Acorda PIPE boosted cash following disappointing IPO, chief says; Memory secures $31.3 million

By Sheri Kasprzak

New York, Oct. 5 - A day after announcing the imminent closing of a $31.5 million private placement of stock, Acorda Therapeutics, Inc. chief executive officer Ron Cohen said the offering will help pump up the company's cash on hand after its initial public offering fell short of the intended target.

"We did not raise as much as we wanted to in our IPO," he said in an interview Thursday afternoon. "We were hoping to sell at $10 to $12 and ended up selling at $6, so we raised half. We raised $30 million instead of $60 million."

In the IPO, which closed in February, the company sold 5.5 million shares at $6.00 each, the low end of revised price talk of $6 to $7 through bookrunner Banc of America Securities LLC. The guidance on the offering was lowered from an original $11 to $13 per share.

The private placement, Cohen said, allowed the company to beef up Acorda's available cash without having to wait another year to conduct a follow-on to the IPO.

"We announced publicly that our projected capital would last up to the middle of 2007," he noted.

He added that Acorda wanted to have more than a year's worth of capital in the bank and the placement provided a quick and easy vehicle for that infusion.

In terms of the structure itself, Cohen said he prefers the simple, straight-forward path to alternatives like convertibles.

"I think if given the choice between a simple equity-for-cash deal versus a convertible, most would choose the equity for cash," he said. "Convertibles carry more uncertainty and I prefer to know what we're getting into."

PIPE will close Friday

As previously announced, Acorda will close the PIPE Friday when it issues 3,230,769 shares at $9.75 each. The price per share represents a 15.2% discount to the company's $11.50 closing stock price on Tuesday.

The stock took off on Thursday, climbing 29.24%, or $3.07, to end the session at $13.57 (Nasdaq: ACOR). On Wednesday, when the deal was announced, the stock lost $1.00, or 8.7%, to end at $10.50.

The volume of Acorda shares traded Thursday was off the charts with 13,993,861 shares traded compared with the average 1,420,490 shares.

The shares in the placement will be sold to Green Way Managed Account Series, Ltd.; Atticus Trading, Ltd.; Atticus Global Advisors, Ltd.; Visium Balanced Fund, LP; Visium Balanced Offshore Fund, Ltd.; Visium Long Bias Fund, LP; Atlas Master Fund, Ltd.; Visium Long Bias Offshore Fund, Ltd.; Pierce Diversified Strategy Master Fund LLC, Enable; Enable Operating Partners LP; Pierce Diversified Strategy Master Fund LLC, Enable; UBS O'Connor LLC FBO O'Connor PIPES Corporate Strategies Master Ltd.; Highbridge International LLC; Iroquois Master Fund Ltd.; LB I Group Inc.; Life Science Capital Master Fund; SF Capital Partners Ltd.; Third Point Offshore Fund Ltd.; Third Point Partners LP; Third Point Partners Qualified LP; Baker Biotech Fund I, LP; Baker Brothers Life Sciences LP; and 14159, LP.

Proceeds will be used for sales and marketing activities, clinical and pre-clinical programs and for working capital and general corporate purposes.

Located in Hawthorne, N.Y., Acorda is a biopharmaceutical company focused on treatments for multiple sclerosis, spinal cord injuries and nervous system disorders.

Memory's stock deal

Elsewhere in biotech offerings Thursday, Memory Pharmaceuticals Corp. said it is gearing up to wrap a private placement with Great Point Partners, MPM Capital and other investors for $31,302,000.

The offering was announced Thursday afternoon and by the end of the day, the stock had advanced by 5 cents, or 4.39%, to close at $1.19 (Nasdaq: MEMY).

In the placement, the company intends to sell 28.2 million shares at $1.11 each to the investors. The share price represents a 2.6% discount to the company's $1.14 closing stock price on Wednesday.

The investors also will receive warrants for 7.1 million shares, exercisable at $1.33 each.

The placement is set to close in at least two tranches with the first - for $26.7 million - set to settle on Oct. 16. The closing of the second tranche is subject to shareholder approval.

Proceeds will be used for clinical, pre-clinical and exploratory research programs. The rest will be used for working capital and general corporate purposes.

Connected to the offering, Vaughn Kailian, general partner of MPM Bioventures IV, LP will join Memory's board of directors.

Headquartered in Montvale, N.J., Memory develops treatments for Alzheimer's disease, schizophrenia, depression and bipolar disorder.

Dynavax's stock skyrockets

In secondary market news, Dynavax Technologies Corp. watched its stock take off Thursday after pricing a $27.28 million direct stock deal on Wednesday.

The stock gained 55.24%, or $2.74, to close out the day at $7.70 (Nasdaq: DVAX). The stock gained 12.73%, or 56 cents, to close at $4.96 Wednesday when the deal priced.

Volume of DVAX shares traded on Thursday remained high with 22,894,170 shares traded. On average, 43,489 shares of Dynavax are traded daily.

As previously announced, Dynavax intends to sell shares at $4.40 each, a price equal to the company's closing stock price on Tuesday.

The shares are being offered from the company's shelf registration.

The deal is scheduled to close Oct. 10.

Dynavax, based in Berkeley, Calif., develops treatments for cancer and allergies, and is developing a vaccine for hepatitis B.

Chembio raises $8.15 million

Rounding out a day filled with biotech offerings was an $8.15 million deal from Chembio Diagnostics, Inc.

The company issued 163 shares of series C convertible preferred stock at $50,000 each to investors led by Inverness Medical Innovations, Inc. and Crestview Capital Master, LLC.

The 7% preferreds are convertible into common shares at $0.80 each.

Of the principal of the notes, about $600,000 came from the conversion of previously outstanding debt.

The investors received warrants for 2,578,125 shares, exercisable at $1.00 each.

Midtown Partners & Co., LLC was the placement agent.

Proceeds will be used for manufacturing equipment, clinical trials, travel, investor and public relations and debt payment, as well as other general corporate purposes.

Chembio's stock gained 3.53%, or 3 cents, to close Thursday at $0.88 (OTCBB: CEMI).

New York-based Chembio develops diagnostic tests for infectious diseases like HIV.

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