Private placement volume gets boost from stocks; Oxigene closes $15 million deal

By Sheri Kasprzak

Atlanta, March 4 - As stocks headed upward Friday, private placement volume lifted as well to round out the week.

"Stocks are up so volume is up," said one sell-sider. "It's mostly smaller deals today, but stocks are driving issuance at any rate."

"Not only are we seeing more deals, we're also seeing companies coming back and increasing the sizes of their deals," said another sell-sider. "So that's why you're seeing increased deals. It's really just issuers seeing that they can sell more at the same price."

The Dow Jones Industrial Average closed up 107.52 at 10,940.55; the Nasdaq composite index ended up 12.21 at 2,070.61 and the S&P 500 closed up 11.65 at 1,222.12.

Higher oil prices continued to drive volume in Canada.

Oil prices edged up $0.21 to close at $53.78 per barrel on Friday.

"We are seeing more energy companies out there, so I'd say oil prices have a lot to do with it," said one Canadian sell-sider.

Heading up news Friday was a $15,012,526 direct placement closed by Oxigene Inc.

The company sold 3,336,117 shares at $4.50 each to institutional investors.

The shares are being sold under Oxigene's shelf registration.

"As is the case with most direct placements, the pricing looks good on this one," said one market source.

"So I would point to the structure of the deal more than anything. Certainly, the pharmaceutical industry is doing well and I think this company is doing okay, but I really think the pricing is a function of the structure."

Legg Mason Wood Walker, Inc. and Lazard Freres & Co. LLC were the placement agents.

"We plan to use these proceeds to accelerate the development of our current product candidates in oncology and ophthalmology," said the company's president and chief executive officer Fred Driscoll in a statement.

"In oncology, we are focused on receiving regulatory clearance in 2005 to enter into two later-stage, randomized clinical trials with CA4P, our most advanced product candidate, in combination with other currently available therapies. In ophthalmology, our goal this year is to enroll a majority of patients in our CA4P phase II study in myopic macular degeneration and be poised to move forward in the clinical aggressively in 2006 to address this debilitating disease."

Based in Waltham, Mass., Oxigene is a pharmaceutical company focused on small-molecule therapeutics used to treat cancer and eye diseases. The proceeds from the offering will be used to accelerate the development of product candidates in oncology and ophthalmology.

Oxigene's stock closed down $0.88 at $4.45 on Friday.

DEQ raises $5 million

DEQ Systems Corp. raised $5 million in a private placement.

The company issued 6,666,667 shares at $0.75 each to Special Situations Fund.

The investor will receive a warrant for one half of a share for each share purchased. The whole warrants allow for an additional share at $0.90 each for two years.

"It goes without saying that we are ecstatic about this investment," said Earle G. Hall, the company's president and chief executive officer, in a statement. "Our 2005-2007 business plan is very focused on U.S. market penetration, revenue growth projects and U.S. acquisitions. This financing will definitely help accelerate our short- and long-term goals."

Based in Levis, Quebec, DEQ provides electronic auxiliary systems for casino gaming tables. The proceeds will be used for growth.

The company's stock closed unchanged at $0.85 Friday.

Tripath raises $4.35 million

Tripath Technology Inc. wrapped a private placement for $4.35 million.

The company sold 4,833,335 shares at $0.90 each.

The investors also received warrants for 966,667 shares at $1.25 each.

"Just looking at it, the shares could have been priced quite a bit higher," said one market source. "Their stock kind of suffered for it today."

On Friday, Tripath's stock lost $0.10 to close at $1.07.

"It's really interesting because the company has had solid earnings and its stock had been performing well so it's odd that they would price the stock that low," said the source.

Rodman & Renshaw LLC was the placement agent.

Based in San Jose, Calif., Tripath manufactures digital audio amplifiers. The company plans to use the proceeds for general corporate purposes.

NeoRx closes $4.15 million deal

NeoRx Corp. said it has closed a private placement for $4.15 million.

The company sold 3.32 million shares at $1.25 each to institutional investors.

The investors in the deal also received warrants for 1,328,000 shares at $2 each for five years.

"This financing allow NeoRx to advance our promising NX 473 platinum compound into clinical trials and reflects the company's goal of developing a diverse pipeline of oncology product candidates," said Jerry McMahon, the company's chairman and chief executive officer, in a statement. "We currently plan to launch a phase II trial of NX 473 in a small-cell lung cancer in the first half of this year, with a proposed phase I/II trial in colorectal cancer to follow."

Rodman & Renshaw LLC was the placement agent.

Based in Seattle, NeoRx is a cancer therapeutics company. It plans to use the proceeds to initiate clinical trials for its NX 473 product candidate.

On Friday, the company's stock closed down $0.25 at $1.41.

Neurologix closes $3.5 million deal

Neurologix, Inc. raised an additional $700,700 to close a $3.5 million private placement.

The company sold 539,000 shares at $1.30 each.

The company also issued warrants for 135,000 shares at $1.625 each for five years.

On Feb. 10, the company raised $1,435,590 in the private placement and on Feb. 25, the company raised $1.03 million.

"We are pleased to complete this financing round and welcome the strong group of investors," said Michael Sorrell, Neurologix's chief executive officer, in a statement. "The share price for the round represented a small premium to the market price at the time Neurologix and Merlin Biomed Group, which led the round, commenced discussions regarding the transaction in early December 2004."

Based in Fort Lee, N.J., Neurologix researches and develops treatments for disorders of the brain and central nervous system. The proceeds will be used for research and development, as well as general corporate purposes.

On Friday, the company's stock closed unchanged at $2.15 Friday.

Allos Therapeutics drops

A day after closing a direct placement for $50 million, Allos Therapeutics, Inc.'s stock closed down Friday.

The company lost $0.13 to close at $2.46 Friday after gaining $0.36 Thursday to end at $2.59 after closing the offering.

The company sold shares of preferred stock at $22.10 each.

One market source said the drop in stock could be attributed to quarterly losses posted earlier in the week.

"ALTH gained after the deal closed but its stock dropped on the quarterly losses it reported Thursday," said the sell-side source.

The company reported profit losses of $5 million, or $0.16 per share for the fourth quarter, compared to earnings of $791,000 or $0.03 per share for the same quarter in 2003.

Based in Westminster, Colo., Allos is a biopharmaceutical company focused on treatments for cancer.

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