Novelos Therapeutics secures $15 million from preferreds; EnerJex closes $9 million PIPE

By Sheri Kasprzak

New York, April 13 - Novelos Therapeutics, Inc. capped off the week in private placements with word that it plans to settle a $15 million offering of series B convertible preferred stock.

The placement sent the company's stock up just a penny to close at $1.31 (OTCBB: NVLT).

The deal is one of several biotech offerings announced this past week.

Earlier this week, Cell Therapeutics, Inc. announced plans to close a $37.2 million direct placement of series B convertible preferreds, convertible at $1.6825 each, or at $6.73 post a one-for-four reverse stock split. On Friday, the company's stock gained 6 cents to close at $1.54 (Nasdaq: CTIC).

Seattle-based Cell Therapeutics develops treatments for cancer.

Also earlier this week, Cell Genesys, Inc. announced it will settle a $60 million direct offering of stock at $5.55 each, an 8.7% discount to the $6.08 closing stock price on Tuesday.

Cell Genesys' stock climbed 7 cents to end at $5.35 Friday (Nasdaq: CEGE).

Based in South San Francisco, Calif., Cell Genesys develops treatments for cancer.

GeoPharma, Inc. also closed a private placement this week, selling $12.5 million in convertible promissory notes. The notes are convertible at $4.36 each.

The stock lost 1.24 cents Friday to settle at $4.3676 (Nasdaq: GORX).

Based in Largo, Fla., GeoPharma develops over-the-counter, nutritional, generic drugs and functional food products.

Drug stocks climb

One sellside market source said Friday he expects more biotech offerings in the coming week as drug stocks climbed at the end of the week.

"They're looking good right now in terms of stocks," he said. "What would surprise me is if we don't see more going forward. They're practically the only thing, maybe tech too, going on right now."

Novelos terms

In the Novelos deal, a group of institutional investors that includes Xmark Opportunity Funds and OrbiMed Advisors plans to buy 1,500 shares of the 9% preferreds.

The preferreds are convertible at $1.00 each, a 23% discount from the company's $1.30 closing stock price on Thursday.

The investors will also receive warrants for 7.5 million shares, exercisable at $1.25 each for five years.

The deal is set to close within seven to 10 days.

Rodman & Renshaw, LLC is the lead agent.

"We are very pleased to have these excellent institutional investors participate in the financing, which will provide funds for Novelos's current development program through mid-2008," said Harry Palmin, the company's chief executive officer, in a statement. "Furthermore, if all the warrants are exercised for cash, Novelos would receive about $10 million of additional proceeds.

"Fundamentally, we continue to anticipate that our pivotal phase 3 lung cancer trial will be fully enrolled by the end of the first quarter of 2008. Meanwhile, we expect earlier-stage clinical trial results later this year."

Novelos last tapped the PIPE market in March 2006, selling 11.15 million shares at $1.35 each for proceeds of $15,052,500.

Located in Newton, Mass., Novelos develops treatments for cancer.

EnerJex raises $9 million

In other PIPE news to round out the week, EnerJex Resources, Inc. wrapped a $9 million offering of senior secured debentures with stock.

The company sold 10% three-year debentures on behalf of subsidiary Midwest Energy, Inc.

The investors will receive 9 million shares in the deal, representing 35% of the company's projected fully diluted shares.

The company so far has received $6.3 million in proceeds from the deal and will receive the remainder June 8.

C.K. Cooper & Co. was the placement agent.

Proceeds will be used for the acquisition and development of oil and gas assets. The rest will be used for general corporate purposes.

"We are pleased that we have been able to foster interest from several recognized energy institutional investors resulting in this $9 million private placement," said Steve Cochennet, the company's CEO, in a news release. "We believe this level of interest validates our business strategy."

On Friday, the stock remained unchanged at $1.00 (OTCBB: EJXR). The stock has not moved since April 9.

Located in Overland Park, Kan., EnerJex is an oil and natural gas exploration and development company.

Geodex prices PIPEs

In Canadian private placement activity, Geodex Minerals Ltd. said it plans to raise up to C$10 million in two private placements.

In the first the company intends to sell up to 7.5 million flow-through shares at C$1.00 each through a syndicate of agents led by Jennings Capital Inc.

The company also plans to conduct a non-brokered offering of up to 2.5 million non flow-through shares, also at C$1.00 each.

The deal is expected to close in early May, and proceeds will be used for the Sisson Brook exploration program and for working capital.

The company's stock jumped 11.96%, or 11 cents, to close at C$1.03 Friday (TSX Venture: GXM).

Based in Vancouver, B.C., Geodex is a mineral exploration company.

American Oil stock dips

As oil prices edged down and following the pricing of a $28,506,602 direct placement, American Oil & Gas Inc.'s stock slipped slightly on Friday.

The stock gave up 2 cents to close at $4.77 (Amex: AEZ). On Thursday, the company's stock fell 10.8%, or 58 cents, to close at $4.79.

In the placement, the company plans to sell shares at $4.75 each, an 11.5% discount to the company's $5.37 closing stock price on Wednesday.

The shares are being sold under the company's shelf registration through agents A.G. Edwards & Sons Inc. and C.K. Cooper & Co.

Denver-based American Oil is an oil and natural gas exploration, acquisition and development company.

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