November 11, 2014

Monday Deal Review - November 10, 2014

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Welcome to your Monday Biotech Deal Review for November 10th, 2014!

 

This week, Profound Medical has announced their intention to go public.  In addition, Profound intends to complete a brokered private placement for gross proceeds of up to $30 million.

For more details on this story as well as many more, keep reading!

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Mira IV Acquisition Corp. (“Mira”) (TSX Venture: MRY.P) announced that it has entered into a letter of intent dated November 5, 2014 with Profound Medical Inc. (“Profound“), a corporation existing under the laws of the Province of Ontario, to complete a going-public transaction for Profound (the “Proposed Transaction”). It is currently anticipated that the Proposed Transaction will proceed by way of a “three-cornered” amalgamation under Ontario law, pursuant to which Profound will combine its corporate existence with a wholly-owned subsidiary of Mira. For convenience, Mira, as it will exist after completion of the Proposed Transaction, is sometimes referred to herein as the “Resulting Issuer”. Mira intends that the Proposed Transaction will constitute its “Qualifying Transaction” under Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (the “TSXV”). The Proposed Transaction will be an arm’s length transaction. Profound is a Canadian medical device company that is developing and commercializing a unique, minimally invasive treatment for prostate cancer.

In conjunction with, and prior to the closing of the Proposed Transaction, Profound intends to complete a brokered private placement of subscription receipts for gross proceeds of up to $30 million (the “Private Placement”). Each subscription receipt will be automatically exchanged for one common share of Profound immediately prior to the completion of the Proposed Transaction and upon the satisfaction of specified escrow release conditions, including the completion or waiver of all conditions precedent to the Proposed Transaction and the conditional approval for listing of the common shares of the Resulting Issuer on the TSXV. Pursuant to the Proposed Transaction it is intended that: (i) the outstanding common shares of Mira will be consolidated on the basis of a consolidation ratio to be determined in the context of the closing of the Private Placement (the “Consolidation”); and (ii) the holders of Profound common shares (including those investors in the Private Placement) will receive one common share of the Resulting Issuer in exchange for each outstanding Profound common share (on a post-Consolidation basis). The outstanding options of Mira will be adjusted accordingly to reflect the Consolidation. Following the completion of the Proposed Transaction, the shareholders of Profound (including those investors in the Private Placement) will hold a significant majority of the outstanding common shares of the Resulting Issuer. For the purposes of the Proposed Transaction, the deemed value of each common share of Mira will be $0.11 (on a pre-Consolidation basis).

Valeant Canada announced that its affiliate has completed the acquisition of CROMA Pharma Canada LTD, a subsidiary of CROMA Pharma GmbH, the private global pharmaceutical and surgical company based in Austria and specializing in ophthalmology, among a variety of other fields. The acquisition of new and innovative products from CROMA, such as EyeCEE Intra ocular lenses, EyeFill viscoelastics, Cornea Protect and Capsular Retention Ring will expand Bausch + Lomb Canada’s ophthalmic portfolio.

 

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Critical Outcome Technologies Inc. (TSX VENTURE:COT)(OTCQB:COTQF) (“COTI” or the “Company”) completed a second tranche of its previously announced non-brokered private placement with the issuance of 5,111,062 units (the “Units”) at a price of USD $0.23 per Unit for gross Canadian dollar proceeds of approximately $1,319,000. In aggregate, the Corporation has raised gross Canadian proceeds from the offering of approximately $1,836,000 through the sale of 7,123,760 Units. Each Unit consists of one common share and one warrant of the Corporation. Each warrant is exercisable for one common share of the Corporation at an exercise price of USD $0.34 per share for a period of 60 months from the date of issue. The Corporation paid finders’ fees to arm’s length third parties in connection with this tranche in the amount of $80,003 in cash and issued 310,076 compensation warrants. Each compensation warrant is exercisable into one common share of the Corporation at an exercise price of USD $0.26 per share for a period of 60 months from the date of issue. Both the warrants and compensation warrants are subject to acceleration of their expiration date by the Company in certain circumstances.

Pyng Medical Corp. (TSX-V: PYT) (the “Company”) announced that it has completed amendments to the terms of certain previously issued secured convertible notes dated August 10, 2009 (the “2009 Notes”) in the aggregate principal amount of $530,000. The Company amended the maturity date of the 2009 Notes from August 8, 2014 to August 8, 2015 and revised the price at which the principal of the 2009 Notes is convertible into common shares of the Company from $0.20 per common share to $0.06 per common share. In consideration of the foregoing amendments, each holder of an amended 2009 Note was issued one non-transferable common share purchase warrant (each, a “Warrant”) for every $0.06 of the principal amount of their notes. The Warrants will have an exercise price of $0.065 per Warrant and a term of one year.

