Inhibitex leads PIPE news with $41.25 million issue; issuance slow in U.S. market

By Sheri Kasprzak

New York, Aug. 18 - With the stock market mixed Thursday, some sell-siders said PIPE issuance has trailed off in the United States and some issuers may be looking for structures within the market to help get funds even when their stocks are off.

In fact, a few equity lines of credit were wrapped up on Thursday, and that is a structure of particular interest to issuers with less-than-great stock performances, according to one market source.

"You will be seeing more and more of those," he said. "We're seeing some now. It just makes life easier for issuers in a crunch, who need the funds and really don't have much choice other than doing some structure like this."

Two companies in particular announced settlements of equity lines on Thursday.

Hyperdynamics Corp., a Houston-based oil and natural gas exploration company, sealed a $20 million three-year standby equity distribution agreement with Dutchess Private Equities Fund II, LP. The shares in that line will be sold at 95% of the lowest closing bid price for the five trading days after notice of a draw.

Dutchess also funded a $10 million equity line from Nexia Holdings, Inc., which will also sell shares at 95% of the lowest closing bid price for five trading days after notice of a draw.

Based in Salt Lake City, Nexia is a holding company for financial consulting and real estate investment concerns.

Hyperdynamics' stock slipped $0.06 to close at $1.00 on Thursday, and Nexia's stock gained $0.0003 to close at $0.0004.

In the broader market, stocks ended mixed Thursday. The Dow gained 4.22 to close at 10,554.93; the Nasdaq composite index lost 9.07 to end at 2,136.08, and the S&P 500 slipped 1.22 to close at 1,219.02.

"There've been a few things out there today," said another sellside source. There's "not really that much going on that's worth mentioning. [There were] a lot of smaller deals today, I noticed."

Inhibitex raises $41.25 million

Inhibitex, Inc. led private placement news Thursday with news of the pending settlement of a $41.25 million private placement.

The offering, which is scheduled to close Aug. 22, includes 5 million shares at $8.25 each sold to institutional investors.

Lazard Capital Markets LLC was the placement agent.

Proceeds from the offering will be used for the development of the company's Veronate product, to advance the company's Aurexis clinical program and to fund pre-clinical research programs. The remainder will be used for general corporate purposes.

Inhibitex's stock gained $0.24 to close at $9.04 but lost $0.08 in after-hours trading.

According to the company's latest earnings report, Inhibitex sustained a net loss of $10,069,993 for the quarter ended June 30, up from a net loss of $6,812,096 for the corresponding quarter in 2004.

As of Aug. 7, the company had 25,205,384 outstanding common shares.

Inhibitex is an Atlanta-based company focused on the development of antibody-based therapeutics to treat and prevent infectious diseases.

Nutra Pharma to raise $9.6 million

Elsewhere in the biopharmaceutical sector, Nutra Pharma Corp. announced that it will be receiving $9.6 million from a stock offering with SBI Brightline XII LLC.

Nutra Pharma will sell up to 24 million shares at $0.40 each to SBI.

The investor will receive warrants for up to 6 million shares, exercisable at $0.30 to $0.50 each.

Nutra Pharma has entered into a stock agreement with SBI Brightline XII LLC for $9.6 million.

The Boynton Beach, Fla.-based company will use the funds, in part, for clinical trials.

"We are excited to be working with SBI Brightline in ensuring that Nutra Pharma has the capital to move our business plan forward," said company chief executive officer Rik Deitsch in a statement. "This financing provides us with the capital to meet our near-term budgets and the financial leverage to allow us to become revenue-generating and fund the clinical trials of our biotech investments."

On Thursday, the company's stock gained $0.03 to end at $0.32.

The company reported operating losses of $446,237 for the quarter ended March 30, compared to a loss of $906,400 for the same period in 2004.

West 49 leads Canadians

Heading up private placement offerings in Canada was a $15 million new offering from apparel retailer West 49 Inc.

The deal includes 7,894,736 shares at C$1.90 each.

After the offering was announced Thursday morning, West 49's stock gained 15.91%, or C$0.28, to close at C$2.04.

Desjardins Securities Inc. is the placement agent.

The company may use some of the proceeds to make acquisitions. Among the targets of acquisition announced by West 49 are a Quebec-based clothing retailer and a small e-commerce business. The rest of the proceeds will be used for general corporate purposes.

West 49 is based in Burlington, Ont.

IMI prices C$10 million deal

Looking elsewhere in Canada, IMI International Medical Innovations Inc. priced a C$10 million unit offering Thursday evening.

The company hopes to sell 10,000 units at C$1,000 each.

The units are comprised of C$1,000 in principal of 7% convertible debentures and 157 warrants.

The debentures mature in four years and are convertible into common shares at US$2.85 each.

The warrants are exercisable at US$2.93 each for five years.

The offering is being placed through a syndicate of underwriters led by Orion Securities Inc. Toronto-based IMI develops diagnostic tests for cancer and other diseases. The proceeds will be used for working capital.

The company's stock gained US$0.04 to close at US$2.61 on Thursday.

Global Alumina stock rises

After announcing its second PIPE of the month, Global Alumina Corp.'s stock made gains on Thursday.

The company's stock edged up $0.06, or 3.82%, to close at $1.63.

On Wednesday, when the $100 million offering was announced, the company's stock remained unchanged at $1.57.

In its most recent offering, an attempt to secure funds to build an aluminum refinery, Global Alumina sold shares at $2.00 each and a $50 million convertible debenture to Emirates International Investment Co. LLC.

The debenture is convertible into common shares at $2.50 each.

Based in Toronto, Global Alumina is a bauxite exploration company focused on aluminum production. The company is also receiving $200 million from another stock offering.

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