October 6, 2014
Monday Deal Review - October 6, 2014
Welcome to your Monday Biotech Deal Review for October 6th, 2014!
This week saw Concordia Healthcare and Tribute Pharmaceuticals wrap up significant rights acquisition deals for amounts of $90 million and $32 million, respectively. In addition, Premier Diagnostic Health Services, Xylitol and MedMira each closed financings.
For details on these stories and the rest of the week’s major news, keep reading!
Laborie Medical Technologies, Inc. (“Laborie”), completed its acquisition of Unisensor AG and Unisensor USA, Inc. Unisensor is headquartered in Wiesendangen, Switzerland with US operations in Portsmouth, New Hampshire. Unisensor specializes in the development and manufacture of micro, high resolution sensors to measure pressure and pH values for the Gastroenterology and Urology markets. LABORIE’s acquisition of Unisensor extends its innovation and market leadership in Urology diagnostic pressure measurement to the Gastroenterology market.
Mettrum Health Corp. (the “Company”) (CVE:MT), formerly Cinaport Acquisition Corp. (CPQ.H: TSX-V), announced that it has closed its qualifying transaction (the “Transaction”) with Mettrum Ltd. (“Mettrum”), a licensed producer under the Marihuana for Medical Purposes Regulations (the “MMPR”), pursuant to which the shareholders of Mettrum completed a reverse takeover of the Company. As a part of the Transaction, the Company changed its name from “Cinaport Acquisition Corp.” to “Mettrum Health Corp.” and consolidated its common shares on a 14.5625 to 1 basis. Following these changes, Mettrum amalgamated with 2434265 Ontario Inc., a wholly-owned subsidiary of the Company formed solely for the purpose of facilitating the Transaction. Pursuant to the amalgamation, the shareholders of Mettrum received one common share of the Company for each common share of Mettrum registered in the names of such shareholders. Holders of Mettrum’s options and warrants outstanding at the time of closing of the Transaction also received equivalent instruments of the Company exercisable for or convertible into the Company’s common shares. Similarly, non-transferable broker warrants previously issued in connection with the Private Placement became exercisable for a corresponding number of the Company’s common shares. In connection with the Transaction, Mettrum and the Company have satisfied the escrow release conditions of Mettrum’s private placement previously announced on July 29, 2014 (the “Private Placement”). The Private Placement raised gross proceeds of $34.5 million. The escrowed funds, net of the cash commission payable to the agents, has been released to and as directed by the Company.
Premier Diagnostic Health Services Inc. (“Premier” or the “Company”) (CSE:PDH) announced that it has closed the first 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 first tranche consisted of 34,108,028 Shares for aggregate gross proceeds of $6,139,445.04, including 415,000 Shares issued in settlement of debt. The Shares will be subject to a hold period expiring on February 3, 2015. No finder’s fees or commissions were paid in connection with the Offering. The Company anticipates the second tranche of the Offering will close on or about October 15, 2014. On September 23, 2014 the Company announced the closing of the second tranche of a private placement of convertible preferred shares of its subsidiary company, Premier Diagnostic Center (Vancouver) Inc. The Company wishes to highlight that the private placement of the subsidiary company was originally announced on July 31, 2014 and the conversion price of the subsidiary’s preferred shares was based on the market price of the Company’s common shares at that time. The 415,000 Common shares issued as debt settlement were issued at a deemed issue price of $0.18 in settlement of debt totalling $74,700. The creditor is an insider of the Company.
Xylitol Canada Inc. (“Xylitol Canada” or the “Company”) (TSX-V: XYL) announced that it has completed a private placement of 6,600,000 common shares at an issuance price of $0.25 per common share for aggregate gross proceeds of $1,650,000 (the “Placement”). The issuance price per share was determined based on the volume-weighted average price of the common shares on the TSX Venture Exchange for the 20 days prior to closing. Proceeds from the Placement will be used to fund xylose plant development initiatives including engineering, design, process optimization, and general overhead requirements associated with the xylose plant project(s). In addition, a portion of the proceeds will be deployed to bolster the working capital base of the Company’s growing product division. All common shares issued pursuant to the Placement are subject to a hold period of four months from the closing date in accordance with the rules and policies of the TSX Venture Exchange and applicable Canadian securities laws.
MedMira Inc., (MedMira) (TSX-V: MIR) announced that it has closed a CAD $1.1 million equity investment with a new, arm’s length investor from Asia. Under the terms of the deal the investor will acquire 22,000,000 equity units at $0.05 per unit. Each equity unit consists of one common share and one common share purchase warrant and is subject to a four month hold period which expires on January 31, 2015. Each full warrant entitles the investor to purchase one common share of MedMira at $0.10 per share exercisable over four years.
Pivotal Therapeutics Inc. (CSE: PVO) (OTCQX: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 October 1, 2014 it issued 780,722 common shares of the Corporation (the “Common Shares”) representing payment of interest for the period of June 5th, 2014 to September 4th, 2014 on its outstanding Convertible Notes. Interest on the Notes, at the rate of 8% per annum, is payable quarterly in either cash or Common Shares, at the option of the Company. Common Shares issued in payment of interest are valued at the greater of CDN $0.20 per share and such price as may be allowed under the CSE Policy. The issued and outstanding number of shares now total 92,696,999.
