Cell Therapeutics secures $17.6 million from placement; Genelabs to close $10 million stock offering

By Sheri Kasprzak

New York, Feb. 8 - U.S. PIPE issuance remained light Thursday, although activity was led by three sizable biopharmaceutical offerings. Meanwhile, stocks were pushed down by climbing oil prices and lackluster retail sales reports.

Oil prices continued to push natural resources offerings in Canada.

One sellside market source said Thursday that oil prices remain the bane of the U.S. PIPE market's existence.

"Stocks are getting knocked down," he said. "When we can finally catch a break, volume will pick up but until then I don't really know what to tell you. We're at the mercy of the stock market."

On Thursday, oil prices gained $2.00 to end the session at $59.71 per barrel.

The Dow Jones Industrial Average sank by 29.24 to close at 12,637.63; the Nasdaq composite index dipped 1.83 to end at 2,488.67; and the Standard & Poor's 500 composite index edged down 1.71 at 1,448.31.

Heading up the biopharmaceutical offerings was a $17.6 million direct offering of convertible preferred stock from Cell Therapeutics, Inc.

The company plans to sell 3% preferreds to a group of institutional investors. The preferreds are convertible at $1.6725 each. The investors will receive warrants for 5,273,617 shares, exercisable at $1.61 each.

The offering is expected to close Feb. 13.

The underlying shares are being sold under the company's shelf registration.

Rodman & Renshaw, LLC is the placement agent.

The company's stock climbed 2 cents on Thursday to settle at $1.63 (Nasdaq: CTIC), and volume was lower than usual with 195,678 shares traded compared with the average 876,479 shares.

Cell Therapeutics is no stranger to the market. Back in September, the company sold $40 million in stock in another registered direct offering. The deal included 23,121,387 shares at $1.73 each. After that deal was announced, the company's stock fell 15.87%, or 33 cents, to end at $1.75.

Seattle-based Cell Therapeutics develops treatments for cancer.

Genelabs to raise $10 million

Elsewhere in the sector, Genelabs Technologies, Inc. plans to settle a $10 million private placement of 5,813,953 shares.

The shares, which will be sold on Tuesday, are priced at $1.72 each, including $0.125 for underlying warrants. The investors will receive warrants for 1.7 million shares, exercisable at $1.85 each.

News of the deal sent the company's stock up 7 cents to close at $1.75 (Nasdaq: GNLB). Volume was also up with 138,659 shares traded compared with the average 69,295 shares.

Based in Redwood City, Calif., Genelabs develops treatments for diseases like lupus, hepatitis C and hepatitis E.

Another biopharmaceutical company, Immtech Pharmaceuticals, Inc., released news on Thursday that it plans to close an $8.1 million direct placement.

A group of institutional investors agreed to buy 1.2 million shares at $6.75 in the deal. The shares were sold under the company's shelf registration.

Ferris, Baker Watts, Inc. was the placement agent.

That offering is also set to close Feb. 13.

Proceeds will be used for research and development, commercialization and general corporate purposes.

The stock gave up 78 cents, or 9.65%, to end the day at $7.47 (Amex: IMM).

New York-based Immtech develops treatments for infectious diseases.

Gentium stock drops

In other biotech news, Gentium SpA watched its stock fall on Thursday, a day after the company announced a $47,480,180 private placement of American Depositary Shares.

The stock closed down 38 cents to settle at $20.58 (Nasdaq: GENT). On Wednesday, the stock gained 21 cents, or 1.01%, to close at $20.96.

A group of U.S.- and Italy-based institutional investors agreed to buy the ADSs at $20.17, a 2.7% discount to the company's $20.75 closing stock price Tuesday.

ThinkEquity Partners LLC is the placement agent.

Proceeds will be used for the development of the company's product candidates, for the repurchase of marketing rights to Defibrotide to treat veno-occlusive disease and myeloma from Crinos SpA and for general corporate purposes.

Based in Villa Guardia, Italy, Gentium is a biopharmaceutical company focused on treatments for cancer and vascular diseases.

Osisko greenshoe exercised

Moving north of the border, private placement regular Osisko Exploration Ltd. closed an C$80.5 million private placement of stock.

In the deal, the company sold 7 million shares at C$11.50 each, including a greenshoe for 900,000 shares exercised by a syndicate of underwriters led by Westwind Partners Inc.

The company's stock gave up 15 cents Thursday to close at $12.00 (TSX Venture: OSK).

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

"This financing and the fact that the underwriter option was fully exercised is tangible confirmation from institutional investors of the high quality of our flagship project," said Sean Roosen, Osisko's president, in a statement. "The Canadian Malartic gold project has developed into one of the most important new gold projects in North America.

"Osisko is in excellent position to transition from explorer to mine developer, with no debt, no partners and a premium North American asset that is 100% owned. This financing will allow the company to focus on expanding and upgrading the resource of the Canadian Malartic deposit and move through to feasibility and pre-development. The upcoming exploration and development programs combined with the current gold bull market should provide a very exciting and rewarding year to our shareholders."

Osisko has conducted many private placement offerings with the most recent, for C$5.5 million, priced on Oct. 20. In that deal, the company sold 1 million units of one share and one warrant at C$5.50 each. In May 2006, the company sold 4.925 million units of one share and one half-share warrant for C$16 million.

Osisko, based in Montreal, is a gold exploration company.

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