GeoVax, Osisko get financing facilities; Cell Genesys, Oilsands sell stock; pipeline growing, Rodman says

By Kenneth Lim

Boston, May 12 - GeoVax Labs, Inc. said it has entered into a $10 million stock financing agreement with an investment fund to develop its key product.

Meanwhile, Osisko Exploration Ltd. said it negotiated a C$20 million loan from the Quebec union-supported Solidarity Fund QFL.

Cell Genesys, Inc. said it is selling $30 million of stock and warrants to fund its late-stage cancer treatment, while Oilsands Quest Inc. announced a $54.5 million stock placement.

In the broader markets, Rodman & Renshaw Capital Group, Inc. is seeing signs of a "normalization" of the slow PIPE market, the investment bank's chief executive said.

GeoVax negotiates financing

GeoVax said it will sell $10 million worth of stock as part of a financing deal with Fusion Capital Fund II, LLC.

GeoVax said it will sell the common shares to Fusion over a 25-month period in amounts between $80,000 and $1 million. The purchase price will be based on the prevailing market prices without any fixed discount. GeoVax common stock (OTCBB: GOVX) closed at $0.235 on Monday, lower by 2.89%, or just under a penny.

Proceeds will be used to further the company's developmental HIV/AIDS vaccine, expected to enter Phase 2 human clinical trials later this year.

GeoVax is an Atlanta-based biotechnology company that develops human vaccines for HIV and other infectious diseases.

"We are very pleased to establish this funding relationship with Fusion Capital, a well-respected institutional investor with a strong track record of investments in the technology and healthcare sectors," GeoVax president and chief executive Robert T. McNally said in a statement.

"This agreement will help us continue to move forward with our AIDS vaccine development efforts. Combined with the five-year, $15 million federal grant GeoVax was awarded last year and the direct support we expect to receive through the HIV Vaccine Trials Network (HVTN) conducting our upcoming Phase 2 clinical trial, we believe we are well-positioned to achieve several important milestones in the development of our vaccine. This agreement also provides flexibility for us to choose the times at which we accept capital, and to consider other alternative financing sources should the opportunity arise."

Osisko takes on debt

Osisko Exploration said it is taking a C$20 million loan from Solidarity Fund.

The seven-year facility will bear interest at 9.5%, payable in shares or cash prior to the commercial production of Osisko's Canadian Malartic Project. After production at that project, the interest will be paid in cash.

The principal will be repaid in a minimum of 48 equal installments beginning on the earlier of commercial production of the Canadian Malartic Project or three years from closing.

Solidarity Fund also received 1.1 million warrants exercisable at C$7.46 for five years.

Osisko common stock (TSX: OSK) slipped 0.95%, or C$0.04, to close at C$4.17 on Monday.

Osisko is a Toronto-based resource exploration company.

Solidarity Fund is a development capital fund organized by the Quebec Federation of Labor aimed at maintaining and creating jobs in Quebec.

"We are extremely pleased with the fund's financial participation in the Canadian Malartic Project," Osisko president and chief executive Sean Roosen said in a statement. "Our gold project will have a significant impact on the Abitibi economy and it is anticipated that 400 jobs will be created over a period of at least 15 years."

Cell Genesys to raise $30 million

Cell Genesys said it plans to sell $30 million of stock and warrants in a direct placement.

The deal involves 7.1 million common shares at $4.22 each. Investors will also receive warrants for 8.5 million shares that are exercisable at $10.00 for seven years.

Cell Genesys common stock (Nasdaq: CEGE) rose 6.15%, or $0.24, to close at $4.14 on Monday.

Credit Suisse Securities (USA) LLC is the lead agent of the deal.

Cell Genesys, a South San Francisco-based cancer treatment developer, said proceeds will be used to fund development of the company's product candidates, including its portion of the Phase 3 costs for GVAX immunotherapy for prostate cancer, as well as for general corporate purposes.

Oilsands to sell $54.5 million of stock

Oilsands Quest is selling $54.5 million of treasury shares in a private placement.

The company will sell almost 13 million treasury shares at $4.20 per share. Of those shares, 11.9 million will be sold to funds managed by Sprott Asset Management Inc. for $50 million. Oilsands Quest common stock (AMEX: BQI) closed at $4.31 on Monday, higher by 5.12%, or $0.21.

Oilsands, a Calgary, Alta.-based oil and gas exploration company, said proceeds will be used for general corporate and other operational purposes.

Rodman sees normalizing signs

The PIPE market has been slowing down but is beginning to show early signs of recovery, Rodman & Renshaw chief executive Michael Lacovara said.

"We see that the total level of activity is down year over year, and it always takes some time in the PIPEs market for expectation to adjust as valuations come down," Lacovara told Prospect News.

Rodman & Renshaw on Monday announced that it is expanding its presence in the oil and gas sector with the acquisition of Cosco Capital Management LLC for $10.1 million.

"Our PIPEs pipeline is growing again, and we're feeling that the normalization of the market could be coming," Lacovara said.

Lacovara declined to comment on how the PIPE market might compare against last year's because of regulatory concerns but said the current market remains a wild card.

"I think the capital markets are generally in a place right now where nobody is going to make such a long-term prediction at this time," he said.

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