CytRx to sell equity; Prolor retires credit line with placement funds; Cyclacel plans offering

By Stephanie N. Rotondo

Portland, Ore., July 24 - The pharmaceutical sector produced most of Friday's deals - many of which were registered direct offerings - and it was CytRx Corp. that brought one of the day's largest transactions.

CytRx said it would take in approximately $20 million from a stock sale. Funds from the financing, which also includes warrants, will be used to advance the company's product lines.

Also, Prolor Biotech Inc. announced a $10 million sale of convertible preferred shares. Proceeds will be used in part to retire an existing $10 million line of credit.

Among other biopharmaceuticals, Cyclacel Pharmaceuticals Inc. arranged a direct offering of up to $5.9 million. The company will sell equity and two series of warrants.

Elsewhere in the private placement market, MacroSolve Inc. said it sold some convertible notes in the first closing of its $2.2 million deal. The company said that the transaction resulted in new shareholders.

African Energy Resources Ltd. will conduct a A$4 million equity placement, according to a press release. Proceeds raised in the two-tranche financing will go toward exploration.

CytRx to sell $20 million in equity

CytRx, a Los Angeles-based developer of human therapeutics, said it would raise $20.04 million from a registered direct offering of equity.

The company will issue 15.3 million common shares at $1.31 per share. Investors will also receive warrants good for another 3.8 million shares. Each warrant is exercisable at $1.70.

"These are exciting times at CytRx," commented Steven A. Kriegsman, president and chief executive officer, in a press release. "With the completion of this financing, we are positioned to aggressively pursue our goals of moving tamibarotene and INNO-206 toward commercialization, while evaluating additional opportunities that fit our oncology focus. Our ability to raise funds in a difficult market environment is a testament to the confidence investors have in our strategic focus and the capabilities of our management team and board of directors."

CytRx's equity (Nasdaq: CYTR) fell 9 cents, or 6.98%, to $1.20. Market capitalization is $115 million.

Prolor to sell convertible preferreds

Prolor Biotech said it plans to issue $10 million of 10% cumulative convertible preferred stock.

The preferreds will sell at $2.00 per share and are convertible into two shares of common stock.

The Nes Ziona, Israel-based biopharmaceutical company said it had already sold $2 million worth of the shares to the Frost Group LLC and two insiders. The deal has an option for another $8 million to be sold at any time before March 25, 2013. The total financing replaces Prolor's existing credit agreement with the Frost Group.

"After working closely with the Prolor team as chairman over the past two years, I am very pleased to be expanding my investment in the company at this exciting time in its development, together with other members of the Frost Group," said Phillip Frost of the Frost Group, in a press release. Frost is also Prolor's chairman. "I look forward to continuing to work with the board and management to help build Prolor into a significant player in the therapeutic proteins market."

"This new infusion of equity capital comes at a critical time for Prolor, as we are approaching significant milestones in the development of our long-acting human growth hormone candidate that has the potential to significantly decrease the frequency of administration of this important injectable drug," said Shai Novik, president of Prolor. "We believe that the $2 million in preferred stock financing from members of the Frost Group, along with the option to obtain up to an additional $8 million at our sole discretion, is a positive development for the company. It provides immediate capital to advance our development programs into clinical trials, while also enabling us to eliminate our existing $10 million line of credit, which required monthly interest payments and the inclusion of the debt as a liability on our balance sheet."

Prolor's shares (OTCBB: PBTH) gained 14 cents, or 7.78%, to $1.94.

Cyclacel announces direct offering

Also in the medical realm, Cyclacel Pharmaceuticals announced a $3.4 million registered direct offering of equity units.

Under the terms of the deal, the company will issue 4 million common shares. Series 1 warrants are also included for an additional 2.5 million shares - and additional proceed of $2.5 million - as well as series 2 warrants for 735,522 additional shares.

Each unit will hold one of the common shares, a five-year series 2 warrant good for 0.18 shares and the series 1 warrants, which expire seven months from issuance. Both series of warrants are exercisable at $1.00 and each unit will be sold at $0.85.

"The proceeds of the financing together with our current cash, cash equivalents and marketable securities should provide the financial resources to continue clinical development of sapacitabine, the company's lead drug, including a pivotal trial in patients with hematological malignancies," said Spiro Rombotis, president and chief executive, in a statement.

Settlement is expected by July 29.

Cyclacel's stock (Nasdaq: CYCC) improved 9 cents, or 8.83%, to $1.11. Market capitalization is $20.5 million.

Cyclacel Pharmaceuticals is a Berkley Heights, N.J.-based developer of treatments for cancer and other diseases.

Among other direct offerings in the biopharmaceutical arena, Antares Pharma Inc. will conduct an $8.5 million registered direct offering of units, according to a regulatory filing and subsequent press release.

In the filing, the company said it would sell approximately 10.62 million units holding one common share and one five-year warrant for 0.40 shares. The units will sell at $0.80 per unit and each whole warrant is exercisable at $1.00.

Proceeds will be used for general corporate purposes. Settlement is expected by July 29.

Antares' equity (Amex: AIS) declined 3 pennies, or 3.33%, to $0.87. Market capitalization is $57.3 million.

Antares Pharma is a Ewing, N.J.-based developer of drug delivery systems.

MacroSolve to issue converts

MacroSolve, a Tulsa, Okla.-based provider of mobile date and video business solutions, will take in $2.2 million by way of a private placement of convertible notes.

The discounted 8% secured debentures come due July 31, 2014 and are convertible into common stock. As of Friday, the company had already placed $850,000 of the converts. The remaining portion will be sold on a monthly schedule from September to November 2009 and from February to September 2010.

"In this very challenging funding environment, the fact that we have raised up to $2.2 million from local high-net-worth individuals is a testament to the belief these investors have in MacroSolve's business model, the market opportunity we are pursuing and our ability to execute on that opportunity," stated Clint Parr, president and CEO, in a press release. "We are pleased to see private investment in our company both from our current investors as well as a group of new investors who are excited about MacroSolve."

Proceeds from the transaction will fund growth initiatives and general operating expenses.

MacroSolve's stock (OTCBB: MCVE) dipped 3 cents, or 13.04%, to $0.20. Market capitalization is $6.21 million.

African Energy plans stock sale

African Energy Resources is planning an A$4 million private placement of equity, the company announced.

The company will issue 80 million ordinary shares at A40.05 per share. The first tranche of approximately 24.17 million shares is expected to settle by July 31 for total proceeds of A$1.2 million. The second phase of approximately 55.82 million shares is expected to be issued upon shareholder approval.

"Funds will be used to advance exploration on several high priority uranium targets located within Zambia and Botswana," the company said in a news release. "The placement received strong interest from potential participants with firm commitments having now been received for the entire $4 million."

African Energy's equity (Australia: AFR) ended at A$0.089.

African Energy Resources is a West Perth, Western Australia-based exploration company.

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