Monday Deal Review - September 15, 2014

Welcome to your Monday Biotech Deal Review for September 15th, 2014!

The last few weeks saw a steady rise in activity, with a series of financings being announced as well as closed. The Allergan-Valeant-Pershing Square saga also continues, as Allergan has requested an expedited schedule to obtain a preliminary injunction against Valeant in hopes of delaying or stopping the aggressive takeover.

For details on these stories as well as many more, keep reading this week’s deal review.

Knight Therapeutics Inc. (TSX:GUD) (“Knight”), a leading Canadian specialty pharmaceutical company, announced that it has entered into an asset purchase agreement with Orphan Canada Inc. (“Orphan”) related to the Canadian rights for ATryn® and PHOTOFRIN® (porfimer sodium), two innovative pharmaceutical products approved for sale in multiple jurisdictions. Orphan is a privately-held, Toronto-based specialty pharmaceutical company that in-licenses therapies for rare disorders and specialty medicines for the Canadian market. As part of the agreement, Jason Flowerday and Joost van der Mark, the founders of Orphan, will join the Knight leadership team; Jason as the Vice President Commercial Operations and Joost as Vice President Corporate Development.

Merus Labs International Inc. (“Merus” or the “Company”) (TSX: MSL)(NASDAQ:MSLI) announced that one of its wholly owned subsidiaries has acquired from Novartis AG (“Novartis”), in certain European countries, the rights to manufacture, market, and sell the branded prescription medicine product Sintrom® (acenocoumarol). Acenocoumarol is an anticoagulant indicated for the treatment and prevention of thromboembolic diseases. The Company funded the Sintrom® acquisition with cash on hand and a debt facility provided to Merus by a syndicate of lenders which also refinanced the Company’s existing debt. Other financial terms of the acquisition were not disclosed. Pursuant to the acquisition, Merus inlicensed the Sintrom® trademark, certain related intellectual property, and acquired other information and materials required to continue commercializing the brand in the territories acquired.

Valeant Canada (TSX: VRX) announced that it has completed the acquisition of Valeo Pharma’s dermatology product portfolio and several specialty products. Valeo Pharma is a Montreal-based pharmaceutical company offering high quality dermatology and specialty products. Founded in 2003, Valeo Pharma’s portfolio includes brands such as Aristocort C and Valisone G. These treatments add to Valeant Canada’s existing line of dermatitis solutions, joining Elidel, Dermatop, Topicort, UltraVate and CeraVe. The acquisition also includes Veralac for nail dystrophy, which complements Valeant Canada’s recently launched topical solution, Jublia, for onychomycosis. Valeo Pharma’s portfolio also comprises the specialty products Vancomycin, an injectable antibiotic for severe staphylococcal infections, and Cophylac, a well-known antitussive.

Allergan, Inc. (NYSE: AGN) (“Allergan” or the “Company”) provided an update regarding the validity of the written requests from Allergan stockholders that were delivered by Pershing Square Capital Management, L.P. (“Pershing Square”) to request a Special Meeting of Stockholders (the “Special Meeting”). According to a review conducted by Allergan and its independent inspector, Pershing Square has delivered requests that comply as to form with Allergan’s bylaws from stockholders owning more than 25% of Allergan’s shares, which does not include the additional requests from stockholders owning 2.8% of Allergan’s shares that were delivered on September 3, 2014.

Allergan also filed an answer in the United States District Court for the Central District of California responding to Valeant Pharmaceuticals International, Inc. (“Valeant”) and Pershing Square Capital Management, L.P.’s (“Pershing Square”) counterclaims regarding Allergan’s statements on the unsustainability of Valeant’s underlying business model.

