Monday Deal Review - October 20, 2014

Welcome to your Monday Biotech Deal Review for October 20th, 2014!

Welcome to your deal review for October 20th, 2014! After a hiatus last week due to Canadian Thanksgiving and our friends to the south celebrating Columbus Day, this week’s post covers deal activity from October 6^th 2014.

The past two weeks saw notable asset deals and financings, with Nuvo Research divesting PENNSAID 2% to Horizon Pharma for US$45 million in cash; MedAvail raising $30 million; and Highland Therapeutics securing a $25 million series C.

For the rest of the weeks’ major stories, keep on reading.

MedAvail Technologies Inc., announced the successful completion of a $30 million U.S. Series C financing from a syndicate including three new, seasoned U.S. healthcare investors along with the company’s existing investor group.   The Series C financing was led by Pura Vida Investments LLC and was joined by Deerfield Management Company and Adage Capital Management, all new investors in MedAvail. Existing investors Redmile Group, Walgreens Inc., and Alliance Boots GmbH also participated in the Series C financing.

Highland Therapeutics Inc. (“Highland”), a pharmaceutical company, announced that it has completed a US$25 million offering of Class A Common Shares. The financing was led by a private equity partner that is committed to Highland’s long-term success. The funds raised will provide, among other things, the necessary resources for Highland, through its wholly owned subsidiary Ironshore Pharmaceuticals & Development, Inc. to (i) complete the clinical development of HLD-200 (under development for the treatment of symptoms associated with ADHD) through to a New Drug Application, (ii) conduct a Phase IIB/III study of HLD-100 (amphetamine), (iii) expand manufacturing capacity and (iv) pursue pipeline expansion opportunities.

Premier Diagnostic Health Services Inc. (“Premier” or the “Company”) (CSE:PDH) announced that it has closed the second tranche of its non-brokered private placement offering (the “Offering”) of common shares of the Company (“Shares”) of up to 40,000,000 Shares at $0.18 per Share for aggregate gross proceeds of up to $7,200,000. The Company also closed its Over Allotment Option of 4,588,558 shares for gross proceeds of $825,900.45. Total proceeds of the Offering and Over Allotment Option were $8,025,900.40. No finder’s fees or commissions were paid in connection with the Offering or the Over Allotment. The net proceeds of the Offering will be used to fund expansion of the Company’s premier diagnostic medical clinics in China and Canada, as well as for general working capital and investment purposes.

Kane Biotech Inc. (TSX-V: KNE) (the “Corporation”) announced the intention of the Corporation to undertake a non-brokered private placement offering (the “Offering”) of up to 20,000,000 units (“Units”) at a price of $0.06 per Unit for gross proceeds of up to $1,200,000. Each Unit shall be comprised of one common share of the Corporation (a “Share”) and one Share purchase warrant (a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one Share at a price of $0.12 per Share for a period of 12 months from the date of issuance of the Warrant. Certain persons may assist the Corporation by introducing potential subscribers for the Offering and, subject to compliance with applicable legislation, will be entitled to receive: (i) a finder’s fee, payable in cash, equal to up to 8% of the total subscription proceeds received from subscribers introduced to the Corporation by such finder; and (ii) Share purchase warrants (“Compensation Warrants”) equal to up to 8% of the number of Units sold pursuant to the Offering to subscribers introduced to the Corporation by such finder. Each Compensation Warrant shall entitle the holder thereof to purchase one Share at a price of $0.06 per Share for a period of 12 months form the date of issuance of the Compensation Warrant. It is anticipated that approximately 10,000,000 of the Units offered pursuant to the Offering will be purchased by directors, officers and significant shareholders of the Corporation. The net proceeds of the Offering will be used for the Corporation’s research and development program and for working capital purposes. The Offering is subject to receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

