East West seals $500 million; MAP secures credit facility; Novelos closes $9 million financing

By Stephanie N. Rotondo

Portland, Ore., Nov. 12 – Pharmaceuticals were the clear dominator of Thursday’s private placement market, but it was East West Bancorp Inc. that had the day’s biggest financing.

The bank holding company announced that it had settled a $500 million placement of common and preferred shares. A company spokesperson said the funds would support the acquisition of United Commercial Bank, and could also be used to repay TARP funds.

Meanwhile, among the pharmaceuticals, MAP Pharmaceuticals Inc. said it had secured a $60 million line of credit. The two-year facility will help the company advance its migraine drug candidate.

Also, Novelos Therapeutics, Inc. wrapped the last tranche of its $9 million private placement of equity units. As with MAP, Novelos plans to use the funding to advance its cancer-treating drug line.

Synergy Pharmaceuticals Inc., yet another pharmaceutical company, finished its previously announced private placement of common stock, taking in $8.6 million.

In other sectors, Unigold Inc. brought a C$10 million private placement of units to market. The deal also includes an over-allotment option.

East West seals $500 million

East West Bancorp, the Pasadena, Calif.-based parent company of East West Bank, completed a $500 million private placement of equity, the company said in a regulatory filing.

The deal closed Nov. 6 and originally priced Nov. 5.

Under the terms of the deal, the company sold approximately 118.24 million common shares at $9.04 per share. East West also issued 335,047 shares of series C mandatorily convertible cumulative non-voting perpetual preferred stock at $1,000.00 each.

The preferreds are automatically convertible into common shares at an initial conversion price of $9.04 per share.

Thomas J. Tolda, who handles investor relations for the financial institution, said that the funding would be used, in part, to support its planned acquisition of United Commercial Bank.

“The capital that we raised is to support the acquisition of $7.7 billion in loans acquired from the FDIC in this assisted transaction,” he told Prospect News. The funds will also help the company support its own loan portfolio.

“It was important to demonstrate to regulators that we had overwhelmingly strong capital to support any unforeseen events in the future,” he said.

Tolda said the company might also use the proceeds for investment opportunities, as well as to repay TARP funds received in December 2008.

“Last but not least, it was extremely important to demonstrate to customers of the acquired institution that their deposits were safe,” Tolda added. “Our capital ratios are among the very best in the industry.”

“We’re thrilled with the way this has gone,” he remarked. “The market has taken it in a positive way and the various communities we serve have also taken it positively.

“We’re now seeing deposit concerns that UCB had relax,” he concluded.

East West’s stock (Nasdaq: EWBC) fell 8 cents, or 0.59%, to $13.88. Market capitalization is $1.23 billion.

MAP secures credit facility

MAP Pharmaceuticals secured a $60 million line of credit from Azimuth Opportunity Ltd., according to a regulatory filing.

The deal was inked Nov. 11.

Azimuth will purchase MAP common shares over the course of two years. The price per share will equal the daily volume-weighted average price of the shares during a 10-day drawdown period, less a 3.625% to 5.75% discount.

The company can make draws in up to 36 tranches.

Proceeds will be used to advance the company’s migraine product candidate, Levadex.

“MAP has been able to maintain a strong financial position despite the current market environment, with $79 million in cash and accounts receivables as of the end of the third quarter of 2009,” stated Timothy S. Nelson, president and chief executive officer, in a press release announcing the new credit facility.

“Putting this long-term equity line of credit in place now provides us with the option and flexibility to draw down additional capital when and if we deem it prudent as we continue moving our migraine product candidate Levadex toward an NDA submission and potential commercial launch.”

About the product, nelson said, “Levadex met all four primary endpoints in a previous Phase 3 trial. We look forward to initiating our confirmatory Phase 3 trial for Levadex in the first quarter of 2010 with the goal of submitting an NDA soon after the completion of that trial.”

MAP’s equity (Nasdaq: MAPP) gained 3 cents, or 0.34%, to $8.85. Market capitalization is $218 million.

MAP Pharmaceuticals is a Mountain View, Calif.-based developer of therapies and inhalation delivery systems for the treatment of respiratory and systemic diseases.

Novelos completes $9 million financing

Novelos Therapeutics settled the final tranche of its $9 million private placement of units, the company announced.

Purdue Pharma LP, an existing shareholder, was the investor. The deal originally priced Aug. 26.

Novelos issued a total of 13.63 million common shares and warrants equal to an additional 4.77 million shares. The warrants are exercisable at $0.66 per share until Dec. 31, 2015.

In the initial tranche – which closed Aug. 26 – Purdue received approximately 5.30 million common shares and warrants for 1.85 million additional shares. Approximately 8.33 million shares and warrants for 2.91 million more shares were issued in the final closing.

“I am very pleased with Purdue’s continued support, providing Novelos funds for a robust development program into 3Q 2010,” said Harry Palmin, president and CEO, in a statement. “We continue to expect our pivotal 900-patient Phase 3 lung cancer trial to conclude in early 2010. The trial was fully enrolled in March 2008, with the primary endpoint of increased median overall survival to be evaluated following the occurrence of 725 deaths.”

Novelos’ stock (OTCBB: NVLT) declined by 4 cents, or 5.19%, to $0.73. Market capitalization is $36.81 million.

Novelos Therapeutics is a Newton, Mass.-based biopharmaceutical company focused on cancer and hepatitis treatments.

Synergy wraps equity placement

New York-based Synergy Pharmaceuticals took in $8.6 million from a private placement of common stock.

The company sold the shares at $0.70 per share.

Proceeds from the financing will be used for a phase 2a clinical trial of Synergy’s SP-304 drug candidate. The trials are expected to being in the first quarter of 2010.

“This financing combined with the earlier financing we announced last summer of $7.09 million considerably strengthens our balance sheet, reflecting the strong continued interest in our drug candidate SP-304 to treat GI disorders,” said Gabriele Cerrone, chairman, in a press release.

“We believe that the market for GI disorders is growing rapidly and there are very few treatment options available in this market. We are now on track to meet a critical milestone, namely the completion of the Phase 2a proof-of-concept clinical trial of SP-304 in patients with chronic constipation.”

Synergy’s equity (OTCBB: SGYP) improved by 20 cents, or 4.44%, to $4.70. Market capitalization is $352.18 million.

Unigold to issue units

Away from the pharmaceutical arena, Unigold, a Toronto-based gold exploration company, said it orchestrated a C$10 million private placement of equity units.

The deal includes a C$1.5 million greenshoe.

The company intends to sell approximately 58.82 million of the units at C$0.17 on a best-efforts basis. Each unit will contain one common share and one half-share warrant. Whole warrants are exercisable at C$0.30 for two years.

Proceeds will be used for exploration and general corporate purposes.

Unigold’s shares (TSX venture: UGD) slipped C$0.065, or 26.00%, to C$0.185. Market capitalization is C$20.6 million.

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