Auxilium closes $40.18 million offering; volume unaffected by lower stocks

By Sheri Kasprzak

Atlanta, June 29 - Auxilium Pharmaceutical, Inc. led private placement news Wednesday with word that it closed a $40.18 million offering. Meanwhile, sell-siders said PIPE volume remained virtually untouched by slightly lower stocks.

Auxilium sold 8.2 million shares at $4.90 each through placement agent Deutsche Bank Securities Inc.

The deal included warrants for 2.06 million shares exercisable at $5.84 each.

"We are pleased to have completed this financing with a combination of existing and new institutional investors," said company chief executive officer Gerri Henwood, in a news release. "We welcome our new investors and thank our current investors for their continued support of Auxilium. These additional funds should help support the company's needs for commercialization and research and development efforts."

The Malvern, Pa.-based Auxilium is a pharmaceutical company focused on urology and sexual health products. After the deal was announced Wednesday morning, Auxilium's stock remained unchanged at $4.90 after making early gains.

Another Pennsylvania-based company, Huntingdon Valley's Immunicon, also closed a deal Wednesday.

The company sold 4,137,902 shares at $4.75 each in a direct placement with institutional investors.

The shares were sold under the company's shelf registration.

Legg Mason Wood Walker, Inc. was the lead agent with First Albany Capital, Inc.

The company's stock slid 10.9%, or $0.62, to close at $5.07 after the closing was announced Wednesday morning. Immunicon's stock gained $0.05 in after-hours trading.

"We plan to use these proceeds to further the development and commercialization of our cancer diagnostic products as well as for selective development of new product outside of the field of cancer," said the company's chairman and chief executive officer, Edward Erickson.

Based in Huntingdon Valley, Pa., Immunicon is a biotechnology company focused on developing treatments for cancer.

In the broader market, sell-siders said volume remained basically untouched by a slight dip in stocks Wednesday. The major indexes were off a touch as oil prices continued to slip on word that world oil supplies have increased.

Oil closed down $0.94 Wednesday to end at $57.26 per barrel.

The Dow Jones Industrial Average lost 31.15 to close at 10,374.48; the Nasdaq composite index slipped 1 to close at 2,068.89; and the S&P 500 edged down 1.72 to end at 1,199.85.

"Things actually look pretty good today," said one sell-sider based in New York. "Stocks were off, but not enough to really matter that much. I don't think volume is going to be impacted that much in the coming days."

The types of deals introduced Wednesday varied greatly. According to one sell-sider, that indicates that investors may be more interested in particular companies than in sectors.

"Investors are going to take a closer look at the issuers than they would at the sector as a whole," said that market source. "[Market] conditions have not been favorable for doing PIPEs. Stocks are still shaky and are very susceptible to the whims of oil, among other things. The reason you're not seeing more deals from certain types of companies is that, while there is a demand for these [offerings], the folks buying them are getting pickier."

Mega Bloks arranges C$68.98 million deal

Heading up Canadian offerings was a C$68,975,000 deal from Mega Bloks Inc.

The company announced its plans to sell 3.1 million subscription receipts at C$22.25 each.

The subscription receipts exchange automatically into common shares on a one-for-one basis once the company acquires Rose Art Industries, Inc. and Warren Industries, Inc.

The proceeds will be used for the acquisitions.

According to one market source who saw the deal Wednesday morning, the solid pricing of the deal was probably thanks to the acquisitions themselves.

"I have a feeling it will do very well," said the source. "Acquisitions, with some exceptions of course, are seen as positive things through the eyes of an investor. Knowing that there's another money-making vehicle, or at least some additional assets, is a good thing. Unless you're acquiring a sinking ship, and I don't think that's the case here."

Indeed, Mega Bloks' stock gained 9%, or C$2.01, on Wednesday to close at C$24.01.

The private placement is being placed through a syndicate of placement agents led by BMO Nesbitt Burns Inc. and Scotia Capital Inc.

Mega Bloks, based in Montreal, makes educational construction toys.

i2 wraps $15 million deal

Q Investments Ltd. said Wednesday that it has increased its equity holding in i2 Technologies, Inc. by buying $15 million in stock.

i2 sold 1,923,077 shares at $7.80 each to Q.

"Our latest investment in i2 demonstrates our continued confidence in the company's products, management, industry leadership and market opportunity," said Michael Diament of Q Investments in a statement. "This investment helps i2 improve its net debt position and demonstrates our commitment to i2's future."

Following word of the closing on Wednesday, i2's stock gained $0.47, or 6.18%, to close at $8.07.

Dallas-based i2 provides services to the supply chain sector.

Diamond North's C$3 million deal

Moving to the natural resources sector, Vancouver, B.C.-based Diamond North Resources Ltd. announced its plans to head to the private placement market with a C$3 million offering.

The deal includes up to 4 million units at C$0.75 each.

The units are comprised of one share and one warrant. The warrants allow for an additional share at C$1.00 each for the first year and C$1.50 each for the second year.

"Diamonds have been pretty strong lately," said one market source familiar with natural resources. "This one looks pretty good."

After the deal was announced late Tuesday, the company's stock dipped C$0.03 to end at C$0.65 Wednesday.

Diamond North is a diamond exploration company. The proceeds will be used for exploration and working capital.

Commonwealth Bankshares stock rises

A day after wrapping a $19,340,180 private placement, Commonwealth Bankshares, Inc.'s stock made gains.

The company's stock gained $0.39 to end at $21.19 Wednesday.

On Tuesday, the company's stock slid $0.19 to end at $20.80.

Commonwealth sold shares at $20.00 each in a deal placed through agent Anderson & Strudwick, Inc.

The Norfolk, Va.-based Commonwealth Bankshares is a holding company for Bank of the Commonwealth.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.