Neurochem gears up to wrap $40 million convertibles; Pacific Energy reprices

By Sheri Kasprzak

New York, Nov. 6 - Neurochem Inc. led PIPE news to start out the week, announcing its plans to seal a $40 million convertible note offering.

In the broader market, stocks improved but volume remained relatively light, said one sellside market source.

On Monday, the Dow Jones Industrial Average climbed by 119.51 to end at 12,105.55. The Nasdaq composite index gained 35.16 to close at 2,365.95, and the Standard & Poor's 500 composite index edged up 15.48 to settle at 1,379.78.

"I'm not sure what's really holding [volume] back," he said. "Stocks, of course, look really strong. I think in the week things will pick up substantially."

When asked what sectors in particular to look out for in the coming week, the sellsider pointed to biotech and technology.

Speaking of biotech offerings, Neurochem's stock responded positively to the news, shrugging off early losses to gain 3.88%, or 64 cents, at the end of the session to settle at $17.12 (Nasdaq: NRMX). At 9 a.m. ET, the stock had given up 5.95%.

In the offering, Neurochem plans to issue 6% senior convertible notes due Nov. 15, 2026. The notes are convertible at a 20% premium.

The deal is slated to close Nov. 9.

After closing, investors have the option to buy up to $2.085 million in additional principal for 30 days.

FMRC Family Trust, Power Technology Investment Corp. and certain insiders of the company have agreed to buy $17.585 million of the notes.

Proceeds will be used for clinical development programs, research on new or existing products, capital expenditures and general corporate purposes.

Neurochem has turned to the PIPE market before for funding. In August, the company received a $60 million equity line.

Under the two-year line, the investor may buy shares at a 3% discount to the company's then-applicable closing stock price.

Neurochem, based in Laval, Quebec, develops treatments for amyloidosis and Alzheimer's disease.

Adventrx stock dips

In other secondary market news, Adventrx Pharmaceuticals, Inc. watched its stock drop on Monday after announcing its plans to close a $40 million stock deal later this week.

The stock settled down 9 cents, or 3.23%, to close at $2.70 Monday (Nasdaq: ANX). On Friday, when the deal was announced, the stock fell by 9.12%, or 28 cents, to end at $2.79.

Volume remained up Monday with 1,200,700 shares traded compared with the average 351,868. On Friday, 1,440,200 shares were traded compared with average 340,150 shares.

Under the terms of the direct stock deal, which is set to close Wednesday, the company plans to sell shares at $2.75 each, a 10.4% discount to the company's $3.07 closing stock price from Thursday.

The shares will be sold under the company's shelf registration.

ThinkEquity Partners LLC is the bookrunner for the deal.

San Diego-based Adventrx develops treatments for cancer and infectious diseases.

Pacific Energy reprices PIPE

Looking to Canadian offerings, Pacific Energy Resources Ltd. repriced its previously announced private placement for C$96,577,000. The company had originally planned to raise C$94.1 million in the deal.

The company now plans to sell 74.29 million subscription receipts at C$1.30 each.

Each receipt is exchangeable for units of one share and one half-share warrant once certain conditions have been met.

The whole warrants are exercisable at C$1.70 each for three years.

D&D Securities Co. is the lead agent with Octagon Capital Corp. as co-agent.

The deal priced July 10 as an offering of 62,733,333 units at C$1.50 each.

When the placement priced in July, the company's stock closed at C$1.60 per share. On Monday, the stock fell by 3 cents, or 1.96%, to end at C$1.50 (Toronto: PFE).

Based in Long Beach, Calif., Pacific Energy Resources is an oil and natural gas acquisition and development company.

Adanac Moly plans two deals

Elsewhere in Canadian PIPEs, Adanac Molybdenum Corp. said it plans to conduct two private placements for total proceeds of C$24 million. Each offering is expected to bring C$12 million.

In the first deal, the company plans to sell 11,765,000 units at C$1.02 each.

The units include one share and one warrant. The warrants are exercisable at C$1.50 for the first year, at C$1.75 each in the second year, at C$2.00 each in the third year and at C$2.25 for the fourth year.

Olympus Securities, LLC is the placement agent for the deal.

The company also plans to sell up to 11,765,000 units in a second offering, also at C$1.02 each.

The units have the same terms as the first offering.

D&D Securities Co. is the placement agent for the second deal.

The deal was announced Monday afternoon and the stock slipped by a penny to end the session at C$1.25 (TSX Venture: AUA).

Adanac, based in Vancouver, B.C., is a mineral exploration company focused on molybdenum.

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