Novadaq, Pressure BioSciences fund into 2010 with new deals; Algeta sells stock; Helphire plans deal

By Kenneth Lim

Boston, Feb. 18 - Novadaq Technologies, Inc. raised $5.15 million through a private placement of convertible debentures that it said will help keep the company funded into 2010.

Algeta ASA took in NOK 245 million, or $35 million, through a stock placement to help fund the development of a cancer treatment.

Helphire Group plc plans to raise £50 million through a sale of its common stock.

Pressure BioSciences, Inc. raised $1.8 million through a placement of convertible preferred stock that it said will help fund the company to the middle of 2010.

Novadaq wraps Fairfax deal

Novadaq settled a $5.15 million non-brokered private placement of 5% senior unsecured convertible debentures due Feb. 18, 2014.

The 5% notes mature five years and are convertible into common shares at C$2.33 per share. At maturity, Novadaq may repay the principal in cash or in common shares at a conversion price equal to the stock's 20-day weighted average trading price.

Novadaq common stock (TSX: NDQ) gained 1.05% or C$0.03 to close at C$2.88 on Wednesday. The company has a market capitalization of C$70.7 million.

Fairfax Financial Holdings Ltd. bought $5 million of the debentures, and company officers and directors bought the remaining $150,000.

Proceeds will be used to fund ongoing sales and marketing expenses, product research and development efforts and for general corporate purposes.

Toronto-based Novadaq develops medical imaging systems and real-time image-guided therapies.

Including the latest financing, the company expects to be funded "very well into 2010," Novadaq president and chief executive Arun Menawat told Prospect News.

Novadaq decided to raise capital to complement a recent technology alliance with Intuitive Surgical Inc.

"Our thinking was to get a financing done to make sure that our balance sheet is stronger," Menawat said. "This allows us to focus on our business plan so I don't have to spend time looking for money. With the partnership and with the money, we really have the resources to move the company forward. When we go to our customers we can say, look, our balance sheet is in good shape in difficult times. That's important. Our employees don't have to worry about the future of the company."

The deal's structure takes into account the size of the investor and provides the company with future flexibility, Menawat added.

"Fairfax is already an investor," he said. "The board, we had a discussion, do we want to secure the company further? And if we did something like that, we decided that the best way is with existing investors. We did have a few of our existing investors who were very interested and said we would like to hold our investment and maybe add to it, but we were doing convertible debentures and it's a relatively small amount for Fairfax, so it made sense to just do it with one group of investors rather than many small groups."

"It gives us the flexibility, if you look at the terms, it is possible that we give them cash back or shares," Menawat said. "The coupon is only 5%, and everything else was at market. So because the coupon rate is relatively attractive, we thought it was worth it for that flexibility."

Menawat said he was pleased with the final pricing.

"We were really happy with it," he said. "I don't know any other deals that have been done in the same way."

Algeta raises $35 million

Algeta placed NOK 245 million, or $35 million of its common stock.

The company sold 22.3 million shares at NOK 11 per share to existing shareholders and new institutional and professional investors led by Abingworth LLP, an international investment group that is focused on the life sciences and healthcare sectors.

Algeta common stock (OSE: ALGETA) fell 16.88% or NOK 2.20 to close at NOK 12.80 on Wednesday. The company's market capitalization is NOK 211.3 million.

The company will also open a rights offering to existing shareholders. The rights offering will comprise 3.1 million shares at the same price and could raise an additional NOK 35 million, or $5 million, if fully subscribed.

Proceeds will be used to continue the development of Alpharadin for the treatment of bone metastases in a range of cancers.

Oslo-based Algeta is a private therapeutics company dedicated to the development of novel anticancer therapeutics based on alpha particle emitting radionuclides.

"I am delighted we have been able to secure this additional funding from a wide range of existing investors and new investors," Algeta chief executive Andrew Kay said in a statement. "The fact that we have been able to raise $35 million in the present economic climate demonstrates investors' confidence in Algeta's ability to generate shareholder value via the successful development and commercialization of our lead product, Alpharadin, a next-generation alpha-pharmaceutical."

"We will use the new funds to invest in our current phase 3 clinical trial with Alpharadin, which is designed to confirm that it is a safe and effective treatment for bone metastases arising from prostate cancer and has the potential to improve patient survival times," Kay added. "In addition, we intend to broaden the overall clinical development program of Alpharadin so that we can demonstrate its potential benefit for patients with other cancers that metastasize to bone."

Abingworth partner Joe Anderson will be nominated as a new board member.

"We are delighted to be joining Algeta at such an exciting and crucial time in its development," Anderson said. "We believe the company has a breakthrough technology that will lead to an effective, safe medicine for cancer patients with bone metastases. We believe Alpharadin will be a successful drug and, with this financing in place, Algeta has the necessary resources to progress the final stages of its development."

Helphire to offer shares

Helphire Group plans to place £50 million of its stock through a private offering.

The company will sell the shares at 33p apiece. Helphire common stock (LSE: HHR) closed at 29.25p on Wednesday, lower by 3.31% or 1p.

Helphire's market capitalization is £52.6 million.

Proceeds will be used to strengthen the company's balance sheet.

Helphire is a Bath, England-based provider of non-fault accident management assistance and related services.

Pressure funds to mid-2010

Pressure BioSciences sold $1.8 million of series A convertible preferred stock through a private placement.

The preferreds were sold in $11.50 units, with each unit consisting of one preferred and two warrants. The company sold 156,980 units.

The first warrant may be exchanged for either 10 common shares or one preferred. It is exercisable at $1.25 per common share and at $12.50 per preferred for 15 months.

The second warrant is exercisable for 10 common shares at $2 per share for 30 months.

Each preferred is convertible into 10 common shares at a conversion price of $1.15 per share.

Pressure Biosciences common stock (Nasdaq: PBIO) closed flat at $0.90 on Wednesday. The company's market capitalization is $2 million.

Based in West Bridgewater, Mass., Pressure BioSciences is an early stage biotech focused on the development of pressure cycling technology.

"We believe that we now have the financial resources to continue to aggressively address our clearly stated business goals throughout all of 2009, and into mid-2010," Pressure BioSciences president and chief executive Richard T. Schumacher said in a press release.

Company chairman R. Wayne Fritzsche added: "We believe that the combination of funds received, cash on hand and ongoing sales of PCT instruments and consumables, will be sufficient to support our continuing operations through the second quarter of 2010. We further believe that this is sufficient time to make measurable progress on our very focused and specific business goals."

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