Critical Outcome Technologies Inc. (TSX VENTURE:COT)(OTCQB:COTQF) (“COTI” or the “Corporation”) the bioinformatics and accelerated drug discovery company, announced the closing of the first tranche of a non-brokered private placement of 2,012,698 units (the “Units”) at a price of USD $0.23 per Unit for gross proceeds in Canadian dollars of approximately $517,700. 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 closing. In addition to cash costs, the Corporation also issued 147,720 Compensation Warrants exercisable to acquire one Common Share upon payment of USD $0.26 for a period of 60 months from the date of closing. Both the Warrants and Compensation Warrants are subject to acceleration of the Expiration Date by the Corporation in certain circumstances. The Common Shares and Warrants comprising the Units, as well as the Common Shares issuable upon the exercise of the Warrants, are subject to restrictions on resale which expire on February 18, 2015 in accordance with applicable securities laws and the policies of the TSX Venture Exchange. The offering is subject to final acceptance by the TSX Venture Exchange.

Supreme Pharmaceuticals Inc. (“Supreme” or the “Company”) (CSE:SL) announced that it has closed the final tranche of its previously announced unit financing for gross proceeds of $448,500 (the “Financing”). At the final closing, Supreme issued 1,794,000 units (comprised of 1,794,000 common shares of the Company (“Common Shares”) and 897,000 Common Share purchase warrants (“Warrants”)) at a price of $0.25 per unit. Each Warrant is exercisable for one Common Share at a price of $0.50 per share prior to October 6, 2015, subject to an accelerated expiry period upon 30-days notice by the Corporation to the subscriber, if the Common Shares trade at or above $0.70 for any five (5) day period during the term of the Warrants. In aggregate, total gross proceeds raised from the first and second closings totalled $2,612,732.50 through the issuance of 10,450,930 Common Shares and 5,225,465 Warrants. The Company paid aggregate finder’s fees of $82,920 and issued 330,480 Warrants to certain arm’s-length parties in the connection with the subscriptions of certain subscribers who participated in the Financing. The Common Shares and Warrants issued pursuant to the final tranche of the Financing are subject to a hold period that expires February 7, 2015. Following closing, Supreme has 70,263,565 Common Shares issued and outstanding. The Company intends to use the aggregate proceeds of the Financing for the development of the Company’s Kincardine facility and general working capital purposes.

Vivione Biosciences, Inc. (TSX-V: VBI), (“Vivione” or the “Company”), announced that options to purchase 880,000 common shares of the Company were granted today to an officer of the Company with an exercise price of $0.25 per share, expiring ten years from the date of grant and with one-third of such options vesting immediately and on each of the first and second year anniversary from the date of grant. The Company also addressed a clerical error in the press release dated October 7, 2014, which disclosed the amended expiry date of the 12,000,000 common share purchase warrants (the “Warrants”) issued to subscribers as part of the Company’s prospectus financing which closed on April 19, 2013. The amended expiry date of the Warrants was incorrectly disclosed in this press release as October 14, 2015, however the correct amended expiry date is October 19, 2015. All other terms of the Warrants will remain the same and the Company will deliver a Notice of Amendment reflecting the amended expiry date to the registered holders of the Warrants.

Export Development Canada (EDC) announced financing for Toronto-based Merus Labs for their acquisition of an established pharmaceutical product in several European countries. The financing was used to purchase the European rights to Sintrom, an anticoagulant for the treatment and prevention of clotting disorders, from the Swiss pharmaceutical company Novartis AG. EDC’s loan is part of a larger CAD 80 M financing facility arranged by BMO along with banking partner CIT.

Easton Pharmaceuticals Inc. (OTC: EAPH) announced that it has sourced out and secured financing commitment for the full amount owed on its option to purchase its entire ownership interest on its Canadian medical marijuana Initiative. The financing commitment including cash the company currently has in hand is over and above what is required for Easton to close on its exclusive option agreement to purchase up to 49% of its Canadian medical marijuana business and initiative that has received a letter to build from Health Canada under the country’s new MMPR system. The financing commitment is from a private Canadian accredited investor. The funding is to be forwarded to the Company upon receiving a Health Canada MMPR license as per the option agreement signed in June of this year. Complete terms to be disclosed at that time.

