Critical Therapeutics closes $54.25 million PIPE; natural resources dominate issuance

By Sheri Kasprzak

Atlanta, June 7 - Critical Therapeutics, Inc. led private placement news Tuesday, one of many biopharmaceutical companies pushing issuance in the United States PIPE market over the past two weeks.

Critical Therapeutics issued 9.9 million shares at $5.48 each and also issued warrants for 3.5 million shares. The warrants are exercisable at $6.58 each.

After the deal was announced Tuesday morning, the company's stock gained $0.152, or 2.8%, to close at $5.582.

The biopharmaceutical company, which focuses on treatments for respiratory diseases, plans to use the proceeds to launch an investigation asthma drug. The proceeds will also be used for clinical and pre-clinical developments of other drug candidates and for general corporate purposes.

Critical Therapeutics is based in Lexington, Mass.

Elsewhere in the biopharmaceutical sector, Welichem Biotech Inc. wrapped a C$1,952,700 private placement, selling 8.49 million shares at C$0.23 each. Welichem is a Vancouver, B.C.-based biopharmaceutical company focused on developing treatments for ailments like psoriasis.

"[Biopharmaceutical companies] are just doing well," said one market source. "It's really a matter of better stocks. It makes sense to do these deals when your stock is up."

In the broader PIPE market Tuesday, Canadian natural resources issuers dominated headlines.

Romarco Minerals Inc., Maple Minerals Corp., Full Metal Minerals Ltd. and Bell Resources Corp. were among the Canadian resources exploration companies with new offerings in the pipeline Tuesday.

"Minerals were really strong yesterday, so that's why you're seeing more of those deals," said one Canadian market source. "I wouldn't necessarily say it's a trend, per se, but I would say that there will likely be more of them over the next week or so."

In the United States, sell-siders said lackluster stocks kept issuance here down.

"There's really not much I can point to," said one sell-sider of why volume was somewhat weaker in the U.S. Tuesday. "Stocks are off a bit, so that's probably the biggest thing. Just an off day, I suppose."

The Dow Jones Industrial Average crept up 16.04 to close at 10,483.07; the Nasdaq composite index gave up 8.6 to close at 2,067.16 and the S&P 500 edged down 0.25 to close at 1,197.26.

Magnequench raises $50 million

As part of its merger with AMR Technologies, Inc., Magnequench, Inc. has secured $50 million in a private placement of convertible debentures.

The funding for the new venture between Magnequench and AMR may also be funded by a $60 million term debt from a Hong Kong-based bank and another private placement of subscription receipts.

GMP Securities Ltd. was the placement agent in the debenture offering, the details of which couldn't be determined by press time Tuesday.

Magnequench and AMR signed an agreement Tuesday to merge, forming a company that will produce neodymium-iron-boron powders, rare earths and zirconium-derived materials used in electronic devices like computers, personal video recorders and mobile phones.

Based in Toronto, AMR produces advanced specialty rare earth materials and Indianapolis-based Magnequench produces neodymium-iron-boron powders. The proceeds from the debentures, debt financing and the equity offering will be used to refinance Magnequench's $155 million senior debt.

AMR's stock closed unchanged at $2.16 on Tuesday.

Cordero's C$13.95 million deal

Calgary, Alta.-based oil exploration company Cordero Energy Inc. has negotiated a C$13.95 million private placement of stock.

The company plans to sell 3 million shares at C$4.65 each.

The pricing is a 4.7% discount to the company's closing stock price of C$4.88 on June 6.

The deal is being sold through a syndicate of underwriters led by Tristone Capital Inc.

"Looks fine to me," said one market source familiar with the sector.

The market source said he felt the company probably benefited from higher oil prices from late last week, despite lower oil prices the past two days. On Monday, oil dropped $0.83 to close at $54.20 per barrel and dipped $0.73 to close at $53.76 per barrel Tuesday.

Cordero's stock lost C$0.13 to close at C$4.75 on Tuesday.

Based in Calgary, Alta., Cordero is an oil and natural gas exploration and development company. The proceeds will be used for exploration and development activities.

Metropolitan wraps $1 million deal

Smokeless cigarette producer Metropolitan Worldwide, Inc. has completed a $1 million private placement.

The company issued 1 million shares at $1 each.

The proceeds from the deal will be used to market its NicStic brand of smokeless cigarettes in Europe, Asia and the United States.

"We are pleased to have completed another round of financing in a very short period of time and we are contemplating a third round of financing, likely in July 2005," said Evert Wilbrink, the company's chief executive officer, in a statement.

"The proceeds from this financing will enable us to additionally support our key distributors in the process of setting up global distribution. Between the two private placements that we have recently completed, we feel that we are poised to commence our marketing and distrubtion of NicStics on a global basis in the fourth quarter of 2005.

"One of our goals is to be able to provide NicStics to smokers everywhere. With non-smoking areas, especially in restaurants and other public places, we believe that the NicStic will be able to satisfy smokers everywhere, allowing them to enjoy themselves in public settings without offending nonsmokers."

Based in Fort Lauderdale, Fla., Metropolitan develops smokeless cigarettes.

On Tuesday, the company's stock dipped a penny to close at $1.

Opti's stock slips

Opti Canada Inc.'s stock slid Tuesday, a day after announcing its plans to raise C$185 million in a private placement of units.

The company's stock lost C$0.97, or 3.61%, to close at C$25.90.

On Monday when the offering was first announced, the company's stock gained C$0.52 to close at C$26.87.

Canadian oil sands developer Opti Canada Inc. led private placement news with its C$185 million offering in a day marked by increased volume.

The deal includes units of one series C convertible preferred share and a half-share warrant at C$29.50 each.

Opti Canada is a Calgary, Alta.-based oil sands developer.

Terax's stock makes gains

Dallas-based oil and natural gas exploration company Terax Energy Inc.'s stock continued to make gains Tuesday after it announced its plans to raise up to $10 million in a private placement late last week.

The company's stock gained $1.40, or 30.43%, to close at $6 Tuesday after gaining $0.10 to close at $4.60 on Monday and sliding $0.15 to close at $4.50 on Friday.

After the deal was first announced June 2, the company's stock gained 100% to close at $4.65. The company's stock had been at $0.00 since a stock split in December 2004.

Terax plans to sell units at $10 each.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.