Oscient Pharmaceuticals gears up to wrap $34.74 million PIPE; Aastrom secures $25.51 million

By Sheri Kasprzak

New York, April 6 - Biopharmaceutical companies headed back to the PIPE market on Thursday with two major offerings leading action.

The largest deal was from Oscient Pharmaceuticals Corp.

The company is planning to close a $34.74 million stock deal with a group of institutional and accredited investors.

Oscient will sell 18 million shares at $1.93 each on April 11, along with warrants for 9 million shares exercisable at $2.22 each.

The price per share was a 1% discount to Oscient's $1.95 closing stock price on April 5. The warrant strike price represents a 13.8% premium to the same closing stock price.

The company's stock gave up 6 cents, or 3.08%, to end at $1.89, but gained another 10 cents in after-hours trading (Nasdaq: OSCI). On April 5, the company's stock gained 8 cents to close at $1.95.

"Ouch," remarked one Oscient player. "I suppose they had no choice. I do hope that this cash will now get them to the point where they generate their own cash."

The placement comes just two days after Oscient announced made two presentations on its lead product Factive at the European Congress of Clinical Microbiology and Infectious Diseases.

Factive is used to treat acute bacterial sinusitis.

Oscient is no newcomer to the PIPE market, having raised $9 million from the sale of 3.5% convertible notes on May 25, 2004. The notes were convertible into common shares at $6.64 each.

Waltham, Mass.-based Oscient is a biopharmaceutical company focused on antibiotic products.

Elsewhere in the biotech sector, Aastrom Biosciences, Inc. is planning to complete a $25.51 million direct offering of stock.

A group of institutions agreed to buy 15,943,750 shares at $1.60 each on April 11. The price per share is a 10.1% discount to the company's $1.78 closing stock price on April 5.

The shares will be sold under Aastrom's shelf registration.

The offering was announced Thursday afternoon and by 1:45 p.m. EDT, the company's stock had already given up 6.74%, or 12 cents. In fact, at the end of the day, the stock remained down 12 cents to end at $1.66 (Nasdaq: ASTM). In after-hours trading, the stock rebounded by 2 cents.

Merriman Curhan Ford & Co. is the bookrunner.

Proceeds from the deal will be used for clinical trials, research and development activities, manufacturing and working capital.

Based in Ann Arbor, Mich., Aastrom develops adult stem cell technologies used to repair or regenerate multiple human tissues.

Trinity Biotech's $23 million offering

In other biotech news, Trinity Biotech plc is getting ready to settle a $23,005,000 direct offering.

The company plans to sell to U.S.- and Europe-based institutional investors 2,675,000 American Depositary Shares at $8.60 each, a 4.5% discount to the company's $9.01 closing stock price April 5.

The deal is scheduled to close April 11.

Also, Ronan O'Caoimh, the company's chief executive officer, agreed to buy 223,460 ADS at $8.95 each.

The ADS will be sold under Trinity's shelf registration.

Roth Capital Partners, LLC is the bookrunner.

The stock gained 5.5%, or 50 cents, to end the day at $9.51 (Nasdaq: TRIB).

"We are delighted with the level of support we have received from an internationally diverse, institutional investor group," said O'Caoimh in a statement. "The proceeds of this offering together with our existing cash resources, operating cash flows and banking facilities will enable us to target larger acquisition opportunities that previously and to sustain our growth ambitions."

Trinity plans to use the proceeds for potential acquisitions and general corporate purposes.

Based in Dublin, Ireland, Trinity is a biotechnology company focused on developing point-of-care diagnostic products used to detect infectious diseases, sexually transmitted diseases, blood coagulation disorders and autoimmune diseases.

Ivanhoe prices $25.4 million PIPE

Moving to the energy sector, Ivanhoe Energy Inc. priced a $25,422,000 offering of special warrants.

The non-brokered deal consists of 11.4 million special warrants exchangeable for units of one share and one warrant once the company files a prospectus covering the underlying shares.

The special warrants were priced at $2.23 each, a 16.8% discount to the company's $2.68 closing stock price on April 5.

