Enzo Biochem secures $46 million from direct placement; NovaDel to settle $14.24 million stock sale

By Sheri Kasprzak

New York, Dec. 15 - Enzo Biochem, Inc. and NovaDel Pharma Inc. led PIPE news after announcing their plans to settle registered direct offerings of their stock. All week, biotech companies have dominated the headlines with direct placements of stock.

The Enzo $46 million offering sent that company's stock down 7.2% Friday. The stock gave up $1.10 to close at $14.20 (Nasdaq: ENZ). Volume of Enzo shares traded Friday jumped with 971,400 shares traded compared with the average 167,803 shares.

In the deal, the company will sell 3,285,715 shares at $14.00 each, an 8.5% discount to the company's $15.30 closing stock price on Thursday.

The shares will be sold under the company's shelf registration, and the deal is set to close Dec. 20.

Lazard Capital Markets LLC was the placement agent.

Proceeds will be used for future acquisitions, clinical development, capital expenditures and working capital.

New York-based Enzo develops labeling and detection products for gene sequencing and genetic analysis.

NovaDel stock drops

NovaDel's stock also dropped on Friday after its offering was announced in the morning. The stock lost 6 cents, or 3.85%, to end the day at $1.52 (Amex: NVD).

The company on Dec. 29 will issue 9,823,983 shares at $1.45 each. The investors will receive warrants for 3,929,593 shares, exercisable at $1.70 each.

"NovaDel plans to use the proceeds of this transaction to fund the development of our growing pipeline of oral spray drug candidates and build on the recent [Food and Drug Administration] approval of our first compound, NitroMist," said Jan Egberts, the company's chief executive officer, in a statement.

"We are very excited about our development pipeline, which includes ondansetron oral spray that is currently under late-stage FDA review through our partner Hana Biosciences, Inc., two candidates projected to be submitted with the FDA for approval next year and two additional compounds we expect will enter the clinical during 2007.

"We are pleased to have the support and confidence of both new and existing institutional investors as we advance Sumatriptan oral spray and Zolpidem oral spray toward registration and continue to expand our pipeline."

NovaDel has tapped the PIPE market before. In April, the company raised $11,734,554 from the sale of 8,092,796 shares at $1.45 each.

NovaDel, based in Flemington, N.J., develops novel drug delivery systems for prescription and over-the-counter drugs.

Geron stock edges up

A day after announcing a $40 million direct placement of stock, Geron Corp.'s stock climbed slightly.

The stock gained 2.89%, or 25 cents, to settle at $8.90, but gave up 3 cents in after-hours trading (Nasdaq: GERN).

The stock slipped by 69 cents, or 7.4%, to close at $8.65 on Thursday when the deal was announced.

In the placement a group of institutional investors agreed to buy shares at $8.00 each, a 14.3% discount to the company's $9.34 closing stock price on Wednesday.

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

Proceeds will be used for clinical trials of the company's telomerase inhibitor GRN 163L and its cancer vaccine.

Geron, based in Menlo Park, Calif., develops therapeutic treatments for cancer, degenerative diseases and chronic diseases.

Overstock.com's $40 million deal

Elsewhere in the PIPE market, Overstock.com, Inc. announced that it plans to settle a $40,000,643 direct placement.

Institutional investors intend to purchase 2,734,152 shares at $14.63 each, an 8.33% discount to the company's $15.96 closing stock price on Thursday.

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

WR Hambrecht & Co., LLC was the placement agent.

Proceeds will be used for marketing, inventory purchases, working capital and general corporate purposes.

After the deal was announced Friday morning, the company's stock gained 12 cents to close at $16.08 (Nasdaq: OSTK).

Salt Lake City-based Overstock.com is an online retailer of discount, brand-name merchandise.

Javo's $21 million deal

In other PIPE news, Javo Beverage, Inc. expects to pocket $21 million from a private placement of senior convertible notes.

The 6.95% notes are due 2011 and are convertible into common shares at $1.79 each.

The investors will receive warrants for 3,519,553 shares, exercisable at $1.95 each through December 2011 and for 3,125,000 shares, exercisable at $2.24 each through December 2011.

Cowen and Co. LLC was the placement agent.

Proceeds will be used for sales, customer service, working capital and general corporate purposes.

"Our high-quality coffee and tea products have enabled Javo to supply 7-Eleven, Gordon Food Service, Shamrock Foods, Compass Group, Caribou Coffee and other highly respected organizations in the food service industry," said Cody Ashwell, the company's CEO, in a statement.

"This private placement, combined with our sales, distribution and service capabilities, will aid in achieving the scale necessary to match the substantial opportunities that we have in food service specialty beverages."

On Friday, the stock gave up 3.95%, or 6 cents, to settle at $1.46 (OTCBB: JAVO).

San Diego-based Javo manufactures coffee- and tea-based beverages and drink mixes.

USA Technologies' $8.4 million deal

Finally, USA Technologies sealed an $8.4 million private placement of stock.

The company sold 1.4 million shares at $6.00 each to a group of institutional investors. The shares were sold at a 4% discount to the company's $6.25 closing stock price on Thursday.

On Friday, the company's stock climbed by 20 cents to close at $6.45 (OTCBB: USAT).

The investors received warrants for 700,000 shares, exercisable at $6.40 each through Dec. 31, 2011.

William Blair & Co., LLC was the placement agent.

"We are pleased to have worked with William Blair & Co. for a successful and quick execution of this private placement," said George Jensen, the company's CEO, in a news release. "We believe that the company's recent strong performance and the potential future revenue growth enabled us to raise the funds from a quality group of institutional investors.

"This private placement offering reflects the capital markets' confidence in USA Technologies. The addition of cash to our balance sheet positions us well in executing our revenue growth plans."

Based in Malvern, Pa., USA Technologies provides networked credit card and non-cash systems to the vending, commercial laundry, hospitality and digital imaging sectors.

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