Spectrum prices $32.08 million direct stock offering; Insmed plans $18.23 million stock sale

By Sheri Kasprzak

New York, May 4 - A group of biopharmaceutical companies grabbed PIPE headlines Friday with registered direct offerings.

Leading the pack was Spectrum Pharmaceuticals, Inc., which priced a $32,088,125 direct offering of 5,134,100 shares.

The shares are priced at $6.25 each, a 4% discount to the company's $6.52 closing stock price on Thursday.

The offering was announced late Friday, and the stock gained 3 cents to end at $6.55 before giving up 3 cents in after-hours activity (Nasdaq: SPPI).

The shares are being offered under the company's shelf registration.

Oppenheimer & Co. is the bookrunner.

The deal is expected to wrap up on Wednesday.

Proceeds will be used for clinical trials of the company's lead product candidates and for clinical and preclinical studies of its other product candidates. The proceeds also will be used for potential licenses and acquisitions as well as for working capital.

Spectrum last visited the PIPE market in September 2005, selling $42 million in shares from its shelf registration at $5.25 each. Rodman & Renshaw, LLC was the placement agent for the deal.

Based in Irvine, Calif., Spectrum develops cancer drugs.

In the broader market, one market source said biotech, at least for the most part, might be the sector to watch going forward.

"We're expecting quite a few [offerings] in the near future," he said in an interview Friday afternoon. "I haven't seen anything particularly huge, but in terms of volume, I see the numbers [of offerings] increasing."

Insmed's offering

Elsewhere in biotech deals, Insmed Inc. said it is getting ready to wrap an $18,229,830 offering.

News of the offering sent the company's stock diving by 12%. The stock gave up 12 cents to end at $0.89 (Nasdaq: INSM). Volume was exceptionally high with 8,890,142 shares traded compared with the average 3,531,790 shares.

A group of investors agreed to buy 20,255,367 shares off of the shelf registration at $0.90 each. The share price is a 10% discount to the company's closing stock price of $1.00 on Thursday.

The investors will also receive warrants for 2,025,536 shares, exercisable at $1.10 each for five years.

The deal was expected to settle on Friday.

C.E. Unterberg, Towbin, LLC was the placement agent.

Proceeds will be used for working capital and general corporate purposes.

Insmed also is no stranger to the PIPE market, having issued $35 million in convertible notes back in March 2005. The 5.5% five-year notes are convertible at $1.295 each.

Towbin was also the agent for that offering.

Insmed, based in Richmond, Va., develops treatments for metabolic diseases.

Silicom plans offering

In the tech sector, Silicom Ltd. announced plans to raise $17,937,500 from a private placement of its stock.

After the offering was announced Friday morning, the stock got off to a rocky beginning, giving up 7.48%, or $1.73, in pre-market activity. By the end of the day, the stock fell 5.75%, or $1.33, to close at $21.79 (Nasdaq: SILC).

Volume was up with 215,698 shares traded compared with the average 98,933 shares.

A group of accredited investors agreed to buy 875,000 shares at $20.50 each. The shares are priced at an 11.3% discount to the company's $23.12 closing stock price on Thursday.

The offering also includes warrants for 218,750 shares, exercisable at $28.25 each for three years.

The deal is expected to close on Monday.

Cowen and Co., LLC and W.R. Hambrecht + Co., LLC are the placement agents.

Proceeds will be used for working capital.

Based in Kfarsava, Israel, Silicom develops high-performance server/appliances networking solutions.

Opal Energy plans deal

Moving north of the border, Opal Energy Corp. priced a C$25 million private placement of stock.

The non-brokered deal includes up to 125 million shares at C$0.20 each.

"[I am] very pleased with the support for the Opal business plan shown by a number of significant European institutions and other investors, which will put Opal on its strongest financial footing ever," said Opal chief executive officer Ron Oligney in a statement.

Proceeds from the deal will be used for the company's strategy to expand its operations in Texas.

The company's stock advanced by a penny on Friday to end at C$0.245 (TSX Venture: OPA).

Located in Vancouver, B.C., Opal is a natural gas exploration company focused on properties in southern Texas.

RPT plans offering

In other Canadian resources deals, RPT Uranium Corp. negotiated the terms of an C$8 million non-brokered placement.

The deal includes up to 20 million units of one share and one warrant. Each warrant allows for the purchase of another share at C$0.60 each for one year.

Proceeds will be used for exploration on the company's uranium properties in the Sibley Basin of Ontario and the Athabasca Basin of Saskatchewan. The rest will be used for working capital.

The stock lost 2.5 cents on Friday to settle at C$0.455 (TSX Venture: RPT).

RPT is based in Vancouver, B.C.

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