Nuvo Research Inc. (TSX:NRI), a specialty pharmaceutical company with a diverse portfolio of topical and immunology products, announced that it has completed the sale of its PENNSAID 2% U.S. sales and marketing rights to Horizon Pharma plc (NASDAQ:HZNP) for a cash payment of US$45 million (CDN$50 million) which was payable on closing. Effective January 1, 2015, Horizon will assume U.S. commercialization of PENNSAID 2% from Nuvo’s former U.S. marketing licensee. Nuvo retains all rights to PENNSAID and PENNSAID 2% outside of the U.S. and will be seeking a marketing partner or partners for international territories. Nuvo will supply PENNSAID 2% to Horizon for the U.S. market from its Varennes, Québec manufacturing facility pursuant to an exclusive long-term manufacturing agreement.

Response Biomedical Corp. (“Response” or “the Company”) (TSX:RBM)(OTCBB:RPBIF) announced that it has entered into a funded Technology Development Agreement with Hangzhou Joinstar Biomedical Technology Co. Ltd. (“Joinstar”) to support the co-development by Response and Joinstar of components and multiple assays that will run on a high throughput rapid immunoassay analyzer developed by Joinstar. Under the terms of the Technology Development Agreement and related agreements, Response will receive cash proceeds totaling approximately $8.82 million. The parties have also entered into a binding term sheet for a definitive Supply Agreement whereby Response will provide certain raw materials to Joinstar required for Joinstar to manufacture these multiple assays. Under the terms of the Technology Development Agreement, Joinstar will pay US$560,000 upon the signing of the agreement and will pay a further US$3.24 million in development milestones over the planned fifteen month development period. In addition, under the terms of the Supply Agreement, Response will receive a guaranteed US$2.13 million in revenue based payments over the first five years of commercialization of the co-developed assays. Joinstar related entities have also agreed to subscribe for 1,800,000 common shares of Response at a price of $1.21 per share for total gross proceeds of $2,178,000. Closing of the equity purchase is subject to approval by the TSX and certain Chinese government authorities.

Sirona Biochem Corp. (TSXV: SBM) (FRA: ZSB) announced a collaboration with innovative French Company, Aegilops Applications. Aegilops specializes in the protection of plant seeds. The objective of the research collaboration is to develop a novel compound to improve germination and growth in plants, thereby enhancing crop production. Sirona Biochem’s subsidiary TFChem has, in its portfolio, a compound that Aegilops will evaluate on different crops in seed treatment for potent agrochemical applications.

MedMira Inc., (MedMira) (TSX-V: MIR) has been engaged by Beacon Biomedical LLC (Beacon Biomedical) to develop a rapid colon cancer test on its patented Rapid Vertical Flow (RVF) Technology™ platform. The test will detect Cripto-1 (CR-1), a protein biomarker associated with early tumor formation and progression. Beacon Biomedical has secured the exclusive global development and commercialization rights for rapid oncology-based tests using this biomarker from the National Cancer Institute (NCI) at the National Institutes of Health (NIH) in the United States.

Sunshine Biopharma, Inc. (OTCQB: SBFM), a pharmaceutical company focused on the research, development and commercialization of drugs for the treatment of various forms of cancer, including its proprietary lead anticancer compound Adva-27a, announced that it has retained the services of Renmark Financial Communications Inc

Xagenic Inc., a molecular diagnostics company developing the first lab-free molecular diagnostic platform with a 20 minute time-to-result, announced that its project in partnership with the University of Toronto was successful in securing funding from Genome Canada under the Genomic Applications Partnership Program (GAPP). The project titled “Development of Low Cost Testing Chip and Device for Hepatitis C Testing” was approved with funding up to a maximum of $5,999,865 over three years. The Ontario Ministry of Research and Innovation is supporting the project with a grant matching the Genome Canada contribution.

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