Allergan also announced that it has asked the United States District Court for the Central District of California to set an expedited schedule for discovery and a motion for a preliminary injunction against Valeant Pharmaceuticals (TSX: VRX) (“Valeant”), Pershing Square Capital Management, L.P. (“Pershing Square”), and its principal, William A. Ackman, for violations of the federal securities laws. In addition, Allergan announced that it will hold a Special Meeting of Stockholders (the “Special Meeting”) on December 18, 2014, subject to confirmation by Allergan that the meeting has been validly requested in compliance with Allergan’s bylaws. Allergan has established an October 27, 2014 record date for stockholders entitled to vote at the Special Meeting. In its preliminary injunction motion, Allergan will seek an order barring Valeant, Pershing Square, Mr. Ackman, and entities affiliated with them from exercising any rights or benefits associated with Allergan shares that have been acquired unlawfully. Such an order would prevent Valeant, Pershing Square, and Mr. Ackman from voting their shares in any special meeting.

Immunovaccine Inc. (“Immunovaccine”, “IMV”, or the “Company”) (TSX VENTURE:IMV), a clinical stage vaccine and immunotherapy company, has closed the previously announced public offering (the “Offering”), raising gross proceeds of $9,514,543. Under the terms of the Offering, a total of 9,153,300 units (the “Units”) were issued at a price of $0.95 per unit (the “Issue Price”) for gross proceeds of $8,695,635 with the balance of the proceeds resulting from the partial exercise of the over-allotment option, as described below. Each Unit consists of one common share in the share capital of Immunovaccine (a “Common Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each whole Warrant entitles the holder thereof to purchase one additional Common Share upon payment of the exercise price of $1.24 per share until March 4, 2016. The Company will concurrently complete a non-brokered private placement (the “Private Placement”), raising a total of $1,716,816. Under the terms of the Private Placement, a total of 1,907,574 common shares of the Company will be issued at a price of $0.90 per share. In connection with the Private Placement, Immunovaccine has agreed to pay finders’ fees of $69,614.

Premier Diagnostic Health Services Inc. (“Premier” or the “Company”) (CSE:PDH) announced a 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. Management of the Company reserves the right, in its sole discretion and subject to CSE approval, to increase the Offering by 25% to up to 50,000,000 Shares for aggregate gross proceeds of up to $9,000,000. There is no minimum Offering amount required to close, and the Offering may be closed in tranches. The first closing is expected to occur on or about September 30, 2014. The Shares will be issued in reliance on exemptions from the prospectus and registration requirements contained in the securities legislation in the Province of British Columbia and in the jurisdiction of residency of each investor. The Shares will be subject to a hold period. No finder’s fees or commissions will be paid in connection with the Offering. The Offering is subject to approval by the Canadian Securities Exchange.

Microbix Biosystems Inc. (TSX: MBX), an innovator of biological products and technologies, confirmed that it has closed the second and final tranche of the recently announced private placement offering. Microbix announced that the offering was fully subscribed with the issuance of an aggregate of 5,128,206 units, of which 1,994,183 units were issued in the second tranche. Microbix received total gross proceeds from the offering of $2,000,000. Each unit consists of one common share of Microbix and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at an exercise price of $0.55 for five years. Insiders of the Company participated in the financing by purchasing an aggregate of 1,964,615 units representing over 38% of the offering. The financing was non-brokered. A total of 121,555 finder’s warrants were issued. Each finder’s warrant entitles the holder to purchase one unit at a price of $0.47 for a period of five years.

biOasis Technologies Inc. (TSX VENTURE:BTI)(the “Company”) announced that it has closed its non-brokered private placement announced on August 8th, 2014. The Company has issued 1,694,447 units (each a “Unit”), including an over allotment of 94,477 Units, at a price of CDN$0.95 per unit, for gross proceeds of CDN$1,609,753.15. Each Unit consists of one common share and one full common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CDN$1.20 per share for a period of twelve months up to and including August 29th, 2015, subject to an exercise acceleration clause. Under the exercise acceleration clause, which the Company may exercise once the Units are free of resale restrictions and if the Company’s shares are trading at or above a volume weighted average price of $1.40 for 10 consecutive trading days, the Warrants will expire upon 30 days from the date the Company provides notice in writing to the Warrant holders via a news release. A cash finder’s fees of CDN$101,460 was paid on a portion of the financing. All securities issued are subject to a hold period of four (4) months and one day and as such may not be traded until December 30th, 2014. The net proceeds from the sale of units have been added to working capital in furtherance of the Company’s business.

