Dyax completes $50 million deal; Achillion hopes for $42 million; Marchpole concludes £2.5 million

By Devika Patel

Knoxville, Tenn., Aug. 6 - Two pharmaceutical companies announced large private placements Wednesday as Dyax Corp. settled a loan with Cowen Healthcare Royalty Partners, LP for $50 million and Achillion Pharmaceuticals, Inc. said it will pocket between $31.13 million and $41.81 million through a private placement of units.

In Europe, London's Marchpole Holdings plc said it completed a £2.5 million sale of shares and 7% convertible loan notes.

The London-based clothing designer's shares (London: MPH) skyrocketed 31.82% Wednesday, or 3.5p, closing at 14.5p.

Dyax sees $50 million

Dyax said it has arranged a $50 million loan with Cowen Healthcare.

The Cambridge, Mass.-based pharmaceutical company's shares (Nasdaq: DYAX) rose 2%, or 9 cents, on Wednesday to close at $4.59.

The loan, which is secured by the company's phage display licensing and funded research program, matures in August 2016. It carries a 16% coupon, which is payable quarterly.

The company may prepay the loan without penalty, in whole or in part, after Aug. 5, 2011.

Cowen Healthcare also received a warrant for 250,000 shares, exercisable at $5.50 until Aug. 5, 2016.

Proceeds were used, in part, to repurchase the licensing and funded research program revenue interest the company granted to Paul Capital Partners' Paul Royalty Fund II, LP in August 2006.

"This strategic financing agreement reflects the growing value of our proprietary phage display technology and maturing licensing and funded research program pipeline," the company's chairman, president and chief executive officer, Henry E. Blair, said in a news release.

"The net proceeds realized through this financing, together with the larger retained interest in our future licensing and funded research program revenues resulting from the repurchase of Paul Royalties' interest, improve the company's cash position in a challenging financial market and support our ongoing efforts to reduce cash burn."

Cowen Healthcare co-founder and managing director Gregory B. Brown said the transaction offered a unique investment opportunity.

"Phage display, a proven and powerful drug discovery tool, has been leveraged broadly through Dyax's successful licensing and funded research program. We believe Dyax is well-positioned to capture a substantial share of the growing therapeutic antibody market, which is translating into more valuable LFRP licensing deals, and that the innovative structure of this financing enhances operating flexibility for Dyax while affording attractive investment returns."

Achillion plans $41.83 million

Pharmaceutical company Achillion has arranged a private placement of units for up to $41.81 million.

The company will sell 10,714,655 units of one common share and a quarter-share warrant at $2.9049 per unit for $31.13 million to a group of investors led by ProQuest Investments and joined by Clarus Ventures and Investor Growth Capital, Inc.

The investors may buy an additional 3,679,078 units between February 2009 and August 2009 for a total of 14,393,733 units at that price.

The whole warrants will be exercisable at $3.53 for seven years.

Lazard Freres & Co. LLC is the agent.

Settlement of the initial $31.13 million tranche is expected on Aug. 11.

Proceeds will be used to advance Achillion's pipeline of antiviral candidates for hepatitis C including ACH-1625, a lead candidate from Achillion's internal HCV protease program, and ACH-1095 (also known as GS-9525), a next generation NS4A antagonist from the company's partnership with Gilead Sciences.

"With the near-term potential for three new clinical candidates serving major markets, we've never been more excited about the breadth of Achillion's portfolio of therapeutic candidates," Achillion president and chief executive officer Michael Kishbauch said in a release.

"This financing will provide the resources to advance our two HCV candidates, each with distinct mechanisms of action that operate synergistically, to proof-of-concept, as we plan to initiate clinical studies for both ACH-1095 (now also known as GS-9525) and for ACH-1625 during 2009."

The New Haven, Conn.-based company's shares (Nasdaq: ACHN) dropped 0.7%, or 2 cents, to close at $2.82 on Wednesday.

Marchpole raises £2.5 million

Marchpole Holdings said it took in £2.5 million by selling 1.36 million ordinary shares at 11.5p and £2.34 million in 7% convertible secured loan notes.

Atlas Design AB bought the securities in a deal aimed to raise funds for growth and general working capital purposes.

The notes are due in 2011. A proportion of the notes will automatically convert into 1,374,000 shares at 11.5p per share.

Atlas may convert the remainder of the notes into a number of shares which, when added to the shares sold in the placement and the shares issued upon the automatic conversion, will amount to 29.9% of the company's issued share capital.

In addition, Atlas board member Peter Wahlberg and Atlas chief executive officer Allan Ladow have been appointed to Marchpole's board as non-executive directors.

"We are delighted to have successfully negotiated this fundraising with Atlas Design," the company's executive deputy chairman, Michael Morris, said in a press release. "The funds will enable us to pursue opportunities for growth and the investment is an endorsement of our business strategy."

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