Medivation secures $35.75 million from stock sale; Questcor plans to close $13.9 million direct placement

By Sheri Kasprzak

New York, Dec. 8 - Medivation, Inc. grabbed headlines with news that it plans to settle a $35.75 million stock offering, closing out a week filled with biotech offerings in the PIPE market consisting largely of direct placements.

"There do seem to be more direct placements at the end of the year," said a sellside market source focused on the biotech sector. "Some issuers are able to negotiate a better price with a direct placement and it's a quick way to get cash at the end of the year. Some [biotech issuers] have trials coming up in the beginning of the year and that may have something to do with it."

Medivation's offering sent the company's stock up 5.96% on Friday. The stock gained 99 cents to settle at $17.59 (Amex: MDV).

The company plans to sell 2.2 million shares at $16.25 each to a group of institutional investors on Dec. 13. The price per share is a 2.1% discount to the company's $16.60 closing stock price.

The shares will be sold under the company's shelf registration.

Cowen & Co., LLC is the bookrunner.

This is not the first time Medivation has conducted a direct placement.

The company completed a $14.25 million direct placement in May, selling 3 million shares at $4.75 each.

San Francisco-based Medivation is a biopharmaceutical company focused on small molecule drugs used to treat Alzheimer's disease, Huntington's disease and hormone-refractory prostate cancer.

Uluru stock jumps 19.8%

In secondary market action in the biotech sector, Uluru Inc.'s stock skyrocketed by 19.8% a day after the company sealed a $44.65 million private placement of stock.

The stock gained 20 cents to close at $1.21 (OTCBB: ULUR). After the deal closed Thursday, the stock gained 11%, or 10 cents, to settle at $1.01.

Volume remained elevated with 5,000 shares traded compared with the average 524 shares. On Thursday, there were 9,190 shares traded compared with the average 383 shares.

In the placement, the company issued shares at $0.95 each. Some of the shares issued were used to cancel $6.2 million in existing secured convertible debentures. The price per share is a 4.4% premium to the company's $0.91 closing stock price Wednesday.

Proceeds will be used for the company's commercialization strategy, including the launch of its first wound-care dressing.

Uluru, based in Addison, Texas, develops wound management, plastic surgery and oral care products.

Questcor's $13.9 million deal

Moving back to new offerings, Questcor Pharmaceuticals, Inc. announced it plans to complete a $13,902,500 direct placement of 10.51 million shares to institutional investors and 890,000 shares to insiders of the company.

The shares offered to the institutional investors will be sold at $1.20 each and the shares sold to insiders at $1.45 each. The price per share offered to institutional investors is a 15.5% discount to the company's $1.42 closing stock price on Thursday.

The shares will be sold under the company's shelf registration.

BMO Capital Markets was the placement.

On Friday, the company's stock dropped 11 cents, or 6.71%, to end the day at $1.53 (Amex: QSC).

Proceeds will be used for the acquisition of businesses, technologies or products; for product development; and for working capital and general corporate purposes.

Union City, Calif.-based Questcor develops treatments for neurological disorders.

Acacia raises $10 million

Also, Acacia Research Corp. plans to raise $9.996 million from a direct placement of its CombiMatrix units.

The company's stock advanced by 3.45% after the deal was announced Friday morning. The company's stock climbed 3 cents to close at $0.90 (Nasdaq: CBMX).

A group of institutional investors agreed to buy 9.8 million units of one share of Acacia Research-CombiMatrix common stock and one warrant for 1.2 shares at $1.02 each. Each of the warrants is exercisable at $0.87 for five years.

Oppenheimer & Co. Inc. was the placement agent.

Acacia is a holding company for Acacia Technologies Group and CombiMatrix Group. CombiMatrix develops technologies to identify and determine the roles of genes, gene mutations and proteins used in drug discovery and development, diagnostics, genomics, proteomics and biosensors.

In other biotech news, Ceragenix Pharmaceuticals, Inc. closed a $5 million private placement of 9% secured convertible debentures.

The debentures are due Dec. 5, 2009 and are convertible into common shares at $2.26 each. The conversion price represents an 11.8% premium to the company's $2.02 closing stock price on Wednesday. The investors received warrants for 1,162,212 shares, exercisable at $2.37 each.

Proceeds will be used for working capital.

The stock gave up 1%, or 2 cents, to close at $2.00 (OTCBB: CGXP).

Denver-based Ceragenix develops treatments for cancer, skin disorders and infectious diseases.

Gold Resource raises $5 million

Moving over to the resources sector, Gold Resource Corp. closed a $5,186,400 private placement of 4.322 million shares.

The shares were sold at $1.20 each, a 20% premium to the price per share the company sold its stock at in its initial public offering in September. In September, the company sold 4.6 million shares at $1.00 each.

"This funding will allow us to immediately initiate our feasibility study, prepare for construction of a new road that will access both our proposed mill site and new drill targets identified in our recent geochemical survey and bring in a second drill to accelerate exploration of this exciting high-grade gold and silver property," said William Reid, Gold Resource's president, in a statement. "These funds should be sufficient to get us to a production decision within our targeted time frame."

Proceeds will be used for exploration on the company's Aguila high-grade gold and silver project in Oaxaca, Mexico.

The stock gave up 2 cents to close at $1.58 on Friday (OTCBB: GORO).

Denver-based Gold Resource is a gold and silver exploration and development company.

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