BioCryst set to close $30 million direct offering; 8x8's shares fall on word of $15 million stock deal

By Sheri Kasprzak

New York, Dec. 15 - In another day filled with biotech PIPE offerings, BioCryst Pharmaceuticals Inc. announced the pending completion of a $30 million direct placement.

The company intends to sell 2,228,829 shares at $13.46 each to a group of institutional investors under its shelf registration.

The investors in the offering include Kleiner Perkins Caufield & Byers and Texas Pacific Group Ventures.

BioCryst said it plans to use the proceeds for clinical trials on its antiviral product to treat influenza.

"This financing provides BioCryst with the resources we need to pursue broad clinical trials of peramivir in patients with season and life-threatening strains of influenza," said the company's chief executive officer, Charles Bugg, in a statement. "The threat of pandemic flu has heightened the need of antiviral agents to treat influenza. And BioCryst's scientists have the commitment and tenacity to develop important, new products like peramivir that protect the health and welfare of our nation and the rest of the world."

According to John Doerr of Kleiner Perkins Caufield & Byers, the offering was appealing because of the threat of an influenza pandemic.

"We are passionate about helping innovators address the large threat of potential pandemic," Doerr said in a statement. "Peramivir could be a powerful new antiviral and particularly help meet the needs of people in the developing world."

BioCryst, based in Birmingham, Ala., develops small-molecule pharmaceuticals to treat colon cancer, cardiovascular diseases and viral infections.

After the deal was announced Thursday morning, BioCryst's stock slipped 24 cents, or 1.54%, to close at $15.31. In after-hours trading, the company's stock lost another 13 cents.

Looking to the broader PIPE market, the recent influx of direct offerings may be due to a need for quick capital among biotech companies, according to one market source.

"I just think those guys always need to raise money and they can do it very quickly that way," said the market source when asked why there has been a sudden surge in direct deals, especially among biotechnology and technology companies.

In general, one market source said biotechnology companies have been dominating the PIPE market this week because it's getting close to the end of the year and these companies are looking to secure working capital quickly.

"[The] year's about to end, [and] a lot of them are trying to get applications in to the [Food and Drug Administration] before the year is out," he said. "They [biotech issuers] have this almost-constant need for cash, and this makes it easy for them to access that cash."

Moving to stocks, the major indexes all ended lower.

The Dow Jones Industrial Average slipped 1.84 to close at 10,881.67; the Nasdaq composite index lost 1.96 to finish at 2,260.63; and the Standard & Poor's 500 composite index edged down 1.80 to settle at 1,270.94.

CepTor's $2 million deal

Heading back to biotech offerings, CepTor Corp. wrapped a $2 million convertible debenture offering on Thursday, sending its stock down 4 cents to close at $1.00.

The 8% debenture was purchased by Cornell Capital Partners, LP.

The three-year debenture is convertible into common shares at the lesser of 105% of the closing bid price on the day before closing or 95% of the lowest closing bid price for the 20 trading days before conversion.

Cornell received a warrant for up to 1 million shares, exercisable for three years at 110% of the closing bid price on the day before closing.

Proceeds will be used to keep on schedule the company's Investigational New Drug Application for its Myodur product to treat muscular dystrophy.

"This modest financing will allow us to get the Myodur IND submitted on time in January," said William Purley, the company's chief executive officer, in a statement. "The filing of the IND will generate an additional $1.5 million contract payment from our Japanese partners, JCR Pharmaceuticals. Our next financing objective will be to raise monies to fund the upcoming phase 1/2 clinical trial for Myodur in Duchenne muscular dystrophy."

Based in Hunt Valley, Md., CepTor is a biopharmaceutical company focused on treatments for neuromuscular and neurodegenerative diseases like muscular dystrophy and multiple sclerosis.

8x8 to raise $15 million

Moving over to the tech sector, 8x8 Inc. is gearing up to settle a $15 million stock deal with two institutions.

The company intends to sell 7,142,858 shares at $2.10 each and issue warrants for 1,785,714 shares. The warrants are exercisable at $3.00 each on Dec. 19.

After the offering was announced Thursday morning, the company's stock dove 11.9%, or $0.30, to close at $2.22. The stock lost another 2 cents in after-hours trading.

The shares will be sold under the company's shelf registration.

A.G. Edwards & Sons Inc. and Griffin Securities Inc. are the placement agents for the offering.

Proceeds will be used for additional capital to scale the company's Packet8 voice-over-internet protocol services while the rest will be used for general corporate purposes and working capital.

"The market for VoIP services is one of the fastest-growing segments in telecommunications and the demand for proven, scalable voice, video and virtual office business solutions is increasing," said Bryan Martin, the company's chief executive officer, in a statement. "The support shown by our investors provides us with a strong financial position to enable us to scale and take advantage of the global opportunities before us."

Based in Santa Clara, Calif., 8x8 is a voice-over-internet protocol service provider.

Tahera wraps C$9 million deal

Looking to Canadian offerings, Tahera Diamond Corp. closed a C$9 million offering of 13,235,500 shares at C$0.68 each.

National Bank Financial Inc. led a syndicate of underwriters that placed the deal.

Proceeds will be used for the company's 2006 exploration program.

Toronto-based Tahera is a diamond exploration company.

The company's stock gained 2 cents to end at C$0.62.

Elsewhere in natural resources offering, Watch Resources Ltd. priced a C$4 million deal.

The deal includes up to 6 million common shares at C$0.25 each and up to 10 million flow-through shares at the same price.

Proceeds from the deal, which is scheduled to close Dec. 21, will be used for working capital.

The company's stock gained 10%, or C$0.02, to close at C$0.22 Thursday.

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

NGAS stock slips 1.3%

A day after wrapping a $37 million convertible note offering, NGAS Resources, Inc.'s stock fell Thursday.

The company's stock ended down 16 cents, or 1.29%, to finish at $12.24. The stock lost another penny in after-hours trading.

NGAS's stock slipped 67 cents, or 5.13%, to end at $12.40 on Wednesday when the offering was announced.

The notes are convertible into common shares at $14.34 each.

The Lexington, Ky.-based NGAS Resources focuses on natural gas development drilling.

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