Columbia Labs pockets $40 million from convertibles; World Heart stock jumps on PIPE

By Sheri Kasprzak

New York, Dec. 22 - Columbia Laboratories, Inc. settled a $40 million offering of subordinated convertible notes to wind down the week in PIPEs activity ahead of the Christmas holiday.

Meanwhile, in the broader market, one sellsider reached in the morning said pricing volume was likely to be light for the day - and he was right as most offerings announced Friday were closings.

"A lot of people are heading out early today or not even in," he noted, adding that he was planning to leave early himself. "It's really not the time to be planning or pricing anything. There may be a stray [deal] here or there, but I wouldn't count on having a super busy day."

Stocks also took a hit on Friday with the Dow Jones Industrial Average giving up 78.03 to close at 12,343.22 and the Nasdaq composite index falling 14.67 to end at 2,401.18. The Standard & Poor's 500 composite index slipped 7.54 to settle at 1,410.76.

In the Columbia offering, the company sold 8% notes convertible at $5.25 each to a group of existing institutional investors. The conversion price is a 15% premium to the average of the company's closing stock prices for the 30 trading days before closing. The notes are due Dec. 31, 2011.

On Friday, the stock gave up 14 cents, or 2.53%, to settle at $5.40. Volume took off with 809,511 shares traded compared with the average 130,711 shares.

The investors received warrants for 2.3 million shares, exercisable at $5.50 each for five years.

Rodman & Renshaw, LLC was the placement agent.

Proceeds to buy Crinone

"I want to thank these long-standing investors in Columbia for their ongoing confidence in and support of the company and its growth strategy," said Robert Mills, the company's chief executive officer, in a news release. "We plan to use the proceeds from this offering to acquire the marketing rights to Crinone progesterone gel for the U.S. market only from Serono [SA] and to purchase Serono's current inventory of that product, as well as pay other costs related to the transaction and for general corporate purposes.

"This is an important step in Columbia's plan to become a major player in women's reproductive healthcare and enables us to expand our infertility business into the reproductive endocrinology market. In addition, generating Crinone prescriptions, we aim to build relationships with additional thought leaders who can help us expand our share of the OB/GYN infertility market."

Back in March, Columbia tapped the PIPE market for $30,010,008 in proceeds, selling 7,428,220 shares at $4.04 each.

Columbia, based in Livingston, N.J., develops and commercializes reproductive health care and endocrinology products.

World Heart raises $14.1 million

In other biotech news, World Heart Corp. settled the final tranche of a $14.1 million private placement for $11.8 million and saw its stock jump by 10.61% in the process.

The company's stock took off by 3.5 cents to end the day at $0.365 after the closing was announced in the early afternoon (Nasdaq: WHRT).

The company sold a total of 56.4 million shares at $0.25 apiece to a group of investors that included Maverick Ventures Management, LLC; Special Situations Fund; Medical Strategy; Greenway Capital; and members of the company's management.

The first tranche closed in November.

Proceeds will fund operations through the start of U.S. clinical trials for the company's products in 2007 and into the second quarter of 2008.

"The enthusiastic participation of our existing and new investors demonstrates the high level of confidence they have in both the long-term success of World Heart's products and our business plans," said Jal S. Jassawalla, the company's CEO, in a statement. "This financing will enable World Heart to focus its energies on the final development, evaluation and eventual commercialization of our advanced Levacor Rotary VAD [TK].

"We have completed Levacor clinical and technical training at two prestigious medical centers in Canada and expect to initiate clinical use at these centers early next year, followed by a U.S. feasibility study in the latter half of 2007. Thus far, we have been very pleased with the performance of the Levacor in our European feasibility trial. As a result, we have seen strong worldwide interest from other leading clinical centers wishing to participate in the clinical trials."

World Heart, based in Oakland, Calif., develops mechanical circulatory support systems.

NexMed stock drops

In secondary biotech news, NexMed, Inc.'s stock dipped on Friday, a day after the company settled an $8,657,381 private placement of its stock.

The company's stock gave up a little more than a penny, or 1.51%, to close at $0.6599 (Nasdaq: NEXM). On Thursday, the stock gained 6.35% to close at $0.67.

In the offering, the company sold shares at $0.6501 each to Southpoint Capital and RA Capital Management.

Based in East Windsor, N.J., NexMed develops treatments for nail fungus, sexual disorders and other ailments.

State Bancorp wraps deal

Elsewhere in PIPE news Friday, State Bancorp, Inc. wrapped a private placement of its stock for $37,788,456.

The company sold 2,196,300 shares at $16.75 each to unaffiliated investors and 53,700 shares at $18.63 each to chief operating officer Thomas O'Brien. The shares sold the unaffiliated investors were sold at a 10% discount to the company's $18.61 closing stock price on Thursday.

After the offering was announced Friday morning, the company's stock went on to gain almost 4%, closing up 74 cents at $19.35 (Nasdaq: STBC).

Sandler O'Neill & Partners, LP was the placement agent.

"We are extremely pleased with the success of this equity offering," said Thomas Goldrick, the company's CEO, in a news release. "The investors who participated clearly recognize the significant prospects for the future of our company and the strength of the management team that will lead us in the years ahead. We continue to see significant banking opportunities throughout the Long Island marketplace. This new capital enhances our ability to compete more aggressively in our marketplace and take advantage of the significant opportunities it offers."

Based in Jericho, N.Y., State Bancorp is a holding company for the State Bank of Long Island.

International Fight League's deal

Finally, International Fight League, Inc. is preparing to close a $24.22 million offering of its stock.

News of the offering sent the company's stock diving. By the end of the day, the stock had given up 26.84%, or $2.88, to close the session at $7.85 (OTCBB: IFLI). Volume also took off with 277,912 shares traded compared with the average 70,356 shares.

Investors have agreed to buy 19.376 million shares at $1.25 each.

"We are delighted that we were able to complete this financing at this very important time in the company's development," said International Fight League's chief, Gareb Shamus, in a statement. "This new capital will assist us in funding our growth. We are excited about the quality of the investors and their show of support for our company, its management team and the sport of mixed martial arts."

New York-based International Fight League is a professional martial arts sports league.

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