Matritech pockets $4.36 million from convertibles deal; Railpower to raise C$30 million in unit offering

By Sheri Kasprzak

New York, Jan. 23 - Matritech Inc. led PIPE news Tuesday as one of several biotech firms in the news this week.

The company settled a $4.36 million offering of series B convertible promissory notes.

The 15% notes are convertible at $0.63 each, a 10% discount to the company's $0.70 closing stock price on Monday.

The stock closed unchanged Tuesday (Amex: MZT).

The investors in the offering included SDS Capital Group SPC Ltd., H&Q Life Sciences Investors and ProMed funds. Those investors came away with warrants for 4,157,143 shares exercisable at $0.63 each.

Proceeds will be used for research and development, sales and marketing and working capital and general corporate purposes.

"The new financing affords Matritech the opportunity to continue the momentum we have developed in the sales of our NMP22 BladderChek Test," said Stephen Chubb, the company's chief executive officer, in a news release.

"Equally important, this funding demonstrates the commitment of our investors to the long-term success of the company. We look forward to sharing our outlook for 2007 when we report our full-year 2006 results on Feb. 6."

Matritech has tapped the PIPE market before.

In January 2006, the company issued $7 million in secured convertible promissory notes to SDS and H&Q, among others.

Those 15% notes are convertible at $0.61 each, on par with the company's Jan. 12, 2006 closing stock price.

In March 2005, Matritech sold $12.55 million in series A convertible preferred stock. The company issued 1,426,124 shares of the preferreds at $8.80 each with each preferred convertible into 10 common shares.

Headquartered in Newton, Mass., Matritech develops protein-based diagnostic products to diagnose cancer.

Two other biotech deals

The Matritech offering follows up news of two other biotech offerings earlier this week.

Bionovo, Inc. on Monday closed a $15,781,500 stock deal, selling 10.521 shares at $1.50 each.

Bionovo's stock edged up 1.13%, or 3 cents, Tuesday to close at $2.68 (OTCBB: BNVI).

The company's stock gave up 17.19%, or 55 cents, to close at $2.65 Monday. Volume of Bionovo shares traded Monday took off with 869,846 shares traded compared with the average 109,561 shares.

Headquartered in Emeryville, Calif., Bionovo develops novel pharmaceutical products for cancer and women's health issues.

Also on Monday, Avalon Pharmaceuticals, Inc. announced a $10.02 million private placement of stock, which settled Tuesday.

The company sold 3 million shares at $3.34 each, an 8.4% premium to the company' $3.08 closing stock price on Friday.

Avalon's stock jumped 7.88% on Tuesday, or 27.28 cents, to end at $3.7328 (Nasdaq: AVRX). When the deal was announced Monday, the stock gained 38 cents to end at $3.46.

Based in Germantown, Md., Avalon is a biopharmaceutical company focused on treatments for cancer.

Railpower plans deal

Railpower Technologies Corp.'s stock jumped more than 21% on Tuesday after the company announced a C$25 million private placement, then increased it to C$30 million.

The stock gained 24 cents to close out the day at C$1.38 (Toronto: P).

Volume also took off with 6,881,583 shares traded compared to the average 1,126,140 shares.

A market source based in Vancouver, B.C. said Railpower has benefited from the U.S. Environmental Protection Agency's certification of its three-engine road switcher back in December.

"It was a definite feather in their cap," he said. "Their stock has really taken off since. The [PIPE] is a good thing for them, but I think it has more to do with the EPA decision than anything else."

The company plans to sell 30 million units of one share and one half-share warrant. Each full warrant is exercisable at C$1.25 for three years.

The deal is being placed through a syndicate of underwriters led by Canaccord Adams Ltd. and Sprott Securities Inc. The syndicate has an over-allotment option for up to 15% of the size of the deal.

Proceeds will be used for general corporate purposes.

Montreal-based Railpower develops hybrid energy technology systems used in railroads.

Amcia prices C$23.5 million PIPE

Elsewhere in Canadian offerings, Amica Mature Lifestyles Inc. negotiated the terms of a C$23.5 million private placement.

The offering includes up to 2.5 million shares at C$9.40 each.

Canaccord Capital Corp. is the lead underwriter for the offering, which is set to close Feb. 14.

The syndicate has a greenshoe for up to 250,000 shares.

Proceeds will be used for development projects with the company's joint-venture partners and for general corporate purposes.

The stock climbed 20 cents to end at C$9.80 (Toronto: ACC).

Vancouver, B.C.-based Amica develops and designs housing and services for senior citizens.

Bayswater to raise C$20 million

Looking to the resources sector, Bayswater Uranium Corp. priced a C$20,017,500 private placement.

The company plans to sell up to 3.45 million units at C$1.45 each and up to 9.1 million flow-through units at C$1.65 each.

The non flow-through units consist of one share and one half-share warrant.

The flow-through units include one share and one half-share warrant.

Both warrants are exercisable at C$1.85 each for 18 months.

Placement agent Pacific International Securities Inc. has a greenshoe for up to 862,500 non flow-through units and 2.275 million flow-through units.

Proceeds will be used for exploration on the company's uranium project, including the Central Mineral Belt in Labrador, the Athabasca Basin in Saskatchewan, the Thelon Basin in the Northwest Territories and Nunavut and the Hermitage Belt in Newfoundland. The rest will be used for exploration in Niger and for working capital.

The stock gave up a penny Tuesday to settle at C$1.53 (TSX Venture: BAY).

Based in Vancouver, Bayswater is a uranium exploration company.

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