Medivation to wrap $14.25 million deal; Accentia Biopharmaceuticals to settle $8.23 million PIPE

By Sheri Kasprzak

New York, May 16 - Two biotech offerings led PIPE news on Tuesday headed up by Medivation, Inc. with a $14.25 million direct placement of its stock.

On Thursday, the company intends to issue 3 million shares at $4.75 each.

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

Emerging Growth Equities, Ltd. is the placement agent.

The deal was announced Tuesday afternoon and by the end of the day, the stock had slipped 3.33%, or 17 cents, to close at $4.93 (Amex: MDV).

San Francisco-based Medivation is a biopharmaceutical company focused on treatments for Alzheimer's and Huntington's disease as well as prostate cancer.

In other biotech news, Accentia Biopharmaceuticals, Inc. is preparing to complete an $8,235,000 private placement.

The stock gave up 15% on the day after the biopharmaceutical company announced that a group of institutional investors agreed to buy shares at a 25% discount to the company's $6.67 closing stock price on May 15.

Accentia's stock dropped $1.00 to settle at $5.67 (Nasdaq: ABPI).

Accentia will sell 1,647,000 shares at $5.00 apiece and will issue warrants for 823,500 shares, exercisable at $6.59 each.

Susquehanna Financial Group, LLLP and Rodman & Renshaw, LLC were the placement agents.

In other Accentia news, the company converted $3.2 million in debt owed to Hopkins Capital Group II, LLC into common stock at $8.00 each.

"We are pleased to announce the completion of this financing," said Frank O'Donnell, Accentia's chief executive officer, in a news release. "As we prepare to commercialize our first patent-protected respiratory product, MD Turbo, later this month and commence the phase 3 trials on SinuNase this summer, we needed to balance the liquidity demands of these investments in our near and immediate-term future against multiple considerations including the cost of capital, dilution and appreciate potential of product rights and marketable securities held by the company."

Tampa, Fla.-based Accentia is a biopharmaceutical company focused on developing products to treat cancer and respiratory diseases.

eDiets.com stock drops

Elsewhere in the market Tuesday, eDiets.com, Inc. saw its stock dive more than 10.5% after announcing its first-quarter earnings and the completion of a $9,999,000 private placement to fund its acquisition of Nutrio.com.

The stock dropped 62 cents on the day, or 10.56%, to settle at $5.25 (Nasdaq: DIET).

In the placement, which was conducted to pay for the $8.5 million in up-front payments and up to $2.5 million in earn-out to finance the Nutrio.com acquisition, Prides Capital Partners, LLC agreed to buy 1.98 million shares at $5.05 each.

The price per share is a 14% discount to the company's closing stock price on Monday of $5.87.

The investor will receive warrants for 1.2 million shares, exercisable at $6.00 each for five years.

The financing is expected to close later in the week.

In addition to the news of the placement and the acquisition, eDiets also released its first-quarter earnings report.

The company sustained a net loss of $3.57 million for the quarter ended March 31, compared with a net loss of $3.47 million for the same quarter of 2005. eDiets raised $13,773,000 in revenues for the quarter, up from $13,031,000 for the same quarter of 2005.

"We continue to leverage our subscription business and related site traffic more effectively through advertising sales and e-commerce, allowing eDiets.com to capture a larger share of the substantial market for nutrition and fitness-related services, information and products," said Robert Hamilton, the company's chief financial officer, in a statement released Tuesday morning.

"This enabled us to improve our adjusted [first-quarter] operating results from the year earlier period. The acquisition of Nutrio.com will greatly expand our licensing efforts in the burgeoning private-label institutional market. This places eDiets.com in a unique position of leadership serving both the business-to-consumer and the business-to-business diet and fitness marketplace.

"Our new direct-to-consumer meal delivery business, in its testing stage, generated approximately $1 million in revenues in the quarter. We are now beginning to put dedicated advertising dollars behind this product and roll it out to a larger audience. We expect our subscription business to experience renewed growth in the second half of the year as it benefits from recently identified incremental promotional opportunities."

eDiets.com, based in Deerfield Beach, Fla., provides online diet and fitness information and advice. Nutrio.com also provides nutrition, fitness and wellness programs via the internet.

Oil prices climb, but just slightly

Even as oil prices edged back up, Canadian PIPE activity remained light Tuesday.

"It's going to take more than one day of gains," said one market source based in Vancouver, B.C. "If prices keep climbing, we're likely to see more [PIPE activity]. It's hard to say, but things have been really dead the past two days in a row."

Oil prices gained 12 cents on the day to end at $69.53 per barrel after giving up $2.63 on Monday to end the session at $69.41 per barrel.

Leading light PIPE action north of the border was a C$6,666,666 deal Canadian Royalties Inc. is planning to close soon.

Canadian Royalties said an institutional investor plans to buy 3,333,333 shares at C$2.00 each.

The proceeds from the offer will be used for exploration on the company's Raglan South nickel project. The remainder will be used for general corporate purposes.

The company's stock gained 10 cents on the day to close at C$1.85 (Toronto: CZZ).

Canadian Royalties, based in Montreal, is a mineral exploration company.

In the energy sector, Open Range Energy Corp. closed a C$5.7 million private placement of 1 million flow-through shares.

The deal was placed through a syndicate of underwriters led by GMP Securities LP.

Proceeds will be used for exploration and development.

The deal was announced late Tuesday morning, and Open Range's stock dropped 1.7%, or 7 cents, to end at C$4.07 (Toronto: ONR).

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

Avigen stock gains 7.8%

After wrapping a $21.16 million private placement late last week, Avigen, Inc.'s stock climbed more than 7.8% on Tuesday.

The stock gained 7.81%, or 42 cents, to close at $5.80 Tuesday (Nasdaq: AVGN).

On Monday, the company's stock remained unchanged at $5.38 but lost 42 cents on Friday.

In the placement, Avigen sold shares at $5.37 each to a group of investors that included Biotechnology Value Fund, Apex Capital, Federated Kaufman Fund, and Fort Mason Capital LP.

Based in Alameda, Calif., Avigen is a biopharmaceutical company focused on treatments for neurological disorders.

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