WCA Waste secures $75 million from convertibles; OccuLogix stock off on $30 million PIPE

By Sheri Kasprzak

New York, June 14 - WCA Waste Corp. led PIPE activity on Wednesday, announcing the pending completion of a $75 million private placement of convertible preferred stock with Ares Corporate Opportunities Fund II.

After the offering was announced late Wednesday, the stock fell by 6%, or 45 cents, to close at $7.04 (Nasdaq: WCAA).

The preferreds WCA intends to sell are convertible into common shares at $9.60 each, a 28% premium to the company's $7.40 closing stock price on Tuesday, and pay paid-in-kid dividends at 5% annually.

The company also said on Wednesday that it plans to refinance its existing senior secured debt.

"The success of this capital plan will reduce the company's leverage ratios and will result in an accretive transaction," said Tom Fatjo, WCA's chairman, in a news release. "We are excited to have Ares as a partner, given the industry expertise of several of its key executives, as well as the expanded financial flexibility this transaction provides."

Houston-based WCA processes, transports and disposes of non-hazardous solid waste.

Looking to biotech PIPEs, one trader said the small caps are finding selective buyers although there is a strong bent toward big caps in the current market.

"Big caps are looking attractive right now, but we are seeing some nibbling in the small caps, and some of these doing PIPEs right now are not even that small," said a biotech stock trader. "They are bargain hunting, looking for those that would move on news, rumors, the like. A lot of folks are sitting on some cash right now, money they took off the table waiting for the storm to pass."

Among the biotech offerings out there Wednesday, OccuLogix, Inc. said it is preparing to close a $30 million private placement of zero-coupon convertible notes.

The stock fell 8 cents, or 3.52%, to end the session at $2.19 (Nasdaq: RHEO). In Canadian activity, the stock lost 21 cents, or 7.98%, to close at C$2.42 (Toronto: RHE), even though the stock remained mostly unchanged for most of the day. One trader said the stock was finally moved by one or two sales.

The notes are convertible into common shares at $3.30 each, a 45.4% premium to the company's $2.27 closing stock price on Tuesday.

The maturity of the notes could not be determined by press time Wednesday.

Funds managed by Sowood Capital Management LP agreed to buy the notes.

The offering is scheduled to close Aug. 15.

Proceeds will be used for acquisition or investments in businesses, products or technologies complementary to its business strategy.

"It will not take much of a pop to be in the money," said a sellside trader. "But to be honest, I don't think this got much attention. This story is on the shelf, so to speak. It has had a lot of starts and stops, a lot of sputters. The picture is too unclear right now for a lot of people to get excited about it."

In April, OccuLogix said that due to a possible delay of the U.S. commercial launch of its RHEO System, it was accelerating diversification plans, focusing on age-related eye diseases, such as age-related macular degeneration and glaucoma. In February, the company reported a preliminary phase 3 trial data for the RHEO System to treat the dry form of age-related macular degeneration failed to meet the primary efficacy endpoint.

Located in Toronto, OccuLogix develops treatments for age-related eye diseases.

Clinical Data's $17 million deal

In other biotech news, Clinical Data, Inc. entered into an agreement with a group of institutional investors for a $17,000,452 private placement.

The investors plan to buy 1,039,783 shares at $16.35 each.

The investors also will receive warrants for 519,889 shares. The terms of the warrants could not be determined by press time Wednesday.

Proceeds will be used for commercializing the company's molecular diagnostics and continuing phase 3 clinical development on the company's Vilazodone product for depression.

Clinical Data shares (Nasdaq: CLDA) traded in a band of $15.51 to $17.08 on Wednesday before settling off 16 cents, or 0.98%, at $16.14. Volume in the stock was three times the norm with 30,142 shares traded.

Proceeds will be used for commercializing the company's molecular diagnostics and continuing phase 3 clinical development on the company's Vilazodone product for depression.

"It makes sense now," under these market conditions, said another trader who traffics Clinical Data. "We'll see what happens here. Let's just hope it's the market, anyway, and the bottom is not falling out of Clinical Data here."

"This transaction enhances Clinical Data's capacity to deliver shareholder value," said Drew Fromkin, the company's chief executive officer, in a statement. "We believe the additional capital will strengthen our ability to advance our key initiatives: commercializing molecular diagnostics designed to improve patient outcomes; continuing the phase 3 clinical development of Vilazodone, the company's novel dual-mechanism antidepressant while moving to spin off Vilazodone into Precigen Therapeutics; and enhancing our genetic services and analysis business while continuing to position the Vital Diagnostics division as leader in its space."

Clinical Data, based in Newton, Mass., provides molecular and pharmacogenomics services as well as genetic tests. The company is working to add novel therapeutic diagnostics to its offerings.

Pure Gold prices stock sale

Despite a continued slump in gold, Pure Gold Minerals Inc. negotiated an C$8.4 million stock offering.

The deal includes flow-through shares priced at C$0.06 each and non flow-through units priced at C$0.06 each. The exact breakdown of shares to units has not been determined.

The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$0.09 for 18 months.

Pacific International Securities Inc. is the placement agent.

"That they're able to price right in line is impressive just given the condition of gold," said one market source who saw the Pure Gold offering, which priced late Tuesday. "They're just a penny stock at that, so I guess there is a market for the smaller concerns."

The stock remained unchanged at C$0.065 Wednesday (Toronto: PUG).

Proceeds will be used for exploration and development on the High Arctic property held by De Beers Canada Inc. In its agreement with De Beers, Pure Gold may earn up to an 85% working interest in the property.

Vancouver, B.C.-based Pure Gold is a gold and diamond exploration company.

Lexicon stock climbs

After wrapping up a $75 million equity line agreement with Azimuth Opportunity Ltd., Lexicon Genetics Inc. saw its stock advance Wednesday.

The stock gained 5.61%, or 24 cents, to end the day at $4.52 (Nasdaq: LEXG).

On Tuesday, the stock lost 24 cents, or 5.31%, to close at $4.28.

Azimuth will buy shares of Lexicon over 18 months at discounts ranging from 3.75% to 5.5% of the volume weighted average price for the 10 consecutive trading days after notice of a draw. There is a $3.00 floor.

Lexicon, based in The Woodlands, Texas, is a biopharmaceutical company focused on treatments for diabetes, obesity, cardiovascular disease, neurological disorders, cancer, immune system disorders and ophthalmic disease.

Ronda Fears contributed to this story.

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