MarkWest secures $135.22 million from unit sale; Advancis to close $24 million offering

By Sheri Kasprzak

New York, April 9 - As the market cranked back up after the Easter weekend, MarkWest Energy Partners, LP plans to close a $135.218 million private placement.

Elsewhere, PIPEs was packed with biotech offerings, led by a $24,003,881 deal from Advancis Pharmaceutical Corp.

More similar offerings could be pouring in this week, added one market source familiar with the sector.

"It's pretty strong right now, investors seem interested and stocks are holding steady in the sector despite some other drops in the [broad] market," he said. "It's [biotech] always been a big issuer [for PIPEs]."

Moving back to that exceptionally large MarkWest deal, the company plans to sell 4.1 million limited partnership units at $32.98 each to a group of institutional investors.

The units are being sold at a 5% discount to the company's $34.75 closing stock price on April 5.

The offering helped send the company's stock up to 35 cents to close at $34.40 (Amex: MWE) on Monday.

Investors in the deal include GPS Partners, LLC; Kayne Anderson Capital Advisors, LP; Swank Capital, LLC; Tortoise Capital Advisors, LLC; and Zimmer Lucas Partners, LLC.

Denver-based MarkWest operates midstream natural gas pipelines.

Advancis leads biotechs

Returning to the biotech offerings announced Monday, Advancis said it secured agreements from investors for a $24,003,881 offering of 10.155 million units.

The units, comprised of one share and one three-quarters share warrant, are priced at $2.36375 each.

The whole warrants allow for the purchase of another share at $2.27 each for five years.

Pacific Growth Equities, LLC was the placement agent.

Proceeds will be used for the development of the company's Amoxicillin Pulsys product and for working capital and general corporate purposes.

"Coupled with our already announced cost reduction initiatives, we believe the proceeds from this financing will provide sufficient capital to fund our operations through the first quarter of 2008, barring any unforeseen developments," said Edward Rudnic, the company's chief executive officer, in a statement.

"We are very pleased to have received the support from our existing investors and several new investors in this financing and believe that this transaction provides necessary capital to fund our business operations and also allows us to explore other strategic alternatives."

Advancis's stock gained 10.13%, or 23 cents, to settle at $2.50 Monday.

Headquartered in Germantown, Md., Advancis is a pharmaceutical company focused on developing antibiotics and other therapies.

Another large biotech offering - for $25 million - was announced Monday by Alteon Inc. Though the terms of that deal have not been released, the company plans to sell series B convertible preferred stock and warrants for 25% of the preferreds issued.

Closing of the deal is contingent upon stockholder approval and will be done at up to a 50% discount from the market price of the company's stock.

Rodman & Renshaw, LLC was the placement agent.

Proceeds will be used for ongoing clinical and pre-clinical programs and for operations.

The company's stock closed unchanged Monday at $0.09 (Amex: ALT).

Located in Montvale, N.J., Alteon develops small-molecule drugs used to treat and prevent the inflammatory aspects of cardiovascular disease and diabetes.

Lpath closes first tranche

Elsewhere in the sector, Lpath, Inc. wrapped the initial tranche of a $16.8 million stock deal for $13.9 million.

The company so far has issued 14,631,579 shares at $0.95 each.

The investors received class A warrants for 5,121,052 shares, exercisable at $1.05 each for five years.

Lehman Brothers and William Harris Investors were the lead investors for the funding round with Roaring Fork Capital SBIC, LP and Peierls Foundation, Inc. as the other investors.

Proceeds will be used to take the company's lead compound, Sphingomab, into clinical trials. The rest will be used for the company's other therapeutic programs.

"This funding represents an important milestone for Lpath and is a clear affirmation of the value of our accomplishments and potential," said CEO Scott Pancoast in a statement.

"We are enthusiastic about Lpath's innovative antibody technology and are excited to participate in this financing," said Charles Polsky, portfolio manager for William Harris Investors, in a news release.

Connected to the deal, Jeffrey Ferrell, senior vice president of Lehman Brothers, was appointed to Lpath's board of directors.

On Monday, the company's stock gained 8 cents to end at $1.30 (OTCBB: LPTN).

Lpath develops therapeutic treatments for human diseases. The company is headquartered in San Diego.

Benda's $7.41 million deal

In another biotech deal, Benda Pharmaceuticals, Inc. pocketed $7.41 million from the sale of shares.

The placement sent the company's stock up early with it gaining 40 cents, or 25.81%, by 11 a.m. ET. The stock settled up 10 cents, or 6.45%, to close at $1.65 (OTCBB: BPMA).

The offering was conducted as part of the company's acquisition of the majority of the shares of Shenzhen SiBiono Gene Technology Co. Ltd.

The company sold 247 units at $30,000 each to Ever Leader Holdings, Inc., the same investor that bought $12 million in stock in a November 2006 transaction.

The units include $30,000 in principal of convertible notes and warrants for 54,087 shares, exercisable at $0.555 each.

The 4% notes are due March 28, 2009 and are convertible at $0.555 each.

"I believe these capital infusions, combined with the recent validation of our reexamined U.S. patent, will allow us to more effectively focus our efforts on educating the healthcare community on the benefits of computer-assisted sponge counting and, ultimately, grow our revenues," said William Horne, the company's CEO in a statement.

Based in Hubei Province, China, Benda develops pharmaceuticals and traditional Chinese medicines.

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