Crosstex Energy seeks $100 million from units; Origen sells $46 million note with warrants

By Laura Lutz

Des Moines, April 9 - Like the day before, Wednesday featured several large deals in the PIPE market. Leading the pack was Crosstex Energy, LP, which announced a $100 million direct offering of common units.

Origen Financial, Inc. said it settled a $46 million private placement of a secured note with warrants.

In the perennially busy biotech sector, Neurogen Corp. said it has arranged a $30.6 million private placement of exchangeable preferred shares and warrants, and Antigenics Corp. said it will raise $21 million from a stock placement.

Up in Canada, Scorpio Mining Corp. said it negotiated a C$25 million private placement of convertible debentures.

Crosstex prices units

Crosstex Energy plans to sell 3,333,334 common units at $30.00 apiece in a direct placement under its existing shelf registration, according to an 8-K filing with the Securities and Exchange Commission.

Entities affiliated with Kayne Anderson Capital Advisors, LP and Swank Energy Income Advisors, LP are the investors.

The Dallas-based mid-stream natural gas company said it will use the proceeds to pay down debt.

"This transaction will enable us to continue our organic growth strategy. This equity issuance will be used to pay down our bank revolver, which will create additional financial flexibility," Barry E. Davis, president and chief executive officer of Crosstex, said in a news release.

The company's stock lost 66 cents, or 2.02%, to close at $32.05 on Wednesday (Nasdaq: XTEX).

Origen raises $46 million

Origen Financial sold a three-year 14.5% note to an affiliate of one of its principal stockholders for $46 million.

The note is secured by all of the company's assets.

Origen may choose to extend the maturity by one year.

Along with the note, the investor received warrants for 2.6 million common shares, each exercisable at $1.22 for five years.

Like Crosstex, Origin will use the proceeds to pay down bank debt.

"We are extremely pleased with this financing. Given the pending expiration of the extended term of our credit facilities, and amid difficult credit markets, we are fortunate to have arranged this financing on competitive terms. We have applied the proceeds of this financing to pay off our remaining obligations to our primary bank lender under our supplemental advance facility," Ron Klein, Origen's CEO, said in a news release.

"We are gratified that by making this investment one of our largest shareholders has confirmed his confidence in Origen," Klein added.

Southfield, Mich.-based Origen is a real estate investment trust that originates and services manufactured housing loans.

The company's stock gained 93 cents, or 68.89%, on Wednesday to close at $2.28 before losing 5.24 cents in after-hours trading (Nadaq: ORGN).

Neurogen to sell preferreds

Neurogen said it will raise $30.6 million from a private placement of 981,411 units.

The units will each consist of one exchangeable preferred share and one warrant.

Each exchangeable preferred share will be automatically exchanged for 26 common shares upon shareholder approval.

The warrants are each exercisable for 13 common shares at $2.30 per share.

Pacific Growth Equities, LLC will lead a syndicate of agents that also includes Leerink Swann & Co., Oppenheimer & Co. and Merriman Curhan Ford & Co.

Settlement is expected in a week.

Neurogen, a Branford, Conn.-based pharmaceutical company, said it will use the proceeds for clinical development of existing product candidates and other general corporate purposes.

The company also announced layoffs of about 45 people as part of an plan to focus on advancing its clinical programs in insomnia, anxiety, restless leg syndrome and Parkinson's disease.

"This financing, together with our cash and marketable securities of $42.6 million as of Dec. 31, 2007 and the operational changes announced today, enable us to get to important clinical milestones in our insomnia, anxiety, Parkinson's disease and RLS programs in 2008 and to fund our planned operations into the second half of 2009," Stephen R. Davis, Neurogen president and chief executive, said in a news release.

Neurogen's stock dropped 75 cents, or 33.63%, to close Wednesday at $1.48 before gaining back 2 cents in after-hours trading (Nasdaq: NRGN).

Antigenics eyes $21 million

Antigenics plans to sell 7 million shares at $3.00 each, along with warrants for up to 7 million shares.

The warrants will be exercisable at $3.75 per share.

Rodman & Renshaw, LLC is the agent.

Proceeds will be used primarily for funding key commercial and regulatory efforts, including the launch of Oncophage in Russia and possible filings in Europe and Canada.

Antigenics is a New York-based biotechnology company focused on cancers and infectious diseases.

Most of the proceeds will be used to fund commercial and regulatory efforts, including the launch of Antigenics' Oncophage product in Russia and possible filings in Europe and Canada.

Antigenics is no newcomer to the PIPE market. Most recently, the company raised $26.1 million from a private placement of stock and warrants that priced on Jan. 9.

The company's stock fell 29 cents, or 9.57%, on Wednesday to close at $2.74 before losing another 8 cents in after-hours trading (Nasdaq: AGEN).

Scorpio plans debentures

Moving north, Toronto-based Scorpio Mining Corp. said it negotiated a C$25 million private placement of unsecured subordinated convertible debentures.

Research Capital Corp., the underwriter, will receive a fee of C$750,000.

The debentures will mature in three years and bear interest at 7% per year, payable semi-annually. They will be convertible into common shares at C$1.55 per share.

They will not be redeemable.

Proceeds will be used for working capital for the company's Nuestra Senora project and for general corporate and administrative purposes.

Settlement of the deal is expected on April 30.

The company's shares closed up C$0.02, or 1.45%, at C$1.40 on Wednesday (Toronto: SPM).

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