Semitool to complete $29.55 million direct deal; Avanir details $20.1 million direct placement of stock

By Sheri Kasprzak

New York, Dec. 16 - Semitool, Inc. led private placement news Friday, closing out a week dominated by direct stock offerings.

Avanir Pharmaceuticals Inc. also announced the terms of a direct placement, one of several biopharmaceutical companies with offering in the market this week. On Thursday, BioCryst Pharmaceuticals, Inc. said it was gearing up to close a $30 million direct deal, and on Wednesday, Discovery Laboratories Inc. released the details of a $20.01 million direct offering.

Market sources said earlier this week that biopharmaceutical companies may be looking to direct placements for the quick cash needed to file necessary applications with the Food and Drug Administration before the end of the year.

On Friday, one sellsider said that this reasoning will likely push more biotech offerings in the coming week.

"I think this past week is a good indicator of a short-term trend of more biotech [deals]," he said. "There seems to be a pretty good market for them."

Moving back to the Semitool offering, the company will issue 3 million shares at $9.85 each under its shelf registration to a group of institutional investors.

As of Dec. 1, the company had 28,738,527 outstanding common shares.

The deal is slated to close on Dec. 21.

The offering was announced late Thursday. On Friday, the stock slipped 15 cents to close at $10.25, but gaining 2 cents in after-hours trading.

Needham & Co., LLC was the placement agent.

Along with the offering, company chief executive officer Raymon Thompson will sell 2 million of his shares at $9.85 each.

Proceeds from the direct placement will be used for general corporate purposes.

Larry Viano, the company's chief financial officer, did not immediately return calls for comment on the offering Friday.

Semitool recently reported a net income of $10.05 million for the quarter ended Sept. 30, up from a net income of $7,354,000 for the same quarter in 2004.

"Although we expect existing debt financing arrangements and cash flows generated from operating activities to be sufficient to fund operations at the current and project levels in the future, there is no assurance that our operating plan will be achieved," said the company's latest earnings report. "We may need to take actions to reduce costs, seek alternative financing arrangements or pursue additional placement of our common stock."

Based in Kalispell, Mont., Semitool develops chemical processing equipment used in the production of semiconductors.

Looking to the Avanir deal, the company received definitive agreements from institutional investors for 6 million class A shares at $3.35 each.

The company had 116,049,821 outstanding common shares as of Dec. 12.

The investors, which include Federated Kaufmann Fund and a Boston-based institutional money manager, will buy the shares on Dec. 21.

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

Leerink Swann & Co. was the placement agent.

For the year ended Sept. 30, Avanir reported a net loss of $30,606,564, compared with a net loss of $28,154,853 for the year ended Sept. 30, 2004.

San Diego-based Avanir is a biopharmaceutical company focused on treatments for chronic diseases.

The company's stock gained 8 cents, or 2.35%, to close at $3.49.

Aradyme's $3 million offering

In the tech sector, Aradyme Corp. sealed a $3 million financing with Eagle Rock Capital, LLC.

After the deal was announced Friday afternoon, the stock jumped 15.38%, or 6 cents, to close at $0.45.

Eagle Rock agreed to buy shares in several tranches, buying 5 million shares at $0.20 at closing. The investor received matching warrants exercisable at $0.50 each.

Over the next 15 months, another $2 million will be funded in a series of four payments, paying $0.20 for each share.

The final $2 million will include matching warrants to purchase stock at $0.75 each for the second million and $1.00 each for the third million.

Proceeds will be used for sales, marketing and product development, as well as debt reduction and general corporate purposes.

"We are extremely pleased to have secured this funding with Eagle Rock Capital," said James Spencer, the company's chief executive officer, in a statement. "This funding, which has been part of our strategic plans for some time now, represents the first of several strategic initiatives that we have put in place to continue to build on the success we have had this past year and take advantage of the many new and exciting opportunities that are on the horizon for the company.

"We evaluated several different funding offers and felt the opportunity with Eagle Rock Capital was by far the best for our shareholders. If all the funding schedules are met as outlined in the agreement, the net average cost per share of the stock and warrant exercise will be approximately $0.48 per share."

Merwin Rasmussen, principal with Eagle Rock, said in a statement that Aradyme was appealing to the investor because of its technologies and its management team.

"I was very impressed with management's willingness and ability to make the necessary changes that reaffirmed to me their commitment to the long-term success of the company," Rasmussen said. "As an early investor and director of the company, I've been tracking Aradyme's growth and progress since its early beginnings. I feel Aradyme is an excellent investment because of the company's management team, its unique database technologies and the potential multiple revenue opportunities its technology presents in both the short and long term."

Based in Orem, Utah, Aradyme is a data management company focused on data migration and conversion, integration and application development.

Cervus raises C$6.24 million

Heading north of the border, Cervus Financial Group Inc. wrapped a C$6.24 million convertible debenture deal.

The company's stock slipped 5 cents to close at C$0.08 on Friday after the deal was announced in the afternoon.

The 10% debentures mature on Nov. 30, 2008 and are convertible into common shares at C$0.90 each. The investors received warrants for 3,466,666 shares, exercisable at C$1.05 each for three years.

Based in Toronto, Cervus provides mortgages through mortgage brokers.

BioCryst stock ends up

After announcing a $30 million direct offering Thursday, BioCryst's stock edged up slightly on Friday.

The stock gained 14 cents, or 0.91%, to end at $15.45 after gaining 24 cents a day earlier.

In the placement, the company will issue stock at $13.46 per share to a group of institutional investors including Kleiner Perkins Caufield & Byers and Texas Pacific Group Ventures.

BioCryst, based in Birmingham, Ala., develops small-molecule pharmaceuticals to treat colon cancer, cardiovascular diseases and viral infections.

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