Private placement action moderate in mixed market; Medarex gets $50 million in licensing deal

By Sheri Kasprzak

Atlanta, Nov. 8 - Private placement volume was moderate Monday in a mixed market, even as oil prices dropped.

"Oil is down," said one sell-side source. "That doesn't seem to be affecting the market. I think it's because a lot of the other markets are sort of mixed."

In one mixed market, biopharmaceuticals, Medarex Inc. received $50 million as part of a licensing agreement with Bristol-Myers Squibb Co.

Bristol-Myers agreed to make an initial cash payment of $25 million and will also buy 2,879,223 shares of Medarex at $8.6829 per share. The shares will be issued in a private placement, according to a form 8-K from the Securities and Exchange Commission.

If all regulatory milestones are met, Medarex could get up to $205 million from Bristol-Myers, plus an additional $275 million in sales-related milestones.

The deal is part of a collaboration and licensing agreement for Medarex's MDX-010, a human antibody under investigation for the treatment of cancers and other diseases.

The agreement also grants Bristol-Myers a license to MDX-1379, a peptide vaccine to be used with MDX-010 to treat metastatic melanoma.

"This follows up the Sept. 20 deal with Pfizer [Inc.] to develop antibodies over 10 years," said a source familiar with the deal. "Pfizer paid $80 million and bought $30 million of Medarex stock at a premium. Medarex could receive up to $400 million if all milestones are all met."

Bristol-Myers Squibb signed a similar deal Oct. 29 with Imcor Pharmaceutical Co. In that agreement, Imcor sold $4.5 million in series A convertible preferred shares as part of a licensing deal to Bristol-Myers.

Based in Princeton, N.J., Medarex is a biopharmaceutical company.

Medarex's stock closed up $0.67 at $9 in pre-market trading Monday.

Westside Energy nets $18.5 million

Westside Energy Corp. said Monday it received $18.5 million in a private placement.

The company sold 10 million shares at $2 to 48 investors.

Also, a promissory note issued to a third-party investor with a $300,000 balance was converted into 150,000 shares of common stock.

Westside now has 17,048,331 shares outstanding.

Westside is a Houston-based oil and gas acquisition, exploration and development company. It plans to use the proceeds from the financing to reduce debt and fund exploration and development of its oil properties. The company also plans to use the money for leasehold acquisition and for working capital and general corporate purposes.

Westside's stock closed at $3 Nov. 5, its last trade.

Insmed receives agreements for $8.7 million

Insmed Inc. has received purchase agreements for about $8.7 million in a private placement.

The company sold 6.5 million shares of newly issued stock at $1.35 per share with warrants for about 3.25 million shares at $2. The expiry on the warrants could not be obtained by press time Monday.

Wells Fargo Securities LLC acted as placement agent in the deal, which was expected to close Monday.

Based in Richmond, Va., Insmed is a biopharmaceutical company. The company plans to use the proceeds from the financing to fund clinical trials of its products and develop other products. The company will also use the funds for working capital, capital expenditures and general corporate purposes.

Insmed's stock closed down $0.35 at $1.30 Monday.

TeamStaff raises $4.3 million

Healthcare temporary staffing company TeamStaff Inc. has raised $4.3 million in a private placement, the company said Monday.

The company has received subscription agreements for 2.4 million shares of its stock in the deal at about $1.79 per share from institutional investors.

The investors also received warrants for about 600,000 shares. The warrants allow for the purchase of an additional share of common stock at $2.50 for every four shares of stock purchased in the private placement. The warrants are exercisable for three years.

The deal is expected to close Nov. 9.

"This transaction provides us with the capital to implement our ambitious organic and acquisitive growth strategy in the $10 billion healthcare staffing industry," said T. Kent Smith, TeamStaff's president and chief executive officer, in a statement.

"The healthcare staffing industry currently is highly fragmented. This fragmentation provides a unique opportunity for well-capitalized participants to benefit from the same sorts of consolidation trends that occurred in the clerical/light industrial/financial/IT staffing sectors. The additional capital provided by the private placement transaction will allow us to take advantage of these opportunities."

SunTrust Robinson Humphrey Capital Markts and Maxim Group LLC served as selling agents in the offering.

