Memory Pharma PIPE to help complete trials; Access Integrated raises $22 million from notes

By Sheri Kasprzak

New York, Oct. 6 - A week in PIPEs packed with biotechnology offerings closed on a down note as stocks dipped Friday.

Despite the slightly lower stocks, one sellside market source said he didn't feel that was impacting volume Friday at all.

"It's such a small dip overall," he said. "There's really nothing in particular that I can see that is stopping [volume]."

To close out the week, the Dow Jones Industrial Average, which had reached record levels earlier in the week, gave up 16.48 to close at 11,850.21. The Nasdaq composite index fell 6.35 to end at 2,299.99, and the Standard & Poor's 500 composite index dipped by 3.64 to settle at 1,349.58.

Meanwhile, oil prices continued to slip, this time losing 27 cents to close at $59.76 per barrel.

The week in PIPEs was packed with both biotech and technology offerings. Among the larger offerings this week was a $31.5 million stock deal from Acorda Therapeutics, Inc., a $31.302 million stock offering from Memory Pharmaceuticals Corp. and a $27.28 million direct offering from Dynavax Technologies Corp.

Memory stock edges up

A day after announcing a $31,302,000 private placement, Memory Pharmaceuticals saw its stock nudge up slightly.

The stock gained a penny to close at $1.20 (Nasdaq: MEMY). The company's stock gained 5 cents after the offering was announced Thursday to close at $1.19.

On Friday, volume of Memory shares traded skyrocketed with 1,617,152 shares traded compared with the average 105,012 shares.

According to one buysider based in New York, the Memory offering was dilutive, but the deal may be a good thing for the company anyway.

"So I know this dilutes the stock, but on the other hand it gives them the money needed to last well into the end of 2007, which means they can complete all relevant trials and keep their heads above water, etc.," he said. "It seems to be a straightforward deal. I view this as a good thing, and we knew they needed the money.

"The price increased 50% after the private placement was announced. So I guess it's not always a horrible thing. Especially, like I said, if investors stayed away from Memory because they didn't have enough cash, which they now do, so now it's back into the speculative game."

As previously reported, Memory plans to sell 28.2 million shares at $1.11 each to a group of investors led by Great Point Partners and MPM Capital. The price per share is a 2.6% discount to the company's $1.14 closing stock price on Wednesday.

The placement is set to close in at least two tranches with the first - for $26.7 million - set to settle on Oct. 16. The closing of the second tranche is subject to shareholder approval.

Proceeds will be used for clinical, preclinical and exploratory research programs. The rest will be used for working capital and general corporate purposes.

Based in Montvale, N.J., Memory develops treatments for Alzheimer's disease, schizophrenia, depression and bipolar disorder.

Acorda stock climbs again

Elsewhere in secondary market action, Acorda Therapeutics' stock jumped by 9.8% on Friday after the company settled its previously announced $31.5 million stock deal.

The stock gained $1.33 Friday to close at $14.90 and gained another 10 cents in after-hours trading activity (Nasdaq: ACOR). The stock climbed 29.24%, or $3.07, Thursday to close at $13.57. On Wednesday, when the deal was announced, the stock fell $1.00, or 8.7%, to close at $10.50.

As previously announced, Acorda sold 3,230,769 shares at $9.75 each. The price per share represents a 15.2% discount to the company's $11.50 closing stock price on Tuesday.

Located in Hawthorne, N.Y., Acorda is a biopharmaceutical company focused on treatments for multiple sclerosis, spinal cord injuries and nervous system disorders.

Access IT's $22 million deal

Looking to other offerings, Access Integrated Technologies, Inc. settled a private placement of senior unsecured notes for $22 million with existing institutional investors.

The 8.5% notes are due in one year and bear interest at 2.125 shares per $1,000 in principal of the notes, payable quarterly. Interest may be paid in cash or shares of class A stock at the company's option.

Roth Capital Partners, LLC was the placement agent.

Proceeds will be used for the expansion of the company's digital cinema rollout to markets outside the United States. The rest will be used to retire debt related to previous acquisitions and to provide additional working capital.

"This transaction provides the company with several important benefits, foremost among which is providing working capital to support our rapidly advancing international initiatives and the flexibility to prepay notes and obligations relating to previous acquisitions which come due over the course of the next year without burdening funds already allocated for our accelerating Christie/AIX deployment plan," said Bud May, the company's chief executive officer, in a statement.

"We are confident that our continuing progress and our expected improved financial performance over the next 18 months will provide us with the opportunity to refinance this loan under more favorable terms, which could include an asset-back securitization transaction."

Based in Morristown, N.J., Access Integrated Technologies develops software used by the motion-picture industry.

Star Energy plans PIPE

Moving to the energy sector, in spite of dropping oil prices, Star Energy, Inc. announced it plans to raise up to $5 million and at least $1 million as part of the company's stock purchase agreement with Volga-Neft Ltd. Co.

The placement includes up to 5 million and at least 1 million units of one share and one warrant. Each of the warrants is exercisable at $2.00 each for three years.

The deal is being conducted as part of a share agreement with Volga-Neft. Star purchased 100% of the outstanding shares of Volga-Neft from its shareholders for 10 million shares of Star.

On Friday, the stock gained 4 cents, or 3.54%, to end at $1.17 (OTCBB: SERG).

Volume of the stock traded Friday took off with 176,100 shares traded compared to the average 47,850 shares.

Located in Salt Lake City, Star is an oil and natural gas exploration and development company.

Ronda Fears contributed to this story.

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