Monogram to pocket $22.54 million from $30 million note sale; Alteon raises $3 million from convertibles

By Sheri Kasprzak

New York, Jan. 12 - Two biotech names led PIPE action to round out the week as sellsiders pointed to improved drug stocks as well as better stocks overall.

"Stocks in general are up, obviously, but drug stocks are improving as well," said one West Coast-based sellside market source Friday afternoon. "Better stocks [means] more deals. It's looking good for certain."

Another sellsider based in New York agreed.

"The stocks are looking better, for certain," he said. "Plus it's the beginning of the year and that tends to be a good time for [biotech companies] to do financings."

The biotech deals Friday were led by a $30 million offering of discounted senior unsecured convertible notes from Monogram Biosciences, Inc. Monogram took in $22.542 million from the sale.

The zero coupon notes, priced at 75, are initially convertible into common shares at $2.52 each. The notes are due 2026.

Monogram's stock edged up a penny Friday to settle at $1.69 (Nasdaq: MGRM). Volume was slightly off with 606,977 shares traded compared with the average 704,575 shares.

After Dec. 31, 2009, Monogram may redeem the notes in whole or part at par plus interest.

Alfred Merriweather, the company's chief financial officer, did not return calls for comment by press time Friday.

Proceeds will be used for the commercialization of HIV and oncology assays, working capital and general corporate purposes.

In May 2006, Monogram took to the private placement sector, closing a $25 million offering of senior secured convertible notes with Pfizer, Inc. That 3% note, due May 2010, is convertible at a 20% premium to the average closing stock price for the five trading days before conversion.

Based in South San Francisco, Calif., Monogram develops treatments for cancer and other diseases.

Alteon raises $3 million

Elsewhere in the biotech sector, Alteon Inc. is gearing up to wrap a $3 million offering of 8% secured convertible notes.

The notes are convertible into any security issued by Alteon to investors in a proposed preferred stock and warrant offering. The terms of that proposed $20 million deal are still in the works.

The investors will receive warrants for 25,734,453 shares, exercisable at $0.01 each for five years. The warrants become exercisable May 31, 2007.

Rodman & Renshaw, LLC was the placement agent.

Proceeds will be used for operations as well as clinical and preclinical development programs.

Alteon's stock closed unchanged at $0.15 Friday (Amex: ALT).

Based in Parsippany, N.J., Alteon develops small molecule drugs used to prevent inflammation from cardiovascular disease and diabetes.

Chemaphor prices C$1 million deal

In Canadian biotech news, Chemaphor Inc.'s stock dove by 17.5% Friday after the company priced a C$1 million offering of units.

The stock gave up 7 cents on the day to settle at C$0.33 (TSX Venture: CFR).

In the placement, Chemaphor plans to sell 3,333,333 units at C$0.30 each, a 25% discount to the company's C$0.40 closing stock price on Thursday.

The units include one share and one warrant with each warrant exercisable at C$0.40 for two years.

Ottawa-based Chemaphor develops pharmaceuticals, skin care products, animal health products and specialty chemicals.

Huntingdon plans deal

Moving up to Canada, Huntingdon Real Estate Investment Trust negotiated the terms of a C$10,000,080 offering it plans to close during the Jan. 15 week.

The deal includes up to 4,166,700 trust units at C$2.40 each, a 1.6% discount to the company's C$2.44 closing stock price Thursday.

On Friday, the stock gave up 4 cents to close at C$2.40 (Toronto: HNT).

Desjardins Securities Inc. is the agent for the deal, which is set to close Jan. 17.

Proceeds will be used for property acquisitions and general corporate purposes.

Huntingdon has looked to the PIPE market several times, especially in 2005.

In June 2005, the company raised C$100 million from the sale of 32,727,400 trust units at C$2.75 each and the issue of C$10 million in five-year convertible debentures. The debentures were initially convertible at C$3.30 each.

In September 2005, the real estate investment trust settled a C$45,755,325 offering of 16,054,500 trust units at C$2.85 each including a partially exercised greenshoe for 2,019,413 units.

Based in Winnipeg, Man., Huntingdon is a real estate investment trust focused on commercial and industrial properties.

C2C's C$2.5 million deal

Looking to Canadian resources offerings, gold explorer C2C Inc. mapped out the details of a C$2,500,050 placement of units Friday.

The deal includes up to 7.143 million units of one share and one warrant at C$0.35 each. The warrants are exercisable at C$0.50 each for one year.

Placement agent Canaccord Capital Corp. has a greenshoe for up to C$1.015 million.

Proceeds will be used to acquire precious metals properties in Ecuador and Peru. The rest will be used for working capital.

On Friday, C2C's stock slipped by a penny to close at C$0.45 (TSX Venture: CCN).

Montreal-based C2C is a precious metals exploration company.

Serengeti stock jumps

In other resources news, a day after negotiating the terms of a C$5 million placement, Serengeti Resources Inc.'s stock advanced by 12.5%.

The company's stock gained 11 cents Friday to close at C$0.99 (TSX Venture: SIR). On Thursday, when the deal priced, the stock climbed 14.3%, or 11 cents, to end at C$0.88.

The volume of Serengeti shares traded Friday also took off with 1,298,996 shares traded compared with the average 260,806 shares.

In the non-brokered deal, Serengeti plans to sell flow-through shares at C$0.90 each and units of one share and one half-share warrant at C$0.80 each.

Proceeds will be used for exploration and drilling on the company's properties in British Columbia and for working capital.

Vancouver, B.C.-based Serengeti is a mineral exploration company focused on copper-gold and molybdenum properties in British Columbia.

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