6,666,666 common share purchase warrants (the “Warrants”) of the Company were also acquired by Pyng Growth LLC (“Pyng Growth”). The acquisition was in relation to the completion of amendments (the “Amendments”) to the terms of a secured convertible note previously issued to Pyng Growth dated August 10, 2009 in the aggregate principal amount of $400,000. Pursuant to the Amendments, Pyng Growth may convert all or a portion of the total outstanding principal amount of the Note into common shares of Pyng (each a “Share”) at a conversion price of $0.06 per Share. Each Warrant may be exercised by Pyng Growth for one Share, at $0.065 per Share. Assuming the conversion and exercise of the entirety of the Note and Warrants, Pyng Growth would hold 13,333,332 Shares.

Xenon Pharmaceuticals Inc. (“Xenon”) (Nasdaq:XENE), a clinical-stage biopharmaceutical company, announced the closing of its initial public offering of 4,600,000 of its common shares at a price to the public of $9.00 per share. The common shares sold include 600,000 common shares sold pursuant to the option to purchase additional shares granted by Xenon Pharmaceuticals to the underwriters, which was exercised in full. The issued common shares began trading on the NASDAQ Global Market on November 5, 2014 under the symbol “XENE.”  Jefferies LLC and Wells Fargo Securities, LLC acted as joint book-running managers for the offering. Canaccord Genuity Inc. acted as co-manager. A registration statement relating to this offering of common shares was declared effective by the Securities and Exchange Commission on November 4, 2014, and the offering was also qualified by a prospectus filed in each of British Columbia, Alberta and Ontario.

 

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Knight Therapeutics Inc. (TSX:GUD) (“Knight”), a leading Canadian specialty pharmaceutical company, announced that it has invested CAD$30 million into Teralys Capital Innovation Fund LP (“Teralys Fund”). This investment in another proven successful life science fund complements Knight’s USD$13 million investment in Sectoral and EUR19.5 million investment in Forbion. Teralys Fund is managed by Teralys Capital (“Teralys”). Teralys is the largest venture capital fund of funds manager dedicated to technologies and life sciences in Canada, having CAD$1.3 billion in assets under management with a significant focus on the North American life sciences sector. “These three funds have combined assets under management in healthcare of approximately CAD$5 billion and have an ability and motivating incentives to leverage their existing relationships with key life science companies to help secure Canadian product rights for Knight,” said Jonathan Ross Goodman, President and CEO of Knight. “We have now committed approximately $70 million of the $130 million we intend to invest into this strategy.”

The IRCM has signed an agreement with a leading international investment firm, Sanderling Ventures, to create Liphorus Pharmaceuticals. Up to 6.4 million dollars will be invested in the new spinoff company in the coming years. The IRCM concluded this agreement through its company Adaerata, in collaboration with Univalor. The IRCM is a renowned biomedical research institute located in the heart of Montréal’s university district. Founded in 1967, it is currently comprised of 34 research units and four specialized research clinics (cholesterol, cystic fibrosis, diabetes and obesity, hypertension). The IRCM is affiliated with the Université de Montréal, and the IRCM Clinic is associated to the Centre hospitalier de l’Université de Montréal (CHUM). More specifically, Liphorus will focus on small molecules that inhibit PCSK9 and whose activity is proving to be very promising in the treatment of high blood cholesterol. IRCM researchers have already clearly shown that these PSCK9 inhibitors reduce the level of bad blood cholesterol, thus helping reduce the risk of cardiovascular events. The small molecules in question could lead to the development of new pills.

Response Biomedical Corp. (“Response” or “the Company”) (TSX:RBM)(OTCBB:RPBIF) announced that the Company has entered into a second Forbearance to Loan Agreement (the “Forbearance Agreement”) with the lender under its outstanding term loan, Silicon Valley Bank (“SVB”), as of October 31, 2014. Under the terms of the Forbearance Agreement, SVB will grant a forbearance under which it will agree not to exercise its rights in respect of a breach or an anticipated breach of a financial covenant under the terms of the loan agreement (the “Loan Agreement”) until December 15, 2014. The Company continues to be current with all principal and interest payments due on all outstanding indebtedness and management expects to continue discussions with SVB to revise the financial covenants under the Loan Agreement. There can be no assurance that the Company and SVB will be able to reach mutually acceptable terms for revising the covenants. In the event that the parties are unable to agree on revisions to the covenants and the Forbearance Agreement is not extended, SVB would be entitled to exercise any of its rights under the Loan Agreement.

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