Idenix negotiates $17.01 million deal with GlaxoSmithKline; Global Construction gets A$4.66 million

By Devika Patel

Knoxville, Tenn., Feb. 6 - Idenix Pharmaceuticals, Inc. arranged a $17.01 million equity placement with SmithKline Beecham Corp. The Cambridge, Mass., biopharmaceutical company also said it gave parent company GlaxoSmithKline plc exclusive worldwide rights to a new HIV/AIDS treatment.

Blackhawk Capital Group BDC, Inc. modified a placement of stock, increasing the deal size to $5 million from $3 million. Its shares (OTCBB: BHCG) jumped 100% on Friday, or 9 cents, to close at $0.18.

Perth, Australia's Global Construction Services Ltd. priced a A$4.66 million sale of its ordinary shares, hoping to strengthen its balance sheet.

Idenix sells $17.01 million

Idenix granted exclusive rights to GlaxoSmithKline for the development and marketing of the company's IDX899, a novel non-nucleoside reverse transcriptase inhibitor, or NNRTI, which is in phase 2 clinical development for the treatment of HIV/AIDS.

Under the terms of the agreement, GlaxoSmithKline will assume all development responsibility and associated costs for IDX899 and Idenix will receive an upfront payment of $34 million. The company also will be eligible to receive up to $416 million in development, regulatory and sales milestones and, if IDX899 is successfully developed and commercialized, Idenix will receive double-digit, tiered worldwide royalties.

The $34 million upfront payment was split between cash and the purchase of $17.01 million in Idenix common stock.

The company will sell 2,475,728 common shares at $6.87 apiece to SmithKline Beecham.

"GlaxoSmithKline, with a well-established HIV franchise and substantial drug development experience, is the ideal collaborator to help maximize the potential of IDX899," Idenix's chief executive officer Jean-Pierre Sommadossi stated.

"For Idenix, the significant value created through the license of IDX899 enables us to focus all of our resources on advancing our core strategic HCV assets, which include drug candidates from the three major classes of direct-acting HCV antivirals."

"IDX899 may play a significant role in improving treatment options for people with HIV/AIDS," Zhi Hong, the senior vice president of GlaxoSmithKline's Infectious Diseases Center of Excellence for Drug Discovery, added.

A once-daily, lower-dose NNRTI that offers an improved drug resistance and pharmacokinetic profile would be valuable to HIV-treating physicians and patients. The preliminary clinical evidence of IDX899 supports this and warrants continued clinical study as part of GlaxoSmithKline's growing drug pipeline in HIV."

Idenix shares (Nasdaq: IDIX) fell 4.66%, or 30 cents, to close at $6.14 Friday. Idenix has a market capitalization of $347 million.

GlaxoSmithKline shares (London: GSK) dropped 1.49%, or 19p, closing at 1,258p.

Blackhawk lifts deal

Blackhawk increased a stock placement by $2 million and now plans to take in $5 million by selling 1 million shares at $5.00 apiece.

John W. Loofbourrow Associates, Inc. is the agent for the offering, which priced on Jan. 15.

Blackhawk is a New York-based business development company. Its market capitalization is $5.84 million.

Global Construction: A$4.66 million

Global Construction said it has raised A$2.76 million in a private placement of ordinary shares and intends to take in another A$1.9 million.

The company will sell 11.65 million shares. It already has sold 6.9 million shares at A$0.40 apiece in the first tranche and plans to sell an additional 4.75 million shares at the same price.

The company also said it has launched a share purchase plan for shareholders to invest at the same price.

Proceeds will be used to support continued growth and strengthen the company's balance sheet.

Managing director Enzo Gullotti said in a press release the company is very pleased with the investor response to the capital raising.

"We are delighted with the strong support received from investors that participated in the placement, particularly in light of the current difficulties in financial markets," Gullotti said. "We're also pleased to be able to allow our shareholders to be involved and participate in the future growth of the company through the share purchase plan."

The company provides construction services. Its shares (Australia: GCS) dropped 3.41%, or 1.5 cents, to close at A$0.425 Friday.

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