Acorda secures $31.5 million from stock offering; Dynavax plans $27.28 million direct stock sale

By Sheri Kasprzak

New York, Oct. 4 - Two biotechnology offerings headed up private placement activity Wednesday as stocks soared to record levels even as oil prices made a comeback.

Heading up those two drug deals was a $31.5 million stock sale from Acorda Therapeutics, Inc.

The shares in the deal are being sold at $9.75 each, but the exact number of shares being sold could not be determined by press time Wednesday. The price per share is a 15.2% discount to the company's $11.50 closing stock price on Tuesday.

The offering sent the company's stock down by 8.7%, or $1.00, Wednesday to close at $10.50 (Nasdaq: ACOR). The stock rebounded by 2 cents in after-hours trading.

Deal comes after financing buzz

The offering comes after a great deal of buzz about some sort of Acorda financing since the company reported positive late-stage news on its multiple sclerosis drug Fampridine-SR at the beginning of last week.

"There are no sellers to speak of," even though Acorda shares dipped on the PIPE news, a sellside trader said. "This stock is just too strong. All the institutions believe this stock is worth $15.00 to $20.00 over the next five years. They believe the data [on Fampridine] will one day merit this price movement. Acorda is in solid base formation and there are enough buyers to keep this afloat. At these levels it's truly amazing and still buyers are accumulating."

Another market source said analysts are expecting that with Wednesday's financing Acorda will have all the funding needed to bring Fampridine to market within a year and the company will generate 30 to 50 times that of the $31.5 million financing in revenues from the sales of Fampridine alone.

"I know of at least one sellside shop putting an $18.00 target on the stock for 2007," said the market source.

Proceeds from the deal will be used for sales and marketing activities, for clinical and preclinical programs and for working capital and general corporate purposes.

Located in Hawthorne, N.Y., Acorda is a biopharmaceutical company focused on treatments for multiple sclerosis, spinal cord injuries and nervous system disorders.

Dynavax plans direct deal

In other biotech news, Dynavax Technologies Corp. priced a $27.28 million direct placement that sent the company's stock up by 12.73% on the day.

Dynavax said it plans to sell 6.2 million shares at $4.40 each. The price per share is par with the company's closing stock price on Tuesday.

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

Underwriter Pacific Growth Equities, LLC has a greenshoe for up to 930,000 shares.

The stock climbed by 56 cents to end the session at $4.96 (Nasdaq: DVAX) and gained another 43 cents in after-hours activity.

The deal is scheduled to close Oct. 10.

"Earlier this month, they had the AstraZeneca deal," said one sellside trader. "There is a nice flow of good news in this name and getting the deal without having to severely discount [the stock price related to the deal] was a major coup."

The AstraZeneca plc deal with an ultimate potential payoff of $136 million to Dynavax announced Sept. 6 pushed the company's stock up by more than 10%. Dynavax inked a collaboration and license agreement with AstraZeneca for the discovery and development of agonist-based therapies for asthma and chronic obstructive pulmonary disease. It involved an upfront fee of $10 million and research funding and preclinical milestones that could add another $17 million in funding, plus royalties on commercialized products that could make the total possible deal value of about $136 million, Dynavax said.

The company also sealed a $30 million equity line with Azimuth Opportunity Fund in late August. Under the 18-month financing, Azimuth may buy shares of Dynavax at discounts ranging from 5.2% to 7% of the volume weighted average price of the stock for the 10 trading days before a draw.

Dynavax, based in Berkeley, Calif., develops treatments for cancer and allergies and is developing a vaccine for hepatitis B.

Stocks climb, oil rebounds

In the broader PIPE market, the Dow Jones Industrial Average soared to record closing levels even as oil prices crept back up.

One sellside market source said he felt this could only mean good things for the PIPE market in terms of volume.

"Now we're getting to the good part," he joked. "Stocks are taking off; we're probably going to be looking at a lot of deals in biotech, tech, communications, things in that vain."

The Dow jumped 123.27 to close at 11,850.61. The Nasdaq composite index gained 47.30 to end at 2,290.95 and the Standard & Poor's 500 composite index advanced 16.11 to close at 1,350.22.

Oil prices also climbed, gaining 73 cents Wednesday to end at $59.41 per barrel after sustaining losses and dropping to below $59 per barrel on Tuesday.

Donner's C$12.19 million deal

Looking to the Canadian PIPE market, Donner Metals Ltd. wrapped up a C$12,193,230 private placement of flow-through and non flow-through units Wednesday.

The company issued 19,063,544 flow-through units at C$0.46 each and 8.56 million non flow-through units at C$0.40 each.

The flow-through units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$0.75 through Sept. 29, 2008.

The non flow-through units include one share and one warrant. The warrants are exercisable at C$0.55 each through Jan. 30, 2007.

A portion of the offering was non-brokered and the investors in that portion include MineralFields Group, Augen LP 2006 and Augen Resource Strategy Fund, FrontierAlt Resource 2005 Flow-Through LP, Rhone 2006 Flow-Through LP, Societe d'investissement dans la diversification de l'exploration, Societe de Developpement des Enterprises Minieres et D'exploration II, and Societe de Developpement de la Baie James.

Canaccord Adams Inc. was the lead agent for the brokered portion.

Proceeds will be used for exploration on the company's Matagami project in Quebec.

After the deal was announced Wednesday afternoon, the company's stock gave up a penny to close at C$0.49 (TSX Venture: DON).

Based in Vancouver, B.C., Donner is a mineral exploration company.

Ronda Fears contributed to this report.

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