CV Therapeutics secures $200 million equity line; Scolr Pharma prepares to wrap $11.85 million stock sale

By Sheri Kasprzak

New York, April 18 - CV Therapeutics, Inc. settled the one of the biggest offerings of the year so far and the largest equity line in year - a $200 million transaction with Azimuth Opportunity Ltd.

After the offering was announced late Tuesday afternoon, CV's stock advanced 83 cents, or 3.82%, to settle at $22.55, gaining another 45 cents in after-hours trading (Nasdaq: CVTX).

On Monday, the stock lost 17 cents to end at $21.72.

Under the terms of the equity line, Azimuth agreed to buy shares of CV at discounts ranging from 3.8% to 5.8% of the daily volume weighted average price on the date of a draw. The discount will be dependent upon the company's market capitalization at the time of a draw.

CV had 45,035,370 outstanding shares as of Feb. 28.

Proceeds from the deal will be used for commercialization, product development, clinical trials and research and development.

"This type of agreement is extremely popular with biotechs," said one buysider familiar with the deal. "What if CV Therapeutics partnered with Big Pharma to provide milestone payments but split revenue on future earnings for a certain drug? Most would say it's a positive even though it would affect future earnings on a drug launch. This agreement gives CV Therapeutics more flexibility as an additional financing source if needed. That sure looks like a positive to me."

The CV offering is only slightly smaller than a $250 million equity line from Pender International Inc. That deal closed on April 5, 2005.

CV has tapped the PIPE market before, closing a $25,000,108 direct placement of stock on Feb. 4, 2005. The company issued 1,275,711 shares at $19.597 each to Acqua Wellington North American Equities Fund Ltd. under its shelf registration.

Looking to the company's latest earnings statement, CV reported a net loss of $228 million for the year ended Dec. 31, compared with a net loss of $155.08 million for the same period of 2004.

Based in Palo Alto, Calif., CV is a biopharmaceutical company focused on developing treatments for cardiovascular diseases.

Scolr Pharma's $11.85 million deal

Elsewhere in the biopharmaceutical sector, Scolr Pharma, Inc. is gearing up to settle an $11.85 million direct placement of its stock.

A group of institutions plans to buy 2.37 million shares at $5.00 each on April 20.

As of March 1, Scolr had 35,216,506 outstanding common shares.

The price per share is a 7.5% discount to the company's April 17 closing stock price of $5.41.

The stock dropped 11 cents, or 2.03%, to close at $5.30 Tuesday (Amex: DDD). The stock had gained 11 cents on Monday to close at $5.41.

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

Taglich Brothers, Inc. and Roth Capital Partners, LLC are the placement agents.

Based in Bellevue, Wash., Scolr is a pharmaceutical company focused on novel over-the-counter prescription drugs and dietary supplements.

In yet another biotech deal, Derma Sciences wrapped a $6.54 million stock offering, selling 10.9 million shares at $0.60 apiece. The investors received warrants for 2.7 million shares exercisable at $1.00 each. Taglich Brothers Inc. was the placement agent.

The stock remained unchanged at $0.90 on Tuesday (OTCBB: DSCI).

Derma Sciences settled its $6.5 million acquisition of the assets of Western Medical Ltd. Derma paid $6 million in cash and a $500,000 three-year seller note.

Tenafly, N.J.-based Western Medical produces medical textile dressing products used for wound care and support.

"Western Medical is an ideal fit for our general wound-care business," said Ed Quilty, the company's chief executive officer, in a statement. "The product lines are highly complementary and the two companies utilize the same distributor network and sales points. We are acquiring only customer lists, some equipment and the net working capital, so we should be able to immediately integrate this into Derma's existing infrastructure with a little incremental expense.

"In 2005, Western Medical's unaudited results showed revenue of approximately $6.5 million with strong gross margins. The acquisition is expected to be accretive to earnings in 2006 and significantly contribute to our overall profitability."

Derma, based in Princeton, N.J., develops wound management and skin care products.

Lakeview REIT plans C$11.5 million deal

Lakeview Hotel Real Estate Investment Trust headed up Canadian private placement activity, pricing an C$11.5 million offering of trust units.

The company intends to sell up to 3,538,462 class A trust units at C$3.25 each, a 3% discount to the company's C$3.35 closing stock price on Monday.

Wellington West Capital Inc. is the placement agent.

The offering is scheduled to close April 27.

On Tuesday, Lakeview's stock remained unchanged at C$3.35 (TSX Venture: LHR).

Proceeds from the deal will be used to fund the equity commitment associated with the acquisition of two hotels in Alberta. The rest will be used for debt reduction and working capital.

Based in Winnipeg, Man., Lakeview is a real estate investment trust that purchases and operates hotels and resorts.

Federal Trust stock dips

A day after completing an $8.5 million PIPE, Federal Trust Corp.'s stock slipped slightly, giving up 2.15% on Tuesday.

The company's stock fell 24 cents to end at $10.91 Tuesday (Amex: FDT).

On Monday, the stock dropped 5 cents to end at $11.15.

In the placement, Federal Trust issued 850,000 shares at a 10.7% discount to the company's April 13 closing stock price - $11.20.

Sanford, Fla.-based Federal Trust is the holding company for Federal Trust Bank, which operates at seven offices in Florida.

Osisko stock gains 4%

In Canadian secondary activity, Osisko Exploration Ltd.'s stock gained 4.26%, or 14 cents, to settle a C$3.43 Tuesday (TSX Venture: OSK).

On Monday, Osisko priced a C$10,075,000 private placement of units at C$3.25 each.

The stock closed down 11 cents at C$3.29 after the deal was announced Monday morning.

The units in the deal were priced at a 4% discount to the company's C$3.40 closing stock price on Thursday.

Montreal-based Osisko is a gold exploration company.

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