Affymax welcomes $42 million deal; Cadence to sell stock; Frontier takes on debt; ReGen wraps deal

By Kenneth Lim

Boston, Feb. 17 - Affymax, Inc. plans to fund the development of a key product into 2011 with a $42 million private placement of stock and warrants.

Cadence Pharmaceuticals, Inc. plans to sell $86.6 million of its common stock to a number of institutional investors.

Frontier Mining Ltd. negotiated a $10 million debt facility that will allow it to repay an existing commitment and provide working capital.

ReGen Biologics, Inc. completed the second and final tranche of a stock offering for about $1.7 million.

Affymax to raise $42 million

Affymax plans to place $42 million of shares and units to new and existing investors.

The company will sell about 2.84 million common shares at $11.25 apiece for $32 million. It will also sell 652,262 units at $15.33 per unit for $10 million.

Each unit comprises one common share and one warrant for 0.65 of a share. The warrants are exercisable at $16.78 for five years.

Affymax common stock (Nasdaq: AFFY) closed at $14.12 on Tuesday, lower by 9.49% or $1.48. The company's market capitalization is $216.1 million.

The financing was led by new investor ProQuest. Existing investors Sprout Group and Bessemer Venture Partners also took part in the placement, as did new investor Biotechnology Value Fund.

Proceeds will be used to support operations, mainly to continue the development of Hematide, a Phase 3 experimental drug used to treat anemia associated with chronic kidney disease and cancer.

Affymax is a Palo Alto, Calif.-based biopharmaceutical company.

"This should get us well into 2011," Affymax executive director of corporate communications Sylvia Wheeler told Prospect News. "We had given guidance for $135 million in the bank for the year-end, so with this amount it gets us well into 2011, especially when you factor in certain milestone payments that we expect from [Hematide partner] Takeda."

Wheeler added that the fundraising "significantly strengthens our financial position" and is a vote of confidence from the investors.

"Certainly raising these funds in what is a very difficult environment reflects that interest and the confidence that they have in Affymax," she said.

Cadence to raise $86.6 million

Cadence Pharmaceuticals plans to raise $86.6 million through a private stock placement.

The company will sell about 12 million common shares at $7.13 apiece and five-year warrants for about 6 million shares. Each warrant has a strike price at $7.84.

Cadence common stock (Nasdaq: CADX) rose 5.31% or $0.38 to close at $7.53 on Tuesday. The company has a market capitalization of $288.9 million.

The financing was led by Venrock with participation by Frazier Healthcare Ventures, Domain Associates, Versant Ventures, New Enterprise Associates, Bay City Capital and T. Rowe Price Associates.

Cadence is a San Diego, Calif.-based biopharmaceutical company.

Frontier in $10 million debt deal

Frontier Mining announced a $10 million debt facility with a single investor, pending the completion of due diligence.

The company has already received $200,000.

The lender will also receive warrants for up to 50.1% of the company's enlarged share capital. Each warrant will be exercisable at 1.5p.

Frontier common stock (LSE: FML) dropped 13.3% or 0.1p to close at 0.65p on Tuesday. The company has a market capitalization of £1.4 million.

Proceeds will provide the company with sufficient working capital for the foreseeable future and allow it to repay its commitment to Coville Intercorp Ltd.

Based in London, Frontier is a mineral exploration and development company.

"We are extremely pleased to have signed the heads of terms which has already provided funding for the company," Frontier chairman and chief executive Brian Savage said in a press release. "This puts us in a very good position to advance the development of the Benkala copper project."

ReGen completes placement

ReGen Biologics completed the final $1.73 million of an $8.8 million stock placement.

The company sold about 495,000 common shares at $3.50 apiece in the latest tranche for $1.73 million. In the initial tranche, which closed Jan. 16, ReGen sold about 2.02 million shares at the same price.

The entire placement had 15% warrant coverage. The five-year warrants have an exercise price of $1.20.

ReGen common stock (OTCBB: RGBO) fell 21.57% or $0.55 to close at $2 on Tuesday. The company's market capitalization is $10.4 million.

Investors in the first closing also converted about $3 million of convertible notes into 989,000 common shares.

Proceeds will be used to launch the company's recently approved Menaflex collagen meniscus implant device.

ReGen, based in Franklin Lakes, N.J., develops orthopedic products.

"This financing marks a successful conclusion to the first stage of our U.S. commercialization funding strategy," ReGen chairman and chief executitve Gerald E. Bisbee, Jr. said in a statement. "We appreciate the financial support that we have enjoyed from many long-term ReGen investors."

"Surgeon enthusiasm for training is high and the capital raised from existing investors will provide us the capability to launch the Menaflex product in the U.S., conduct the first wave of surgeon training sessions, sign and support distribution partner agreements in key markets and continue with other important aspects of our commercialization plans," he added.

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