Pharmacopeia stock climbs on $24.8 million stock sale; flow-through offerings strong in Canada

By Sheri Kasprzak

New York, Oct. 13 - Winding down the week in the private placement market Friday was a $24,824,000 offering from Pharmacopeia Drug Discovery, Inc.

The company's stock advanced on word of the news, released Friday morning. By the end of the day, the stock had gained 17 cents, or 3.97%, to settle at $4.45 (Nasdaq: PCOP).

Volume of Pharmacopeia's shares traded Friday took off with 453,404 shares traded compared with the average 28,622 shares.

In the offering, a group of institutional investors have agreed to buy 5.8 million shares at $4.28 each. The price per share is par with the company's closing stock price Thursday.

The company had 15,301,676 outstanding common shares as of July 31.

The investors will receive warrants for 1.45 million shares, exercisable at $5.14 each.

Brian Posner, the company's chief financial officer, declined to comment on the deal Friday because the deal has not yet closed.

"The offering was very cheap but I don't understand why management did not wait until more deals were done," said one sellside trader. "They talked about one to two more deals in their third-quarter conference call by year-end. They must be having problems getting the up-front cash that they want. This is good though because now they will be protecting their interest. I don't see the stock trading down at all on this news."

CIBC World Markets was the lead underwriter for the offering, which is scheduled to close Wednesday.

Proceeds will be used for general corporate purposes and working capital.

According to the company's latest earnings statement, Pharmacopeia reported a net loss of $7.18 million for the quarter ended June 30, compared with a net loss of $4.71 million for the corresponding quarter of 2005.

Located in Princeton, N.J., Pharmacopeia develops novel therapeutics to treat rheumatoid arthritis, among other diseases.

Biophan stock dips

In other biotech news, Biophan Technologies, Inc. watched its stock drop by 7.14% a day after concluding a $7.25 million offering of senior secured convertible notes.

The stock slipped by 5 cents on Friday to end at $0.65 (OTCBB: BIPH).

Volume of the shares traded remained elevated with 1,001,667 shares traded. The average number of shares traded is 271,068 shares. A total of 1,611,400 shares were traded Thursday.

As previously reported, a group of institutional investors bought the notes, which are convertible into common shares at $0.67 each, a 9.4% discount to the company's $0.74 closing stock price on Wednesday.

C. E. Unterberg, Towbin was placement agent.

Biophan, a Rochester, N.Y., medical device company, will use the proceeds to continue to bring to market the Myotech Myo-Vad product as well as to continue the development and marketing of its MRI-safe and image-compatible technologies for pacemakers, implantable defibrillators, neurostimulators and other devices.

Flow-through offerings

In Canadian market news, flow-through offerings dominated the deals announced Friday, with oil explorers making up the majority of the deals. One sellsider said he feels it has more to do with the structure than with oil prices.

"Seriously, oil is sinking, energy stocks in general are sinking; why on earth would anyone price in these conditions, unless there was something worthwhile to the investors?" he said. "Investors love the flow-through shares. We see an increase in these [flow-through] deals near the end of the year every year."

Even so, oil prices did rebound on Friday, gaining 71 cents to end at $58.57.

Among the energy-related offerings announced Friday was a C$4.2 million offering from Grand Banks Energy Corp.

In that deal, the company plans to sell up to 2 million flow-through shares at C$2.10 apiece.

Proceeds will be used for Canadian exploration expenses.

On Friday, the stock fell by 5 cents, or 2.91%, to close at C$1.67 (TSX Venture: GBE).

Grand Banks is based in Calgary, Alta.

In other offerings, Halo Resources Ltd. settled a C$1,537,350 offering of 3,416,333 flow-through units at C$0.45 each.

The units include one share and one half-share warrant. Each full warrant is exercisable at C$0.60 through April 12, 2008.

Canaccord Capital Corp. was the placement agent.

Proceeds will be used for exploration on the company's Duport, Sherridon and RedLake properties.

Vancouver, B.C.-based Halo is a mineral exploration company.

The company's stock edged up by a penny on Friday to close at C$0.32 (TSX Venture: HLO).

TXP raises $1.5 million

In the tech sector Friday, TXP Corp. concluded a $1,504,000 private placement, sending its stock up 6.25%.

The company sold to Kuekenhof Equity Fund, LP 4.7 million shares at $0.32 each, a 33% discount to the company's $0.48 closing price Thursday.

The investor received warrants for 2.3 million shares, exercisable at $0.50 each for five years and warrants for 2.3 million shares, exercisable at $1.00 each for five years.

Proceeds from the offering were used to redeem a $550,000 and a $577,000 secured convertible debenture held by Cornell Capital Partners, LP. The 10% debentures were first issued to Cornell in June 2005 and June 2006, respectively.

"We welcome Kuekenhof as a major shareholder, given its successful track record of providing strategic counsel and value to its investments," said Michael Shores, the company's chief executive officer, in a statement. "This transaction enhances our capital structure, improves our financial flexibility and should minimize potential dilution to shareholders by replacing the 10% convertible debentures with common shares.

"We believe this strong endorsement from Kuekenhof reflects the continued progress of our business and our ongoing financial improvement."

Shores went onto say that the company's plans to acquire optical network terminal business from Siemens AG are progressing well.

Based in Richardson, Texas, TXP provides pre-manufacturing services for the electronics industry.

Ronda Fears contributed to this story.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.