PIPE volume cools as week winds down; Adventrx raises $20 million in stock offering

By Sheri Kasprzak

New York, July 22 - With a summer weekend awaiting, private placement issuance volume trailed off Friday.

"It's summer; it's a Friday; I'm willing to bet you people are taking off early," said one sell-sider. "It'll pick up again on Monday, don't worry. But for now, I think people are more interested in getting to the beach."

Stocks made slight gains as the week wound down but not enough to rouse issuers from their pending weekend trips.

"It really wasn't a big enough gain to make a difference today," said another market source. It's "just a lazy day, if you ask me."

The Dow closed up 23.41 at 10,651.18; the Nasdaq composite index edged up 1.14 to end at 2,179.74, and the S&P 500 gained 6.67 to close at 1,233.68.

San Diego-based biopharmaceutical company Adventrx Pharmaceuticals Inc. led private placement news to cap off the week with word that it solidified agreements for its $20 million stock offering.

The company sold 10,810,809 shares at $1.85 each to a group of institutional investors led by Icahn Partners LP and Icahn Partners Master Fund LP.

Adventrx also issued warrants for 10,810,809 shares, exercisable at $2.26 each.

CIBC World Markets was the lead placement agent on the deal.

The company's stock got a big boost from the offering, gaining more than 24%, or $0.55, to close at $2.80 Friday.

"We are pleased to have attracted highly respected investors to participate in this financing, which we believe represents a strong vote of confidence in our overall business strategy," said Evan Levine, the company's president and chief executive officer, in a statement released Friday morning. "The proceeds from this financing will allow us to focus additional attention on the clinical development of our lead compound CoFactor and will help us achieve our corporate goals of introducing new technologies for anticancer and antiviral treatments while enhancing shareholder value."

According to the company's latest earnings report, Adventrx had 54,843,551 outstanding common shares as of April 30.

The company sustained a net loss of $2,844,934 for the quarter ended March 31, up from a net loss of $710,463 over the same period in 2004.

Adventrx is focused on developing treatments for cancer and viruses.

Vasomedical's $2.5 million offering

Another health care company, this one in biotech, completed a PIPE offering late Thursday but released the details of it on Friday.

Vasomedical Inc. raised $2.5 million from a private placement of series D convertible preferred stock with three institutional investors.

The investors bought 25,000 preferreds at $100 each.

The preferreds are convertible into common shares at 85% of the volume weighted average price for five trading days before conversion. There is a $0.6606 ceiling and a $0.40 floor on the conversion price.

The preferreds pay monthly cash dividends at Prime plus 300 basis points. There is a floor of 8.5% and a ceiling of 10% on the dividends.

The investors also received warrants for 1,892,219 shares, exercisable at $0.69 each through July 19, 2010.

Wharton Capital Partners was the placement agent.

"We believe these funds combined with our recent restructuring will be sufficient to fund our business plan and capital requirements through the end of fiscal year 2006," said Thomas Glover, the company's president and chief executive officer, in a statement.

"This is an important milestone as we continue our strategy to bring the benefits of our EECPR [enhanced external counterpulsation therapy system] therapy to patients with congestive heart failure ... The proceeds will be used to educate the medical community on the benefits of EECP therapy in the treatment of congestive heart failure patients and on activities to expand reimbursement coverage with third-party payers, while continuing to promote the use of EECP therapy in the current refractory angina market segment."

Vasomedical reported having 58,552,688 outstanding common shares as of April 14.

The company suffered a net loss of $4,561,002 for the quarter ended March 31, up from a net loss of $2,663,577 for the corresponding period in 2004, according to the company's latest earnings report, released on April 14.

Based in Westbury, N.Y., Vasomedical designs noninvasive treatments for cardiovascular dysfunctions.

After the closing was announced late Thursday, Vasomedical's stock slipped $0.02 to close at $0.64, but it gained a penny in after-hours trading.

More mineral offerings from Canada

For the third straight day, Canadian offerings were dominated by mineral exploration companies as mineral prices, especially for platinum and nickel, continued to rise.

Even though volume in Canada slipped just slightly Friday, more mineral offerings found there way into the PIPE market.

"We'll definitely see quite a few of these for a while," said one Canadian market source. "We probably won't see a lot of oil until prices stabilize, but platinum, nickel, gold even are seeing some pretty good gains."

The gains, said the market source, affect more than just those particular minerals. Mining companies in general have seen a benefit.

Leading the offerings on Friday was a C$4 million deal from Vancouver, B.C.-based coalmining company Hillsborough Resources Ltd.

The company announced its plans to sell up to 2.67 million flow-through shares at C$1.50 each through placement agent Pacific International Securities Inc.

Some of Hillsborough's directors, employees and officers may buy an additional 350,000 flow-through shares at the same price.

The proceeds will be used for exploration expenses.

The offering was announced Friday afternoon, and Hillsborough's stock closed down C$0.06 to end at C$1.22.

Quaterra Resources, another Vancouver, B.C.-based company, priced a C$1.75 million unit offering on Friday.

That deal includes 5 million units at C$0.35 each.

The units are comprised of one share and one half-share warrant. The full warrants provide for an additional share at C$0.50 each for two years.

The proceeds from the non-brokered deal will be used for exploration and drilling programs on four projects in the next three months. The remainder will be used for working capital.

After the deal was announced Friday morning, Quaterra's stock slipped C$0.015 to close at C$0.385.

Quaterra is a mineral exploration company.

Abraxas stock climbs

A day after closing a $12 million private placement, Abraxas Petroleum Corp.'s stock continued to make gains.

The company's stock rose $0.22, or 5.95%, to close at $3.92 Friday.

After the closing was announced Thursday, the company's stock gained $0.19 to end at $3.70.

The San Antonio-based oil and natural gas exploitation company sold shares at $3.00 each, a 6% discount to the company's 15-day trading average.

BPZ's stock slips

Another oil exploration company, BPZ Energy Inc., saw a dip in its stock after closing a $34,398,000 private placement earlier this week.

On Friday, the company's stock dropped $0.19 to close at $5.05.

Its stock gained $0.19 to close at $5.24 on Thursday after dipping $0.45 to close at $5.05 Wednesday when the closing was first announced.

A market source familiar with the sector said earlier this week that BPZ's stock may have been pushed up on Thursday by the capital infusion.

The Houston-based BPZ sold shares at $3.00 each.

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