Tornado Spectral Systems Inc., an emerging tech company developing radically superior tools for measuring the chemical composition and structure of materials in real-time for a variety of demanding industrial processes, announced additional funding led by venture capital firms BeauVest and Roadmap Capital. The new investments will be used to finance Tornado’s continued growth in North America and globally.

Nuvo Research Inc. (TSX:NRI), a specialty pharmaceutical company with a diverse portfolio of topical and immunology products, announced that it has reached a full settlement with Mallinckrodt Inc. of Nuvo’s claims and Mallinckrodt’s counterclaim relating to Nuvo’s license to Mallinckrodt of the right to market and sell Pennsaid® and Pennsaid 2% in the United States. Under the terms of the settlement agreement, Mallinckrodt will return all U.S. rights to Pennsaid and Pennsaid 2% to Nuvo after a brief transition period and pay US$10 million.

Critical Outcome Technologies Inc. (TSX VENTURE:COT)(OTCQB:COTQF) (“COTI” or the “Company”) the bioinformatics and accelerated drug discovery company, announced that it has signed a letter of intent (“LOI”) with The University of Texas MD Anderson Cancer Center in Houston (“MD Anderson”), for the Phase 1 clinical development of the Company’s lead cancer drug candidate, COTI-2, in gynecological cancers. Under the terms of the proposed agreement, the Company and MD Anderson will work together to design and conduct a first in humans (Phase 1) study with oral COTI-2 in up to 40 women with advanced gynecological cancers who have failed conventional therapy. The parties have negotiated a cost structure for the clinical trial that is very favorable to the Company. COTI’s contribution is estimated at approximately $1.25 million USD with the remainder of the costs provided by MD Anderson as in kind monitoring, testing, and pharmacy capabilities. The parties anticipate that patient recruitment for the Phase 1 clinical trial will begin in early 2015.

RepliCel Life Sciences Inc. (TSX VENTURE:RP)(OTCQB:REPCF) (“RepliCel” or the “Company”) has, subject to regulatory approval, retained Venture Liquidity Providers Inc. (“VLP”) to initiate its market-making service to provide assistance in maintaining an orderly trading market for the common shares of the Company. The market-making service will be undertaken by VLP through a registered broker, W.D. Latimer Co. Ltd., in compliance with the applicable policies of the TSX Venture Exchange (“TSX-V”) and other applicable laws.

Mimetogen Pharmaceuticals announced that effective August 31st, 2014, the exclusive option agreement to license an investigational compound in development for the treatment of dry eye syndrome with Bausch + Lomb, has terminated.

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., has entered into a definitive agreement with Eisai Inc. (“Eisai”) to acquire Zonegran® for commercialization and sale in the United States, including Puerto Rico.

Concordia has also announced that its subsidiary, Pinnacle Biologics, Inc. (“Pinnacle”), a biopharmaceutical research and development company specializing in rare diseases, has signed a collaboration agreement for PHOTOFRIN® (porfimer sodium) with Orphan Canada, a Toronto-based specialty pharmaceutical company that in‐licenses therapies for rare disorders and specialty medicines within Canada. Under the agreement, Pinnacle and Orphan Canada will partner to support the continued supply of Photodynamic Therapy (PDT) using PHOTOFRIN in Canada.

CMC Biologics, Inc., a global leader in process development and contract manufacturing, and Zymeworks Inc., a Canadian biotherapeutics company and a world leader in the development of antibody therapeutics, have entered into a Master Services Agreement for process development, formulation development and cGMP clinical manufacturing of a recombinant human IgG1 bi-specific (heterodimeric) antibody.

