China Natural Resources to pocket $35 million from private placement of units

By Sheri Kasprzak

New York, Aug. 8 - China Natural Resources, Inc. led PIPE action on Wednesday with plans to raise $35 million from an offering of units.

Elsewhere, PIPEs from biotech companies continued to pop up in the market on Wednesday as stocks in that sector continued to climb.

"Biotech stocks are building up some good steam," said one sellside market source. "We're seeing quite a few offerings coming up."

Even though the sellsider could not identify the particular issuers, he did note that most of the offerings he's seeing are from drug makers rather than medical device or similar companies.

Moving back to the China Natural deal, a group of six foreign investors plans to buy 2,187,500 units from the company at $16.00 each. The units consist of two shares and one warrant. The warrants are exercisable at $10.00 each for three years.

At the end of the day, China Natural's stock had fallen by 45 cents, or 5.03%, to close at $8.50 (Nasdaq: CHNR).

The placement is set to close on Aug. 26.

"We are pleased that there is significant investor interest in our operations and that investor confidence enabled us to negotiate advantageous terms that are not believed to be toxic to us or our shareholders," said Li Feilie, the company's president, in a statement.

"We expect to use the proceeds to be received at the closings of these subscription agreements to enhance shareholder values through the acquisition of mining operations in the PRC that we anticipate will complement our existing mining operations and be accretive to earnings."

Hong Kong-based China Natural Resources is a mineral exploration company focused on properties in the People's Republic of China.

Oculus closes deal

Looking at those biotech deals, Oculus Innovative Sciences secured $10.108 million from the sale of 1,263,500 shares at $8.00 each.

The institutional investors that purchased the stock also received warrants for 417,000 shares, each exercisable at $9.50.

Proceeds will be used for ongoing phase 2 clinical trials of its Microcyn technology to treat mildly infected diabetic foot ulcers. The remainder will be used for phase 3 trials and operations.

On Wednesday, the company's stock settled down 63 cents, or 6.75%, to close at $8.70 but gained 3 cents in after-hours trading (Nasdaq: OCLS).

Petaluma, Calif.-based Oculus develops products to treat and prevent infections in chronic and acute wounds.

Oragenics settles PIPE

In other biotech offerings, Oragenics, Inc. sealed a $1.17 million private placement of stock.

The company sold 4.6 million shares, with most of the shares priced at $0.25 each. Of the total shares, the company's new director, Ronald P. Evens, bought 45,454 shares at a higher price of $0.44 each for $20,000.

The investors also received warrants for 4.6 million shares, exercisable at $0.58 each for one year.

The company's stock gained 2 cents, or 4.55%, to close at $0.46 (Amex: ONI) on Wednesday.

Proceeds will be used for the clinical development of the company's technologies and for general corporate purposes.

"The successful completion of this financing strengthens our balance sheet and provides us with the necessary capital to continue to advance clinical and preclinical work on our key development programs," said chief executive officer Robert Zahradnik, in a statement.

"This is also an important step for returning Oragenics to compliance with Amex's continued listing standards. I appreciate the confidence that these investors have shown in the company and in its core technologies."

Based in Alachua, Fla., Oragenics develops therapeutic products for infectious diseases and cancer.

NPS Pharma stock climbs

In secondary market news in the biotech sector, NPS Pharmaceuticals, Inc.'s stock edged up by 2.94% on Wednesday, a day after the company closed a $50 million private placement of convertible notes.

The stock gained 12 cents to end at $4.20 (Nasdaq: NPSP). On Tuesday, when the deal closed, the stock had settled up 19 cents, or 4.88%, to close at $4.08.

Visium Asset Management, LLC bought the 5.75% notes due 2014, which are convertible into common shares at $5.44 each, a 30% premium to the five-day volume weighted average price of the company's stock between July 31 and Aug. 6.

Proceeds will be used to retire half of the company's 3% convertible debt due June 2008.

Located in Parsippany, N.J., NPS develops small molecules and recombinant proteins to treat metabolic, bone and mineral and central nervous system diseases.

Callisto stock slips

In other biotech secondary market news, Callisto Pharmaceuticals, Inc.'s stock settled down on Wednesday after the company wrapped an $11,245,500 offering of series B convertible preferred stock.

The stock ended down 5 cents, or 6.94%, to close at $0.67 (Amex: KAL) on Wednesday. The company's stock closed unchanged at $0.72 on Tuesday.

The company issued 1,124,550 shares of the preferred stock at $10.00 apiece to a group of investors led by RAB Special Situations (Master) Fund Ltd. and Absolute Octane Master Fund Ltd.

The preferreds are convertible into common shares at $0.50 each.

The investors also received warrants for 22.491 million shares, exercisable at $0.70 each for three years.

Proceeds will be used for clinical development of the company's Atripimod, for low- to intermediate-grade neuroendocrine carcinoma, and L-Annamcyin, for children with relapsed or refractory acute leukemia, as well as for the development of Guanilib, the company's product for gastrointestinal diseases.

Callisto, located in New York, develops drugs to treat cancer and gastrointestinal diseases.

Narrowstep raises $10.51 million

Moving to the tech sector, Narrowstep Inc. concluded a $10.51 million offering of stock with a group of investors led by RENN Capital Group.

The investors bought 42.04 million shares at $0.25 each.

The offering also included warrants for 21.02 million shares, exercisable at $0.50 each for five years.

Narrowstep's stock remained unmoved at $0.35 on Wednesday (OTCBB: NRWS).

New York-based Narrowstep provides television-on-internet technologies.

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