Based in Somerset, N.J., TeamStaff is a temporary medical staffing agency. It plans to use the proceeds from the deal to fund its internal growth initiatives and execute acquisitions in the medical staffing field.

TeamStaff's stock closed up $0.04 at $2 Monday.

Valence gets $3 million

Valence Technology Inc. said it has received $3 million in a stock purchase agreement with West Coast Venture Capital Inc.

On Nov. 3, Valence issued 911,854 shares of restricted common shares at $3.29 per share to West Coast.

The funding represents the third in a $20 million equity commitment previously made by Berg & Berg Enterprises LLC. Berg & Berg is an affiliate of Carl Berg, director and stockholder of Valence and the president and controlling stockholder of West Coast Venture Capital.

Valence is an Austin, Texas-based technology company focused on the production of lithium polymer batteries. The company plans to use the financing for corporate operating needs and working capital.

On Monday, Valence's stock closed up $0.04 at $3.27.

Canadian activity

Denison Mines Inc. led Canadian private placement deals with its announcement Monday that it will raise C$15 million from a syndicate of underwriters.

The syndicate led by Sprott Securities Inc. and Dundee Securities Corp. and including National Bank Financial Inc., Haywood Securities Inc. and Salman Partners Inc. has agreed to buy 1,621,622 units of one share and one half-share purchase warrant at C$9.25.

The whole warrants allow for the purchase of an additional share at C$15 for five years.

The underwriters also have the option to buy an additional 378,378 units at C$9.25 before the offering closes.

Denison expects the deal to close Nov. 24.

Denison is a uranium mining company based in Toronto. On Monday, its stock closed down C$0.45 at C$9.45.

Greenshoe exercised on Yangarra deal

Yangarra Resources Inc. said placement agent Raymond James Ltd. exercised a greenshoe for a C$5 million private placement.

The deal was announced Oct. 22 as a C$3.9 million offering with five million flow-through shares at C$0.78.

Raymond James exercised an over-allotment option for 599,998 additional flow-through shares for a total offering of 6,410,254 flow-through shares at C$0.78.

Yangarra also granted options to buy 640,000 shares at C$0.78 to directors, officers and consultants within the company.

The company, based in Calgary, Alta., is an oil and gas company. Yangarra plans to use the proceeds from the deal to accelerate its exploration and development drilling program.

On Monday, Yangarra's stock closed unchanged at C$0.67.

Noveko wraps C$3.3 million private placement

Noveko Echographics Inc. has received C$3.3 million in a private placement.

The offering consists of 3.3 million units of one class A share and one half-share warrant at C$1 per unit.

The entire warrants allow for the purchase of one class A share at C$1.25 for two years.

The private placement was conducted as part of Noveko's acquisition of Sasecm, a French liability company with operations in animal breeding and veterinary medicine. Noveko's ultrasounds are primarily used in veterinary medicine.

Noveko paid €2 million for all of Sasecm's shares and issued Sasecm's shareholders 2.5 million class A shares of its stock.

Gestion Andre Leroux Inc., controlled by Andre Leroux, who holds 11.635 million Noveko class A shares, bought 1.65 million units. The other half of the units was subscribed for by Sipar-Societe d'Investissements en Participations Inc.

Noveko Echographics is a Montreal-based ultrasound scanner manufacturer.

The proceeds from the deal will pay the cash portion of the acquisition price of Sasecm and to further the development of both Noveko and Sasecm.

On Monday, Noveko's stock closed up C$0.01 at C$1.

Ashton plans C$2.3 million deal

Ashton Mining Inc. said Monday it plans to raise C$2.3 million in a private placement.

The company will offer up to two million flow-through common shares at C$1.15.

Dundee Securities Inc. will serve as placement agent in the offering and may place an additional 500,000 flow-through shares before the deal closes. The company expects the deal to wrap up by Dec. 6.

Ashton will pay Dundee 5% of the gross proceeds in the offering. Dundee will also receive broker warrants for common shares equal to 5% of the number of flow-through shares sold. The broker warrants allow for the purchase of one common share at $1.30 for 18 months.

Ashton is a Vancouver, B.C.-based diamond exploration company. It plans to use the proceeds from the financing for its exploration projects in Quebec and elsewhere in Canada.

Ashton's stock closed at C$0.82 Nov. 5, its last trade.

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