Crosstex secures $105 million for acquisition; Hana Biosciences leads biopharmaceutical offerings

By Sheri Kasprzak

New York, Oct. 19 - Even as both oil and natural gas prices slipped Wednesday, Dallas-based Crosstex Energy, LP led PIPE news with its $105 million trust unit offering.

A group of institutional investors will buy 2,850,165 senior subordinated series B units at $36.84 each.

On July 31, the company had 9,334,000 subordinated units outstanding and 8,817,646 common units outstanding.

The offering was announced Wednesday morning, but the company's stock remained unmoved, ending the day at $37.50.

The private placement is part of the midstream natural gas company's acquisition of processing and liquid assets from El Paso Corp.

The acquisition and the private placement are both scheduled to close in the fourth quarter.

Moving to Crosstex's earnings, the company posted net income of $4,484,000 for the quarter ended June 30, compared to net income of $5,941,000 for the same quarter of 2004.

As previously mentioned, oil prices slipped $1.16 to end at $62.10 Wednesday. Natural gas prices slipped $0.466 to close at $13.42 per million British thermal units.

Looking elsewhere in the PIPE market Wednesday, San Francisco's Hana Biosciences Inc. led a number of biopharmaceutical offerings with word that it is settling a $14.8 million private placement.

The sudden jump in biopharmaceutical offerings comes from an increase in the number of mergers and acquisitions in the sector, according to one market source.

"Lots of [merger and acquisition] activity," he said. "[This will] probably push a few things through. [The market] will likely stay pretty active into next week."

As to the Hana deal, the company intends to sell by Oct. 21 3.7 million shares at $4.00 each to a group of institutional investors including Lehman Brothers, Pogue Capital and Panacea Asset Management, among others.

On Aug. 15, the company had 18,316,485 outstanding common shares.

Oppenheimer & Co. Inc. is the bookrunner with Griffin Securities as a placement agent.

"Completing this financing with some of the highest-quality investors in the biotechnology sector underscores the significant potential of our clinical-stage oncology pipeline," said Mark Ahn, the company's president and chief executive officer, in a statement. "This financing allows Hana to continue to aggressively move its product candidates forward and build value for both patients and shareholders."

For the quarter ended June 30, Hana sustained a net loss of $2,085,855, compared to a net loss of $1,178,604 for the same quarter of 2004.

Hana is a biopharmaceutical company focused on cancer treatments.

Hana's stock slipped $0.16 to end at $4.43 Wednesday.

VioQuest raises $8.4 million

Elsewhere in the biopharmaceutical sector, VioQuest Pharmaceuticals, Inc. settled a private placement as part of its acquisition of Greenwich Therapeutics.

VioQuest sold 11.2 million of its shares $0.75 each to institutional investors.

The investors also received warrants for 4.5 million shares, exercisable at $1.00 each for five years.

Paramount BioCapital, Inc. was the placement agent.

The acquisition and the private placement were announced early Wednesday, and the company's stock gained 11.76%, or $0.10, to close at $0.95.

For its merger with Greenwich, VioQuest issued 17,128,790 common shares to Greenwich's former shareholders, along with warrants for 4 million shares. The five-year warrants are exercisable at $1.41 each.

The acquisition gives VioQuest the rights to two anti-cancer compounds - VQS-001 and VQD-002 - previously held by Greenwich.

"With the acquisition of these two promising oncology compounds and net proceeds from the private placement, we are well-positioned to aggressively drive the further clinical development of our therapeutics pipeline," said Daniel Greenleaf, the company's chief executive officer, in a statement. "Based on the strong body of pre-clinical data, we are very hopeful about the potential of both drug candidates to serve a tremendous need in the oncology market and look forward to continuing their respective clinical programs with two renowned cancer research centers, the Cleveland Clinical Cancer Center in Ohio and Moffitt Cancer Center in Florida."

Based in Monmouth Junction, N.J., VioQuest develops early clinical stage therapies for cancer, as well as viral and autoimmune disorders.

Beijing Med-Pharm's $6.3 million deal

Another biopharmaceutical deal, this one from Beijing Med-Pharm Corp., was also completed Wednesday.

Beijing Med-Pharm sold 4,199,981 shares at $1.50 each to institutional and accredited investors.

The company also issued warrants for 1,049,828 shares. Half of the warrants are exercisable at $1.875 each and the other half at $2.25 each.

Philadelphia Brokerage Corp. was the placement agent.

Proceeds will be used to expand the company's business in China. The rest will be used for working capital.

"The strong investor interest we have seen underscores the progress we've made as we build upon our model," said Martyn Greenacre, Beijing's chairman, in a statement. "These additional funds will enable Beijing Med-Pharm to expand upon our acquisition and licensing strategy throughout China."

Based in Plymouth Meeting, Pa., Beijing Med-Pharm is a pharmaceutical company focused on clinical trial management, product registration, market research and pharmaceutical marketing to physicians, healthcare providers and hospitals in China.

The company's stock closed unchanged at $1.49.

Superconductive Components raises $1.38 million

Looking beyond biopharmaceuticals, Superconductive Components, Inc. wrapped a $1,386,000 stock deal on Wednesday.

The company issued 693,000 shares at $2.00 each.

The investors also received warrants for 173,250 shares, exercisable at $3.00 each for five years.

In addition to the private placement, Superconductive converted $587,110 in liabilities into 293,555 common shares and warrants for 73,389 shares, exercisable at $3.00 each for five years.

"We are very pleased to have successfully completed this private equity placement," said Dan Rooney, the company's chief executive officer, in a statement. "It represents the largest single financing in the company's 18-year history and significantly strengthened our capital structure and balance sheet. This financing also enables the company to continue implementing its long-term growth strategy. Our plan is to use more of these funds to further expand manufacturing capacity in response to increased demand for our products in the photonic/optical and thin-film battery markets."

Based in Columbus, Ohio, Superconductive makes ceramics and metals for batteries, photonic/optical and high-temperature superconductive products.

The company's stock was unchanged at $2.25 Wednesday.

Sonus stock edges up

A day after wrapping a $15,678,000 private placement, Sonus Pharmaceuticals, Inc.'s stock went up slightly.

The company's stock gained a penny to end at $4.41 before losing $0.23 in after-hours trading.

Under the terms of the private placement, Sonus issued shares to Schering AG at $4.02 each as part of a licensing agreement between the two.

Based in Bothell, Wash., Sonus develops therapeutic drugs for cancer and related diseases.

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