 2015 and (2) its wholly-owned subsidiary, Endo Health Solutions Inc. (“EHSI”), will redeem all $17,981,000 aggregate principal amount outstanding of its 7.00% Senior Notes due 2019 on July 24, 2015. Both redemptions are conditional and subject to the delivery of moneys sufficient to pay the applicable redemption price to Wells Fargo Bank, National Association, as trustee under the indentures governing the Notes on the redemption date.

Concordia Healthcare Corp. (TSX:CXR)(OTCMKTS:CHEHF) (“Concordia”), a diverse healthcare company focused on legacy pharmaceutical products and orphan drugs, announced that its common shares will begin trading on the NASDAQ Global Select Market® (“NASDAQ”) on June 29, 2015 under the symbol CXRX. Concordia’s common shares will continue to trade on the Toronto Stock Exchange.

BriaCell Therapeutics Corp (TSX-V:BCT)(OTCMKTS:ANCCF), a clinical stage cancer immunotherapy company, has been approved to begin trading on the OTCQB® Marketplace in the United States under the symbol “ANCCF”. BriaCell will continue to trade on the Toronto Stock Exchange Venture under the symbol “BCT”.

M Pharmaceutical Inc. (CSE:MQ)(OTCMKTS:MPHMF) (the “Company”), a Canadian company committed to developing and commercializing innovative biomedical technologies that improve the health and quality of life for people affected by obesity and diabetes, announced that it received approval to begin trading on the OTCQB marketplace. Companies trading on the OTCQB may be bought or sold in a manner almost identical to those trading on the NYSE or NASDAQ, via either institutional, online or retail brokers.

Health Canada is restricting the importation of drugs from Hospira S.P.A. in Liscate, Italy, due to data integrity concerns. This measure is to help mitigate any potential risk in light of recent findings from a trusted regulatory partner that raised concerns about the reliability of the laboratory data generated at this site. The licences of Canadian companies that import drugs from this facility are being amended with terms and conditions that require independent third-party testing against the approved Canadian specifications prior to release of any medically necessary products to the Canadian market. Independent, third-party testing will provide confidence that the affected medically necessary products meet Canadian quality standards before being released for use by Canadians.

A new $25 million commitment positions Ontario to be an early adopter of new treatments and technologies emerging from research and commercial developments in regenerative medicine. The Honourable Reza Moridi, Minister of Research and Innovation, announced renewed support for the Ontario Institute for Regenerative Medicine (OIRM), a network of Ontario-based stem cell and regenerative medicine programs operating in partnership with the Centre for Commercialization of Regenerative Medicine ((CCRM) along with Ontario’s leading health and research institutions.

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