Hemispherx obtains $50 million equity line; Palatin Technologies will close $26.84 million unit sale

By Sheri Kasprzak

New York, April 12 - Hemispherx Biopharma, Inc. led PIPE news Wednesday sealing up a $50 million equity line with Fusion Capital II, LLC.

The stock edged up slightly after the deal was announced Wednesday afternoon, gaining a penny to close at $2.95 and moving up another 7 cents in after-hours trading (AMEX: HEB). On April 11, the stock lost 16 cents to end at $2.94.

Under the terms of the 25-month equity line, Fusion may buy shares of Hemispherx at a price equal to the lesser of lowest trade prices immediately before a draw or the three lowest closing stock prices for the 12 trading days before a draw.

Proceeds will be used for general corporate purposes.

Hemispherx received a $20 million equity line from Fusion in July 2005. The pricing terms were the same as the most recent equity line.

For the year ended Dec. 31, 2005, Hemispherx reported a net loss of $13,213,000, compared to a net loss of $23,398,000 for the same period of 2004.

Based in Philadelphia, Hemispherx is a biopharmaceutical company focused on treatments for viral and immune disorders.

Palatin's $26.84 million deal

Elsewhere in the biopharmaceutical sector, Palatin Technologies, Inc. was gearing up to complete a $26.84 million direct offering of units.

A group of investors, led by Vivo Ventures, agreed to buy 11 million units at $2.44 each.

The units consist of one share and one warrant for 0.3 of a share. The whole warrants are exercisable at $2.88 each.

MDB Capital Group LLC was the placement agent.

The deal is expected to close April 17.

The shares associated with the units will be offered under Palatin's shelf registration.

Palatin's stock advanced 6.38%, or 15 cents, to end the day at $2.50 (AMEX: PTN). On April 11, the stock lost 9 cents to end at $2.35.

Proceeds will be used for general corporate purposes.

One buysider who participated in the offering said he feels the company's stock will likely do well in the coming years.

"PTN is a solid company with an effective erectile dysfunction drug," said the buysider. "The past trials have been poorly run, but the current phase 2b is well designed and we believe it will succeed. Data is out in [third-quarter 2006]. The cash infusion came from us, as well as some other respected names and thus we have faith that the stock should do well over the next few years."

Another Palatin player, who holds the stock but did not participate in the PIPE, said he was glad the company chose a private placement rather than a follow-on equity deal.

"What the take away from the financing is that there is increased capital but there will not be an increase in liquidity. Vivo and the others are venture groups that aren't going to wreak the havoc that the hedge funds did that were all in the $1 financings and kept the stock down low. This gives the stock great growth opportunity."

In September 2005, the company sold 4.5 million shares in a private placement to King Pharmaceuticals, Inc. for $10 million as part of a collaboration agreement dating back to 2004. The company also issued to King Pharma three-year warrants to purchase 719,894 shares at a strike price of $2.22 each.

"This investment significantly enhances our financial resources and provides additional operational flexibility as we advance the clinical development of our lead product candidate, bremelanotide," said Carl Spana, the company's chief executive officer, in a statement.

"We raised this new capital from highly respected, long-term investment firms that we feel will expand the strength of our supporters in the financial markets," chief financial officer Stephen Wills said in the news release.

Palatin, based in Cranbury, N.J., is a biopharmaceutical company focused on the development of melanocortin-based therapeutics used to treat male and female sexual dysfunction.

Alexis Minerals prices C$3.5 million PIPE

Moving up to Canada, Alexis Minerals Corp. arranged a C$3.5 million unit deal made up of convertible debentures and warrants.

The company intends to sell units of C$1,000 in principal of 6% convertible debentures and 150 warrants each.

The unsecured subordinated debentures mature April 28, 2010 and are convertible after the first year into common shares. For the second year, the conversion price is C$0.75, for the third year C$0.825 and for the fourth year, C$0.9075 each.

The warrants are exercisable at C$0.75 each.

Industrial Alliance Securities Inc. is the underwriter for the deal and has a greenshoe for up to C$2.5 million.

The deal is slated to close April 28.

The proceeds will be used for exploration on the company's Lac Herbin gold project.

"This financing is structured to minimize shareholder dilution in Alexis while supporting our goal of becoming a potential mid-tier gold-producing company by 2007," said David Rigg, Alexis's CEO, in a statement. "The financing supports our gold strategy to advance Lac Herbin through underground exploration to a production decision in 2006 while also advancing gold and base metal exploration objectives across the region."

The company's stock gave up 4 cents on Wednesday to close at C$0.56 (TSX Venture: AMC).

Based in Toronto, Alexis is a mineral exploration company focused on gold and base metals.

A surge in gold prices, past $600 an ounce on Tuesday, sparked an increase in gold issuers pushing new private placement offerings Wednesday.

Among those deals were a C$2 million stock deal from San Gold Corp. and a C$1 million unit deal from Golconda Resources Ltd.

Gold prices retreated on Wednesday to end at $597.25 per ounce.

Plug Power's stock slips

After announcing a significant private placement Tuesday, Plug Power Inc.'s stock dipped on Wednesday.

The stock fell 19.36 cents, or 3.24%, to close at $5.7864 Wednesday (Nasdaq: PLUG).

On Tuesday, when the $217.25 million deal was announced, the stock gained 22.54%, or $1.10, to settle at $5.98.

Volume also backed off on Wednesday with 3,448,186 shares traded, compared to the 28,550,661 shares traded on Tuesday.

Under the terms of the placement, two Russian investors agreed to buy shares of class B convertible capital stock at $550.00 each. The capital stock is convertible into common stock at $5.50 each, a 12.7% premium to the company's $4.88 closing stock price on April 10.

Plug Power, based in Latham, N.Y., develops and commercializes fuel cell systems used in sectors like telecommunications, utilities and power supply.

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