Private placements remain weak on mixed stocks; Victhom prices C$18 million deal

By Sheri Kasprzak

Atlanta, March 10 - Private placement volume remained flat Thursday as stock ended mixed and oil prices dropped.

"[There] have been a couple of deals but nothing I can point to in particular," said one Canadian market source when asked about volume there.

"It's been pretty slow lately," said another sell-sider in the United States. "I just think issuers are waiting for some stability. Once the market in general stabilizes, we should see some deals from oil companies, resources companies and [biopharmaceutical] companies."

The Dow Jones Industrial Average ended the day up 45.89 to close at 10,851.51; the Nasdaq composite index closed down 1.57 at 2,059.72 and the S&P 500 gained 2.24 to close at 1,209.25.

Oil dropped $1.23 to close at $53.54.

Leading private placement news Thursday was Victhom Human Bionics Inc., which said it plans to raise C$18 million in an offering of convertible debentures.

The debentures mature March 17, 2010, bear interest at 7% annually and are convertible into common shares at C$1.45 each, a 23% premium to the company's closing price March 9.

The company will also issue warrants equal to half of the number of share issued upon conversion. The warrants are exercisable at C$1.60 each for five years.

"It's a good deal for them, obviously," said one market source of the deal. "It's a solid premium. I think they managed that pricing because of the specialty of their business. When you have a solid footing in a particular industry, it becomes more appealing to investors. Less competition."

The offering is being placed through a syndicate of underwriters led by Dundee Securities Corp.

"Victhom is currently in an excellent position to support its technological and commercial development and is pleased that it has attracted more than 90% of the funds from this financing from U.S. institutional investors," said Benoit Cote, the company's chief executive officer, in a statement.

"Victhom has achieved all of the objectives it set during its last financing round in April 2004 and its bionic leg has now reached the marketing phase. Victhom has also made certain strategic acquisitions and signed license agreements that have today allowed Victhom to enter a second major phase of value creation. By investing in Victhom, the investors are acknowledging the soundness and potential of our development strategy."

Based in Quebec City, Victhom develops and commercializes bionic devices aimed at people suffering from physical dysfunctions. The proceeds will be used to accelerate the development of the company's Bionic Closed Loop System platform.

On Thursday, the company's stock closed up C$0.03 at C$1.21.

Virginia Gold greenshoe fully exercised

Virginia Gold Mines Inc. said the over-allotment option was completely exercised on a C$16,113,000 private placement it closed Thursday.

The company sold a total of 3.93 million units at C$4.10 each. One million of the units were sold through the greenshoe.

The units are comprised of one share and one quarter-share warrant. The whole warrants allow for an additional share at C$5.40 each for 18 months.

"I think it's a testament to the gold industry right now," said one Canadian market source. "Resources like gold are doing incredibly well, not really showing any signs of slowing down. So the fact that the greenshoe was fully exercised says to me that the sector is still strong."

The deal was placed through a syndicate of underwriters led by Orion Securities Inc. and BMO Nesbitt Burns Inc.

Based in Quebec City, Virginia Gold Mines is a gold mining and exploration company. The proceeds will be used for the advancement of its Eleonore property and for general corporate purposes.

Virginia Gold's stock closed down C$0.06 at C$4.87 Thursday.

ImaRx raises $7 million

ImaRx Therapeutics, Inc. received $7 million from a private placement of stock, the company said Thursday.

The company sold 2.3 million shares at $3.04 each.

The proceeds from the offering will be used for clinical trials for its lead technology, SonoLysis.

"SonoLysis, our clot-dissolving technology, is potentially applicable to more patients across multiple indications than existing FDA-approved therapies," said ImaRx's chairman and executive vice president John Moore in a statement. "In addition to funding multiple clinical trials of SonoLysis, monies raised from this private offering will be used to continue to protect and expand our substantial intellectual property portfolio in NanoInvasive medicine and to hire additional key management. In a separate transaction, using funds from outside this raise, we have taken the opportunity to buy back all debt from a former industry partner at a substantial discount."

First Montauk Securities Corp. was the placement agent.

Based in Tucson, Ariz., ImaRx is a biopharmaceutical company focused on the development of therapies for stroke and cancer.

Odyssey closes $6.75 million offering

Odyssey Marine Exploration, Inc. wrapped a $6.75 million private placement.

The company issued 2.7 million shares at $2.50 each.

The investors also received warrants for a total of 2.7 million shares at $3.50 each through March 9, 2007.

"[Its] stock responded for certain," said one market source. "It looks right in line to me."

The closing was first announced Thursday morning. At the end of the day, Odyssey's stock had climbed $0.22 to close at $2.67.

Based in Tampa, Odyssey Marine is a deep-ocean shipwreck exploration company. It plans to use the proceeds to acquire additional equipment and technology to expand its search and recovery capabilities. The remainder will be used for upcoming search operations and for general corporate purposes.

Callisto wraps $3.02 million deal

Callisto Pharmaceuticals, Inc. said it finished a private placement for $3,024,800.

The company sold 1.99 million shares at $1.52 each.

"We are pleased with the confidence and support this excellent group of investors has shown Callisto by its participation in this financing," said the company's chief executive officer Gary Jacob in a statement. "Callisto intends to use the net proceeds from the private placement to further the clinical trials of our two lead drug candidates, Annamycin and Atiprimod."

Based in New York, Callisto is a biopharmaceutical company focused on developing drugs to treat cancer and osteolytic bone disease. The company plans to use the proceeds for clinical trials of two drug candidates.

On Thursday, Callisto's stock closed unchanged at $1.50.

Boston Life continues gains

Boston Life Sciences, Inc. continued to see a rise in its stock price a day after announcing the completion of a $5 million private placement.

The company's stock gained $0.15 Thursday to close at $2.26.

On Wednesday, when the deal was wrapped, the company's stock gained $0.38 to close at $2.11 and gained another $0.10 in after-hours trading.

"It was priced at a good premium and I think the stock is still responding well to that," said one market source familiar with the deal.

The company sold shares at $2.50 each.

Based in Boston, Boston Life Sciences is a research and clinical development company focused on therapeutic products for the central nervous system.

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