Anesiva secures $45 million from direct stock sale; Discovery Labs pockets $10 million from PIPE

By Sheri Kasprzak

New York, Nov. 22 - Two biotech companies announced substantial stock offerings Wednesday in light private placement activity ahead of the Thanksgiving holiday.

PIPE action almost ground to a halt ahead of the holiday weekend, market sources said.

"You mean people are actually working today?" one West Coast-based sellsider said Wednesday. "Almost everyone here is gone. It's safe to say not much is getting done."

The sellsider noted that once the market cranks back up after the holiday, activity should pick up again and remain heavy through the end of the year, adding that issuers want to get their deals on the books before the year closes.

"It's like that every year, really, and I'll be surprised if that's not the case this year too," he said.

Another sellsider based in New York agreed.

"It's bound to get pretty crazy in December," he acknowledged.

Heading up the two biotech offerings announced Wednesday was a $45 million registered direct deal from Anesiva, Inc.

The company is gearing up to sell 7 million shares at $6.40 each to a group of institutional investors. The price per share is a slight discount to the company's $6.42 closing stock price Tuesday.

News of the deal, released Wednesday morning, sent the company's stock up 3.9%, or 25 cents, to close at $6.67 (Nasdaq: ANSV).

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

Lazard Capital Markets LLC is the bookrunner for the deal, which is set to wrap on Nov. 28.

Proceeds will be used for the development and commercialization of the company's product portfolio, including Zingo, its most advanced product for pain. The rest will be used for general corporate purposes.

Based in South San Francisco, Calif., Anesiva develops novel therapeutic products to treat pain.

Discovery wraps $10 million deal

Elsewhere in biotech news, Discovery Laboratories, Inc. sealed a private placement of its stock for $10 million, issuing 4,629,630 shares at $2.16 each to Capital Ventures International.

The price per share is a 6.9% discount the company's $2.32 closing stock price on Tuesday.

Capital Ventures received warrants for 2,314,815 shares, exercisable at $3.18 each for five years.

Jefferies & Co., Inc. was the placement agent.

The company's stock advanced by 2.6%, or 6 cents, to end the day at $2.38 before giving up 2 cents in after-hours trading (Nasdaq: DSCO).

The volume of Discovery shares traded Wednesday dropped off with 271,326 shares traded compared with the average 762,723 shares.

Proceeds will be used for regulatory, clinical and manufacturing activities for Food and Drug Administration approval of the company's lead product candidate Surfaxin to prevent respiratory distress syndrome (RDS) in premature infants. The proceeds will also be used for the development of Aerosurf, the company's aerosolized product also for RDS in premature infants.

Based in Warrington, Pa., Discovery develops surfactant replacement therapies for respiratory diseases.

Red Mile raises $8.24 million

In other PIPE news, Red Mile Entertainment, Inc. settled an $8.244 million private placement of senior secured convertible debentures.

The 5.5% debentures were issued to institutional and private investors.

Of the principal, $5.824 million is due on Oct. 19, 2008 and the rest on Nov. 20, 2008. The debentures are convertible into common stock at $1.75 per share.

The debentures are redeemable at 115% of principal plus interest.

J.F. Mackie & Co., Ltd. was the placement agent.

Proceeds will be used for the development of the company's interactive video games.

"Our continued ability to raise capital is a clear validation of our business model, which is focused on creating interactive game franchises from the intellectual property we have incubated," said Chester Aldridge, the company's chief executive officer, in a news release. "This funding enables us to build upon the success of our initial 'Heroes of the Pacific' game franchise and to continue executing our growth strategy."

Based in Sausalito, Calif., Red Mile develops interactive entertainment software.

SES Solar stock climbs on deal

After announcing its $3.69 million stock offering Wednesday morning, SES Solar Inc. watched its stock climb by more than 5.8%.

The stock gained 7 cents to close the day at $1.27 (OTCBB: SESI).

The company sold 4.1 million shares at $0.90 each to a group of investors.

Proceeds will be used to construct a solar panel manufacturing plant in Geneva.

"We are very pleased with the confidence investors are showing in SES Solar," said Jean-Christophe Hadorn, the company's CEO, in a statement. "We are in advanced negotiations for obtaining the balance of the construction financing and believe we will conclude those discussions soon."

SES, based in Geneva, develops solar panels and solar roof tiles.

Aurelian prices offering

Heading up resources offerings north of the border, Aurelian Resources Inc. negotiated the terms of a C$75 million stock deal Wednesday.

The company will sell 2 million shares at C$37.50 each, an 8.4% premium to the company's C$34.60 closing stock price on Tuesday.

Aurelian's stock gave up 60 cents, or 1.73%, to close at C$34.00 (TSX Venture: ARU).

The deal is being placed through a syndicate of underwriters led by Sprott Securities Inc.

Proceeds will be used for the exploration and development of the company's Condor project and for working capital and general corporate purposes.

Toronto-based Aurelian is a mineral exploration company focused on gold.

Ausam stock jumps

In secondary market action, Ausam Energy Corp.'s stock gained 7.41% Wednesday, a day after pricing a private placement for up to $60 million and at least $45 million linked to its acquisitions of oil and gas leases.

The stock gained 2 cents to close at C$0.29 (TSX Venture: AUZ). On Tuesday, the company's stock gave up 3 cents, or 10%, to close at C$0.27.

The offering was priced at a 100% premium to the company's C$0.30 closing stock price on Monday.

The deal includes units of one share and one half-share warrant at $0.5235 each, or C$0.60 each.

The deal is set to close Dec. 31.

Proceeds will be used to pay the cash portion of the company's acquisition of oil and gas leases in Texas, Louisiana, Mississippi, Alabama and Arkansas. The leases are expected to cost $35 million, comprised of $15 million in cash and 63,417,143 in stock.

Under the terms of the acquisition agreement, Ausam was required to raise at least $45 million in a private placement.

Calgary, Alta.-based Ausam is an oil and natural gas exploration company.

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