Durect to raise funding for development; DARA aims for $2.5 million; Urodynamix to place stock

By Stephanie N. Rotondo

Portland, Ore., Sept. 11 - The private placement market was relatively busy during the post-holiday week, but come Friday, activity calmed down.

The pharmaceutical and biotechnology sectors were the clear dominators of the day.

Durect Corp. said it planned to raise $10 million in a registered direct offering. A company spokesperson said the funds would be used for product development.

DARA BioSciences Inc., another pharmaceutical company, also announced a registered direct offering. The company said it would sell equity units in its effort to raise $2.5 million.

In the biotech space, Urodynamix Technologies Ltd. announced a C$1.5 million placement of shares.

Elsewhere, Ipico Inc. said it pocketed C$3.5 million from a private placement of convertible debentures. The financing will help the company ramp up production.

Durect to raise development funds

Durect, a Cupertino, Calif.-based specialty pharmaceutical company, will raise $10 million via a registered direct offering of stock.

The company will sell approximately 4.44 million common shares at $2.25 per share.

The shares will be purchased by affiliates of Venrock.

Proceeds will be used for general corporate purposes, according to Matthew J. Hogan, chief financial officer of Durect.

"We have a number of products in our pipeline that we're developing," Hogan told Prospect News. "So it will just go toward further development of those."

Hogan also noted that the deal was non-brokered.

"I think [the terms] are fair to both sides and reasonably tight financing terms compared to some other deals that have been done recently," he said.

Hogan added that investors have reacted seemingly positive to the deal.

"So far our stock is up 2 cents," he said. "They certainly haven't reacted negatively."

Settlement is expected by Sept. 18.

Durect's equity (Nasdaq: DRRX) ended up 1 cent, or 0.4%, to $2.49. Market capitalization is $208 million.

DARA aims for $2.5 million

Also in the pharmaceutical sphere, DARA BioSciences said it negotiated a $2.5 million registered direct offering of equity units.

The Raleigh, N.C.-based company will sell approximately 6.59 million units containing one common share and one warrant equal to 0.75 shares. The units will sell at $0.38 and each whole warrant is exercisable at $0.616 for five years.

"We are pleased with the deal," said Kevin McGrath, investor relations for DARA. "It was done at a price above [the recent] closing price and we're pleased with the terms."

McGrath added that proceeds would be used for general corporate purposes.

Settlement is expected by Sept. 14.

DARA's stock (Nasdaq: DARA) fell $0.1343, or 23.98%, to $0.4257. Market capitalization is $13.9 million.

DARA BioSciences is a pharmaceutical company that acquires therapeutic molecules and medical technologies.

Urodynamix to privately sell stock

Urodynamix Technologies is looking to take in C$1.5 million from a private placement of common shares, according to a press release.

The deal also includes a C$500,000 greenshoe.

The company will issue up to 30 million shares at C$0.05 per share. Advantage Funds has already subscribed for C$750,000 of the financing.

"We are pleased to announce this private placement with the support and participation from our major shareholders and management team," said Barry Allen, president and chief executive officer, in the release. "This financing will provide the company with sufficient resources to execute on our business plan, specifically to accelerate the sales of our uroNIRS 2000 in the USA and to drive the company to profitability.

"The company has taken steps to significantly reduce its cash burn and has narrowed its focus to products that it believes will have significant near term financial impact," Allen concluded.

Urodynamix's shares (TSX Venture: URO) closed unchanged at C$0.055. Market capitalization is C$5.9 million.

Urodynamix Technologies is a Vancouver, B.C.-based biotechnology company.

Ipico settles debenture deal

Ipico announced it closed on its C$3.5 million non-brokered private placement of convertible secured debentures.

The deal originally priced Aug. 26.

The two-year 12% convertible debentures are convertible into common shares at C$0.25 per share. Investors also received four warrants per each dollar of debentures purchased.

The warrants are exercisable at C$0.25 for two years.

Proceeds will be used, in part, to ramp up production.

Ipico's equity (TSX Venture: RFD) ended steady at C$0.225. Market capitalization is C$12.4 million

Ipico is a Burlington, Ont.-based supplier of technologies for radio-frequency identification.

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