Concordia Healthcare Corp. (“Concordia” or the “Company”) (TSX: CXR) (OTCQX: CHEHF), a diverse healthcare company focused on legacy pharmaceutical products, orphan drugs, and medical devices for the diabetic population, announced that its subsidiary, Concordia Pharmaceuticals Inc. (“CPI”), has completed the previously announced acquisition of Zonegran® (zonisamide) for commercialization and sale in the United States, including Puerto Rico. CPI acquired Zonegran from Eisai Inc. (“Eisai”) for US$90 million in cash, plus approximately US$1.3 million for purchased inventory. Management paid for the acquisition through debt financing. Accordingly, General Electric Capital Corporation (“GE Capital”) has provided an incremental senior secured credit facility of up to $95,000,000 (the “Incremental Term Loan”) by way of an amendment and restatement of the existing credit agreement among GE Capital, Healthcare Financial Services, as agent, the Company, as borrower, certain credit parties party thereto, and certain lenders party thereto, dated May 14, 2014.
Tribute Pharmaceuticals Canada Inc. (“Tribute” or the “Company”) (TSX-V:TRX) (OTCQB:TBUFF), announced that it has acquired the Canadian rights to Fiorinal®, Fiorinal® C, Visken® and Viskazide® (the “Products”) from Novartis AG (“Novartis”) for CDN$32 million which was paid in cash on closing. Combined net sales of the Products during the twelve month period ending August 31, 2014 were approximately CDN$10.8 million. The Company funded the acquisition of the Products with cash on hand and with US$6 million of debt provided by SWK Holdings Corporation (“SWK”) (SWKH.OB). In connection with the transaction the Company increased its existing debt facility with SWK by up to US$9 million, US$6 million of which was drawn upon in connection with the acquisition of the Products. The additional advances by SWK will be governed by the terms of the credit agreement entered into between the Company and SWK in August 2013 with certain revisions thereto as set forth in the Form 8-K to be filed with U.S. and Canadian securities regulatory authorities. In connection with the funding of the first tranche SWK was issued an aggregate of 740,000 common share purchase warrants with each such warrant entitling the holder thereof to acquire, at any time before October 1, 2019, one common share of Tribute at a price of US$0.70 per share. The warrants and common shares issuable on exercise of the warrants will be subject to a hold period expiring on February 2, 2015, pursuant to Canadian securities laws.
Response Biomedical Corp. (“Response” or “the Company”) (TSX:RBM)(OTCBB:RPBIF) announced that the Company has entered into a Forbearance to Loan Agreement (the “Forbearance Agreement”) with the lender under its outstanding term loan, Silicon Valley Bank (“SVB”), as of September 30, 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 of a financial covenant under the terms of the loan agreement (the “Loan Agreement”) until October 31, 2014.
Quest PharmaTech Inc. (TSX-V: QPT) (“Quest” or the “Company”), a pharmaceutical company developing and commercializing products for the treatment of cancer, reported that it has signed a license agreement with Bioceltran Co., Ltd. (Bioceltran), a private South Korean based company to license Quest’s photodynamic therapy (PDT) technology to Bioceltran in return for up-front license fees, milestone payments and royalties on future product sales. Subsequent to signing the license agreement, Quest purchased, (for an undisclosed amount) as a Foreign Equity Investment 38% ownership interest in existing shares of Bioceltran.
Biosenta Inc. (“Biosenta” or the “Company”) (CSE:ZRO) announced that it has completed the repayment of the $550,000 Bridge Loan announced on March 27, 2014. The 6-month loan was due on September 27 and Biosenta has complied with all of its obligations including making the final payment on the due date. Now that the Bassett loan has been fully repaid, the Company is also in the process of removing a General Security Arrangement that was applied to certain assets of the Company by Bassett.
- Apotex Pharmachem India Pvt Ltd (APIPL)
- Apotex Research Private Limited (ARPL)
- IPCA Laboratories
The action applies to finished products from ARPL, as well as active pharmaceutical ingredients (APIs) and products made with APIs from APIPL and IPCA. Health Canada has compiled an initial list of products affected by the import ban. The list will be updated as new information becomes available.
Apotex Inc. learned of Health Canada’s action to temporarily suspend, as a precautionary measure, the importation of drug products from certain plants in India including two Apotex affiliates, Apotex Pharmachem India Pvt Ltd (APIPL) and Apotex Research Private Ltd (ARPL). Apotex believes that Health Canada’s intentions in this regard are unwarranted and that, upon careful review of all of the facts, Health Canada will be fully satisfied as to the integrity and quality of all Apotex products imported from the Indian facilities. Apotex noted that many of the raw materials that are purported to be covered by the Health Canada notice are not, in fact, manufactured at APIPL facility but, rather, are manufactured in Canada, by Apotex, in Brantford, Ontario. The ARPL and APIPL facilities were recently inspected and given clearance by Health Canada and another international regulatory agency in February and August 2014 and were found to be compliant. Apotex has not been made aware of any new information which would cast doubt on Health Canada’s own findings. Apotex has requested an immediate meeting with Health Canada to address any concerns that may have led to yesterday’s announcement.
Critical Outcome Technologies Inc. (TSX VENTURE:COT)(OTCQB:COTQF) (“COTI” or the “Company”), the bioinformatics and accelerated drug discovery company, announced that COTI-2, the Company’s lead oncology asset, has received additional patent protection. The United States (“U.S.”) Patent and Trademark Office has granted its sixth patent and the Japan Patent Office has granted its first patent for the Company’s lead oncology asset. U.S. Patent No. 8,822,475 extends and enhances the methods of treating cancers using compounds in the COTI-2 family covered under previous patent grants.
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