GenoLogics announced that it has been selected by Illumina as the preferred laboratory information management system (LIMS) provider to support HiSeq X Ten sequencing system customers. Under the agreement, the companies are working closely to provide support for HiSeq X Ten whole-genome workflows and analysis pipelines, including those to be used inside of Illumina. Additionally, Illumina will be using GenoLogics’ LIMS to support its collaboration with Genomics England to sequence 100,000 genomes.

Matica Enterprises Inc. (CSE:GRF) (“Matica” or the “Company”) announced that it has signed a definitive agreement with Bellerosa Distributing Ltd. (“Bellerosa”) to exclusively market the full range of GlobalEx tablets for use in Canadian and US horticultural and agricultural industries. Matica will test, and if successful, distribute and market Chlorine Dioxide tablets in the medical marijuana industry for the elimination of mold, biofilm, and pests in controlled growing facilities, eliminating the need for harmful or Health Canada restricted pesticides. Under the terms of the definitive agreement, Matica has an option to acquire a 60% interest in the joint venture to be formed by Matica and Bellerosa by expending $200,000 over a two year period on the testing and marketing of the tablets. Matica will also issue 10,000,000 Matica shares to Bellerosa. This transaction will be considered a change of business for Matica and will be deemed a Fundamental Change under the policies of the Canadian Securities Exchange (the “CSE”).

Cardiome Pharma Corp. (NASDAQ: CRME / TSX: COM) announced that its subsidiary, Correvio International Sàrl, has entered into an agreement with Eurolab Especialidades Medicinales de Eurofar S.R.L. to sell and distribute BRINAVESS™ (vernakalant intravenous) exclusively in Argentina. Under the terms of the agreement, Eurolab has agreed to specific annual commercial goals for BRINAVESS™. Financial details of the agreement have not been disclosed.

AB SCIEX and Dalton Pharma Services (Dalton) announced a research collaboration to develop Antibody-Drug Conjugate (ADC) analysis capabilities. This will include development of more definitive and comprehensive method for the identification of drug loading and position of conjugation on macromolecules. This collaboration is part of AB SCIEX’s commitment to support the growing movement to bring targeted antibody-based therapies to market.

Antibe Therapeutics Inc. (“Antibe” or the “Corporation”) (TSXV: ATE, OTCQX: ATBPF) announced that common shares of the Corporation began trading in the United States on the OTCQX exchange under the ticker symbol “ATBPF”. Antibe’s common shares will continue to trade on the TSX Venture Exchange under the symbol “ATE”.

Fennec Pharmaceuticals Inc. (TSX:FRX)(OTCQB:ADHXD) (the “Company”) formerly known as Adherex Technologies Inc., announced that the Financial Industry Regulatory Authority (“FINRA”) has approved the Company’s corporate actions regarding its previously announced name change and share consolidation. As of open of business on September 5, 2014, the Company’s OTC symbol will be ADHXD. The “D” has been appended as the 5th character for 20 business days. After 20 business days, the Company’s OTC ticker symbol will change to “FENCF”.

Lorus Therapeutics Inc. (TSX: LOR) (TSX:APS) (the “Company”), a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, announced that it has changed its name to “Aptose Biosciences Inc.” The Company’s name change reflects its new focus and clinical-stage pipeline strategy, as an oncology research and development organization advancing new therapeutics and molecular diagnostics based on insights into the genetic profiles of certain cancers and patient populations. The Company’s lead product, APTO-253 (formerly LOR-253) exerts its antitumor effects by activating a key apoptotic pathway in tumor cells. In addition, the Company’s stated goal with respect to the name change is to align the product portfolio and product development with the strategic course set by its new management team.

Boehringer Ingelheim (Canada) Ltd. announced that on June 26, Health Canada approved Pradaxa® (dabigatran etexilate) for the treatment of venous thromboembolism events (deep vein thrombosis [DVT] and pulmonary embolism [PE]), and for the prevention of recurrent DVT and PE.

Apotex Inc., the largest Canadian owned pharmaceutical company, announced that an arbitration tribunal rejected Apotex’s claims that the FDA violated NAFTA by prohibiting imports of Apotex products from two plants in Ontario, Canada.

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