NovaGold to issue stock to Quantum; Genta plans convert sale; YM Biosciences upsizes placement

By Stephanie N. Rotondo

Portland, Ore., March 8 - The PIPE market got off to a strong start Monday, as resource exploration and biopharmaceutical companies came out with a plethora of double-digit deals.

NovaGold Resources Inc. had one of the day's largest financings, a $75 million registered direct offering of shares. The shares are being sold to a single investor, much like a similar deal announced last week for proceeds of $100 million.

Genta Inc. meanwhile said it wanted to raise $25 million via a private placement of convertible notes. Proceeds will be used to advance clinical trials.

Also, YM Biosciences Inc. announced it had increased the size of a previously announced registered direct offering of units. The company now intends to raise $17.5 million, compared with the original $15 million.

In settled transactions, Pacific Asia Petroleum Inc. pocketed $17.5 million from a registered direct offering of stock and warrants. According to a company spokesperson, the funds will be used for a planned acquisition in Nigeria.

Hathor Exploration Ltd. could take in as much as C$15 million from its planned private placement of units. Of that amount C$4.8 million is part of an over-allotment option.

And, Response Genetics Inc. is seeking nearly $4 million from a private placement of equity.

NovaGold to issue stock

NovaGold Resources will pocket $75 million from a registered direct offering of shares.

Quantum Partners Ltd., a private investment fund managed by Soros Fund Management LLC, is the investor.

The company will issue approximately 13.63 million common shares at $5.50 per share.

Last week, NovaGold also announced a $100 million financing agreement with Paulson & Co. Inc.

Proceeds from both financings will be used for exploration and development of the company's advanced properties, as well as for general corporate purposes.

"We are very pleased to have internationally recognized investors like Soros Fund Management and Paulson & Co. increase their positions in NovaGold and become two of our largest shareholders," said Rick Van Nieuwenhuyse, president and chief executive officer, in a press release.

"These groups have been following NovaGold for some time, recognizing both the near and long-term strategic value of our world-class gold and copper-gold assets. With the $175 million raised in these financings, we have fulfilled our current equity objectives and are exceptionally well positioned to advance and maximize the value of our projects for the benefit of all NovaGold shareholders."

Settlement of the Quantum deal is expected by March 11. The Paulson deal should close by March 9.

NovaGold's equity (Amex: NG) dropped 5 cents, or 0.79%, to $6.30. Market capitalization is $1.19 billion.

NovaGold Resources is a Vancouver, B.C.-based mineral exploration company.

Genta plans convert sale

Genta, a Berkeley Heights, N.J.-based biopharmaceutical company, announced a $25 million private placement of convertible notes.

The 12% notes mature in three years and are initially convertible into common stock. The conversion rate is 100,000 shares per $1,000 in notes.

Also, investors will receive warrants good for up to $10 million of additional notes. The warrants expire Fall 2011.

"This financing provides sufficient funds for more than a year of our expanded operations," said Dr. Raymond P. Warrell, Jr., chief executive officer, in a press release. "Evaluation of a potentially significant increase in overall survival from Agenda represents an especially high priority."

"We are also initiating new Phase 2a and 2b clinical trials with tesetaxel that will extend its position as the leading, development-stage, oral taxane. Assuming these new trials confirm earlier results, we envision that tesetaxel could enter Phase 3 pivotal trials in 2011. All of these potentially transforming events are now enabled with the completion of this transaction."

Settlement is expected by March 10.

Genta's stock (OTCBB: GNTA) ended unchanged at $0.0093.

YM direct placement upsized

YM Biosciences said it had lifted a previously announced registered direct offering of units to $17.5 million from $15 million.

The deal originally priced March 5.

The Mississauga, Ont.-based cancer treatment developer will sell units at $1.20 each. The units will contain one common share and one half-share warrant. Whole warrants are exercisable at $1.60 for five years.

"The funds will be used principally to fund YM's drug development activities and for general corporate purposes," the company said in a press release announcing the deal.

James Smith of the Equicom Group - which handles investor relations for YM - said in an interview with Prospect News that the financing was "important for the company to further its products."

While he declined to comment specifically on why the placement was increased, he noted that it was "pretty common" for such transactions to "sometimes get ratcheted up towards the end."

Settlement is expected by March 11.

YM's shares (Amex: YMI) gained a penny, or 0.88%, to $1.15. Market capitalization is $76.1 million.

Pacific Asia raises $17.5 million

Pacific Asia wrapped a $17.5 million registered direct offering of equity and warrants.

The deal originally priced March 3.

The company issued approximately 4.15 million common shares.

Additionally, investors received series C warrants equal to approximately 1.65 million additional shares, as well as series D warrants for the same amount of additional shares. The series C warrants are exercisable at $4.50 for 42 months, while the series D warrants are exercisable at $4.12 until Dec. 5, 2010.

According to Bonnie Tang, public relations for Pacific Asia, this is the second financing the company has undertaken this year. All told, the company has taken in $37.5 million since the beginning of 2010.

Tang said the proceeds from the financing will be used "to close a transaction announced earlier to acquire an interest in an oilfield in Nigeria." The acquisition is expected to close during the first week of April.

All in all, Pacific Asia was happy with the outcome of the deal, Tang said.

"It took us a very short time [to close]," she noted. "Everything is done on schedule."

And, the company is taking that short close as "an encouraging sign that investors see this as a good deal."

Tang was also not concerned about dilution.

"People always ask about dilution," she conceded. However, the oilfield acquisition will help the company transform from a micro-cap company to a revenue-producing company, she said. "From that standpoint, it's hard to argue that there is dilution because there will be more revenue."

Pacific Asia's equity (Amex: PAP) fell 12 cents, or 3%, to $3.88. Market capitalization is $169 million.

Pacific Asia Petroleum is a Hartsdale, N.Y.-based oil and gas company focused on China.

Hathor seeks exploration dollars

Hathor Exploration is seeking C$10.2 million via a private placement of equity, the company said in a press release.

The deal also has a C$4.8 million greenshoe.

The Vancouver, B.C.-based company will sell 4.25 million flow-through shares at C$2.40 on a bought-deal basis.

Due to its "significant treasury," Hathor was "not forced into these terms," according to JJ Jennex, investor relations. "The deal came along and made sense."

Jennex noted that Hathor was covered by analysts from six different brokerages, "so there are always discussions [about] potential financings."

The price per share, Jennex added, was "well above" the current trading price.

As one of the most active exploration companies in Saskatchewan, Jennex said the funds would "give us a good year of significant exploration."

Settlement is expected by March 18.

Hathor's stock (TSX Venture: HAT) dipped 2 cents, or 0.95%, to C$2.09. Market capitalization is C$205 million.

Response Genetics to sell shares

Response Genetics orchestrated a $3.94 million private placement of common stock, according to a press release.

The company will sell approximately 3 million shares at $1.31 per share.

The investor group expected to participate in the deal includes new and existing investors, as well as "certain funds managed by Lansdowne Partners [LP]," the release said.

Settlement is expected by March 8.

Calls and emails seeking further comment were not returned Monday.

Response's shares (Nasdaq: RGDX) improved by 2 cents, or 1.67%, to $1.22. Market capitalization is $19.4 million.

Response Genetics is a Los Angeles-based researcher and developer of clinical diagnostic tests for cancer.

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