Aksys secures $20 million equity line; PIPE volume booms after lull

By Sheri Kasprzak

New York, Jan. 17 - As the markets reopened following a three-day weekend, PIPE volume took off Tuesday as issuers got back to business.

Aksys, Ltd. led those offerings, announcing a $20 million equity line it received from Fusion Capital Fund II, LLC.

After the agreement was announced Tuesday morning, Aksys' stock jumped 24.78%, or 14 cents, to close at $0.70 (Nasdaq: AKSY).

The offering is just one financing initiative the company sought out. According to Aksys's chief executive officer, the company is seeking other funding options.

"We are very excited to have partnered with such a well-respected investment fund as Fusion Capital," said Bill Dow, the company's president and chief executive officer, in a statement. "However, we still need to arrange, and are still pursuing, additional funding for our business."

Fusion agreed to buy shares of Aksys over 25 months - providing the company's stock price exceeds $0.10.

The company may sell up to $40,000 in shares for every trading day of the agreement.

The threshold price of the shares is equal to the lowest sale price of the company's stock during the five trading days before notice of a draw. However, for every $0.10 increase in threshold price above $0.95 the company's stock trades, Aksys may increase the daily purchase amount by another $4,000.

Proceeds will be used to finance the company's operations.

Based in Lincolnshire, Ill., Aksys produces hemodialysis products for patients suffering from kidney failure.

In the broader PIPE market, volume took off suddenly after more than a week of sluggish activity, despite a slump in stocks.

One sellsider said issuers are just getting back to work after the holidays and volume in general should pick up more steadily over the course of the week.

"It's certainly more active than it has been," the sellside source agreed when asked about volume Tuesday afternoon. "If I had to guess, I'd say we're only in the second week of January, we're just back in from the holidays, [issuers] are just now pulling some things together. It's really not so odd. It tends to happen like this in the beginning of the year."

The volume picked up even as stocks were lower. The major indexes all took a hit on Tuesday as oil prices crept upward.

The Dow Jones Industrial Average fell 63.55 to end at 10,896.32, and the Nasdaq composite index lost 14.35 to close at 2,302.69. The Standard & Poor's 500 composite index lost 4.68 to settle at 1,292.93.

Meanwhile, oil prices surged $2.39 to end the day at $66.31 per barrel.

Acadia raises $10 million

Moving to the biotechnology sector, Acadia Pharmaceuticals Inc. wrapped a $9,996,600 private placement with collaborator Sepracor Inc.

The investor bought 813,393 shares at $12.29 each. The price per share represents a 25% premium to the 30-day trailing average closing price of the company's stock as of the one-year anniversary of the collaboration.

In January 2005, the two companies entered into the collaboration to develop drug candidates for Acadia's pre-clinical drug program for central nervous system disorders.

"We are excited with the progress of our collaboration with Acadia," said Mark H.N. Corrigan, Sepracor's executive vice president of research and development, in a news release. "Their strong CNS discovery expertise and leadership position in the area of muscarinic receptor research may lead to exciting new portfolio candidates for the treatment of CNS disorders."

"Sepracor's high-quality research and development team and the complementary nature of our organizations make Sepracor an ideal partner for Acadia," said Mark Brann, Acadia's president and chief scientific officer, in a statement. "We are gratified by the confidence that Sepracor has expressed in Acadia and our collaboration."

The company settled a similar offering on April 20, 2005, selling 5,277,621 shares at $6.82125 each for $35,999,972.

On Tuesday, the company's stock gained 3 cents to close at $10.74 (Nasdaq: ACAD).

Based in San Diego, Acadia is a biopharmaceutical company focused on developing treatments for central nervous system disorders.

Matritech wraps $7 million note deal

Looking to the technology sector, Matritech raised $7 million in a private placement of secured convertible promissory notes, which were sold to a group of institutions led by SDS Capital Partners.

H&Q Life Science Investors also bought some of the notes.

The 15% notes are due Jan. 13, 2009 and are convertible into common shares at $0.61 each. The conversion price is equal to the company's closing stock price on Jan. 12.

On Tuesday, the company's stock slipped 9.6%, or 7 cents, to end at $0.66 (AMEX: MZT).

The investors also received warrants for 6,459,655 shares, exercisable for five years at $0.67 each.

Proceeds will be used for research and development, sales and marketing expenses, working capital and general corporate purposes.

Based in Newton, Mass., Matritech develops proteomics technology for a variety of cancers.

Canadian offerings led by Virgin Metals

Virgin Metals Inc. led PIPEs in Canada Tuesday, pricing a C$4.05 million offering of subscription receipts as it seeks approval from the Toronto Stock Exchange's Venture Exchange for listing.

The company intends to sell up to 9 million receipts at C$0.45 each. The receipts will be exchanged on a one-for-one basis for units of one share and one half-share warrant. The whole warrants are exercisable at C$0.60 each for two years.

The receipts will be exchanged once Virgin receives approval from the TSX Venture Exchange to list its stock.

Proceeds will be used for exploration on the company's Los Verdes property and for exploration on other properties. The rest will be used for general corporate purposes.

The company settled a similar offering on Jan. 11, selling 2.54 million units at C$0.45 each. The units were comprised of one share and one warrant. The warrants are exercisable at C$0.60 each.

Based in Toronto, Virgin Metals is a mineral exploration company.

Elsewhere in Canada, Watch Resources Ltd. priced a C$3,310,132 private placement of flow-through and non flow-through shares.

The offering includes 1,428,571 flow-through shares at C$0.35 each and 8,781,663 non flow-through shares at C$0.35 each.

The deal is slated to close on Jan. 27.

Watch's stock settled up 6.94%, or C$0.025, on Tuesday to end at C$0.385 (TSX Venture: WR).

Proceeds will be used for working capital.

Calgary, Alta.-based Watch is an oil and natural gas exploration company.

Arrowhead stock gains 4%

After announcing a $19,565,000 private placement Friday, Arrowhead Research Corp.'s stock gained more than 4% on Tuesday.

The company's stock increased 18 cents to end the day at $4.70 (Nasdaq Capital: ARWR).

On Friday, when the stock deal was announced, Arrowhead's stock settled down 3.21%.

In the offering, York Capital Management and Knott Partners, LP agreed to buy shares at $3.50 apiece.

Based in Pasadena, Calif., Arrowhead is a research company focused on nanotechnology for use in electronics, life sciences and energy.

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