At the end of the day, Ivanhoe's stock dropped 2 cents, or 0.75%, to settle at $2.66 (Nasdaq: IVAN).

The warrants associated with the units upon exchange are exercisable at $2.63 each.

One institutional investor agreed to buy $12.7 million of the offering and another will buy 3.5 million special warrants. The company's deputy chairman, Robert Friedland, will buy 2.2 million special warrants.

Of the proceeds, $4 million will be used to retire long-term debt. The rest will be used for exploration expenses.

"Ivanhoe Energy is entering the final stages of commercializing its proprietary heavy oil upgrading technology," said Friedland in a news release. "Participation in this financing is an opportunity to demonstrate support for the commercialization program and my commitment to helping the company's management team execute their business plan."

Ivanhoe, based in Vancouver, B.C., is an oil and natural gas exploration and development company with operations in the U.S. and China.

In other energy news, Orleans Energy Ltd. negotiated a C$38,065,000 offering of subscription receipts.

The deal includes up to 5.6 million receipts at C$5.90 each and 670,000 flow-through shares at C$7.50 each.

The receipts will be exchanged on a one-for-one basis for common stock once Orleans settles its proposed acquisitions of two private oil and gas companies.

The deal is being placed through a syndicate of underwriters led by Peters & Co. Ltd. and including GMP Securities Ltd., Tristone Capital Inc., Dundee Securities Corp. and National Bank Financial Inc.

Proceeds from the receipts will be used for the acquisitions and proceeds from the flow-through shares will be used for exploration expenses on the company's Canadian properties.

The offering is scheduled to close April 28.

The acquisitions are expected to cost C$88.8 million including the assumption of C$15 million in debt.

The acquisitions are scheduled to close May 31.

After the offering and acquisition were announced Thursday morning, Orleans' stock gained 20 cents, or 3.25%, to close at C$6.35 (TSX Venture: OEX).

Calgary, Alta.-based Orleans Energy is an oil and natural gas exploration company.

Touchstone wraps $22 million deal

In other resources offering, Touchstone Resources USA, Inc. concluded a $22 million convertible notes deal.

The 7.5% senior convertible notes are due April 4, 2009 and are convertible at $1.06 each, a 5% premium to the company's $1.01 closing stock price on April 5.

The investors will receive series A warrants for 12,971,700 shares, exercisable at $1.06 each and series B warrants for 8,301,888 shares, exercisable at $1.38 each. Both sets of warrants expire in five years and the series B warrants are exercisable only if the company conducts a mandatory conversion of the notes.

First Albany Capital was the placement agent.

Proceeds from the deal will be used for drilling and leasehold acquisitions in the Fayetteville and Caney shales, as well as for the retirement of existing convertible notes.

"We are pleased to have investors who believe in the Touchstone vision and see the value we are trying to create through our current exploration activities," said Roger Abel, the company's CEO, in a statement. "Placements such as this one are an important part of our capital strategy as we continue to grow as a company."

The stock gained 5.94%, or 6 cents, to settle at $1.07 Thursday (OTCBB: TSNU).

Houston-based Touchstone is an oil and natural gas exploration and production company focused on properties in Arkansas, Oklahoma, Texas, Mississippi, Louisiana and New Zealand.

Mega Uranium prices C$17 million deal

Looking back to Canadian offerings, Mega Uranium priced a C$17 million unit deal.

The non-brokered PIPE includes up to 2 million units at C$8.50 each.

The units consist of one share and one half-share warrant with each whole warrant exercisable at C$12.00 for 18 months.

The price per unit is a 19.43% discount to the company's C$10.55 closing stock price on April 5 and the warrant strike price is a 13.7% premium to the same closing stock price.

Proceeds will be used for exploration on the company's properties and for general corporate purposes.

At the end of the day, Mega's stock fell 10.14%, or C$1.07, to wrap at C$9.48 (TSX Venture: MGA).

Based in Toronto, Mega is a uranium exploration company focused on properties in Australia, Argentina, Mongolia and Canada.

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