Cytori Therapeutics secures $16.78 million from PIPE; Vical closes $10.01 million stock deal

By Sheri Kasprzak

New York, Aug. 10 - Cytori Therapeutics, Inc. headed up private placement activity as stocks climbed in the broader market after getting off to a shaky start earlier in the week.

In the Cytori deal, the company is gearing up to issue 2,918,255 shares at $5.75 each to a group of institutional investors led by Olympus Corp.

The company had 15,567,038 shares outstanding as of April 30.

The price per share is on par with the company's $5.75 closing stock price from Wednesday.

On Thursday, the company's stock edged down by 6 cents to settle at $5.69 (Nasdsaq: CYTX).

"We like [Cytori]," said one buyside source familiar with the issuer. "This [offering] looks good. It will be good for their business. We think they have some decent products and that they'll eventually have a solid pipeline. They're still developing though."

"We are pleased to have further expanded our relationship with Cytori," said Yasunobu Toyoshima, general manager of Olympus, in a news release. "The additional commitments from the strong investor syndicate reflect the unique and attractive business model that Cytori is bringing to regenerative medicine."

Piper Jaffray & Co. was the placement agent for the offering, set to close within 30 days.

Looking to the company's latest earnings statement, Cytori reported a net loss of $7.46 million for the quarter ended March 31, compared with a net loss of $4.53 million for the same quarter of 2005.

San Diego-based Cytori develops cell-based therapeutics using adult stem cell and regenerative cells derived from adipose tissue to treat cardiovascular disease, gastrointestinal disorders and other ailments.

Elsewhere in the biotech sector Thursday, Vical Inc. announced the completion of a $9,779,830 direct placement of stock and saw it stock climb in the process.

The company issued 2,050,279 shares at $4.77 each to a single institutional investor. The price per share is on par with the company's closing stock price on Tuesday.

The shares were sold under the company's shelf registration.

Proceeds will be used for ongoing programs and general corporate purposes.

The stock gained 24 cents, or 5.07%, to end the session at $4.97 (Nasdaq: VICL).

"Vijay [Samant, Vical's chief executive officer] is letting us know what the company is really worth," said one trader. "Of course, let's give him another couple of years to bring a product to market. But from my understanding, things are progressing OK still and the bets are out. We will see what Vical's future is in the next two or three years. I categorized in major bets and small hopes. There are seven major drug bets; many of those are due with an update [in] one to two years."

Vical, based in San Diego, develops DNA-based vaccines for infectious diseases and cancer.

Nido raises $22 million

Heading to the oil sector, prices dove following the revelation of a terror plot that could have impacted U.S.-based airlines.

Oil prices fell $2.35 to settle at $74.00 per barrel.

The Canadian energy sector seems to be stifled by volatile oil prices.

"There's so much instability, but energy stocks had been doing OK," said one Vancouver, B.C.-based sellside market source. "Today, things fell off because oil prices dropped. It does have an impact [on PIPEs] in terms of the impact energy shares have on volume. There are things here and there, but they seem to be driven mostly by things like acquisitions."

A rather large oil deal came Thursday from an Australian oil explorer.

Nido Petroleum Ltd. raised US$22 million in a convertible bonds offering with Merrill Lynch & Co.

The 8.5% bonds, due August 2011, are initially convertible into common shares at A$0.26 each, a 30% premium to the company's volume weighted average price for the 20 trading days before Aug. 9.

The bonds will be convertible into a maximum of 114,307,091 shares.

Proceeds will be used to for exploration and development of the company's Philippines assets. The rest will be used for working capital.

The stock closed unchanged on Thursday at A$0.19 (Australia: NDO).

Based in West Perth, Western Australia, Nido is an oil and natural gas exploration and development company.

Southern Pacific's C$15 million deal

In other oil news, Southern Pacific Resource Corp. priced a private placement of 30 million units for proceeds of C$15 million.

The units are comprised of one share and one half-share warrant. Each whole warrant is exercisable at C$0.75 for one year.

Proceeds will be used for evaluation and development drilling, seismic work and working capital.

Connected to the placement, the company will grant 3.1 million options, exercisable at C$0.50 each.

Also on Thursday, Southern Pacific announced its plans to acquire 80% interest in Bounty Developments Ltd.'s Leismer South Oil Sands assets. Southern Pacific will pay C$7.5 million with C$4.5 million to be paid in cash and the rest to be paid through the issuance of 6 million shares.

Southern Pacific's stock remained unchanged at C$0.56 (TSX Venture: STP).

Calgary, Alta.-based Southern Pacific is an oil and natural gas exploration company.

Looking to other Canadian offerings, Conporec Inc. intends to conduct two private placements - one for C$1.5 million and another for C$28.5 million

The initial offering includes up to 6 million units at C$0.25 each.

Each unit consists of one share and one warrant. Each warrant is exercisable at C$0.25 for two years.

Proceeds will be used for working capital.

The terms of the second offering have not yet been determined, but the deal is set to close before the final closing date of potential acquisitions. The offering may close in one or more tranches.

Amsterdams Effectenkantoor BV is the placement agent for both deals.

"This major investment is in line with the potential of our market and the opportunity to create a consolidation play using Conporec as the main vehicle," said Laurier Pedneault, the company's CEO, in a statement. "The financial community now recognizes the value of green investment that is based on proven technologies in a major world market trend. We are currently evaluating many acquisition targets that should enlarge our product offering and waste-management capacities both in our domestic and international markets."

Quebec City-based Conporec treats and recycles municipal solid waste using composting and sorting technologies.

Neurochem stock dips

In secondary market activity, Neurochem Inc.'s stock dropped by more than 4% on Thursday.

The company's stock gave up C$0.50 (Toronto: NRM) Thursday to close at C$11.10.

The stock climbed by 3 cents to close at C$11.60 on Wednesday a day after the company closed a $60 million equity line.

Under the terms of the two-year line, the investor may buy shares of Neurochem at a 3% discount to the company's closing stock price at the time of a draw.

Neurochem, based in Laval, Quebec, develops therapeutics to treat and prevent disorders like strokes.

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