GTx to close $60.8 million direct stock sale; EntreMed to close $17.16 million direct placement

By Sheri Kasprzak

New York, Dec. 13 - Biotech offerings continued to dominate PIPE issuance Wednesday even as stocks made meager gains.

The issuers seem to be looking more and more to direct placements for funding.

"We always see more [direct placements] at the end of the year," said one sellside market source. "We see them more from biotech companies anyway, but they seem to do more at the end of the year."

The sellsider said he feels some of the smaller biotech firms do direct placements at the end of the year to negotiate better terms. Also, their stock prices are likely to improve if they complete certain milestones or projects over the course of the year.

Looking to specific offerings, GTx, Inc. plans to close a $60,793,600 registered direct offering at a 4.7% discount to Tuesday's $16.79 closing stock price.

A group of institutional investors agreed to buy 3,799,600 shares at $16.00 each. As of Nov. 1, the company had 31,011,385 outstanding common shares.

The shares will be sold under the company's shelf registration.

Lazard Capital Markets LLC was the bookrunner.

Proceeds will be used for clinical development, for research and development and for working capital.

The offering, announced late Wednesday, sent the company's stock down 13 cents, or 0.77%, to close $16.66 (Nasdaq: GTXI). The stock had lost another 11 cents in after-hours trading.

GTx has tapped the direct placement market before, selling 6.325 million shares at $7.80 each for proceeds of $49.335 million in October 2005.

Looking to the company's latest earnings statement, GTx sustained a net loss of $10.89 million for the quarter ended Sept. 30, compared with a net loss of $9.94 million for corresponding quarter of 2005.

Based in Memphis, GTx is a biopharmaceutical company focused on treatments for cancer and men's health problems.

EntreMed to close direct deal

In other biotech news, EntreMed, Inc. secured $17.164 million from a direct placement of its registered stock.

The company's stock slid by 8.65%, or 16 cents, on Wednesday to close at $1.69 (Nasdaq: ENMD).

A group of institutional investors has agreed to buy 10,727,500 shares at $1.60 each, a 13.5% discount to the company's $1.85 closing stock price on Tuesday.

The shares will be sold under the company's shelf registration.

The offering is scheduled to close Dec. 18.

Proceeds will be used for research and development, clinical trials and related costs.

ThinkEquity Partners LLC was the bookrunner.

Rockville, Md.-based EntreMed develops therapeutic treatments for cancer and inflammatory diseases.

In another direct offering, Biomira Inc. announced its plans to raise up to $13,000,027 in an offering of units.

This biotech company's stock also dipped on word of the offering, losing 20%, or 31 cents, to settle at $1.24 (Nasdaq: BIOM). Volume of Biomira shares traded Wednesday took off with 6,943,339 shares traded compared with the average 420,191 shares.

The company plans to sell 9,629,650 units at $1.35 each. The units are comprised of one share and one warrant for two-tenths of a share.

The whole warrants are exercisable at $1.86 each for four years.

The underlying shares will be offered under the company's shelf registration.

Rodman & Renshaw, LLC is the placement agent.

Edmonton, Alta.-based Biomira develops therapeutic products to treat cancer.

Trimedyne closes offering

In other biotech news, Trimedyne, Inc. completed a $3.25 million private placement of 2.6 million shares.

The company sold the shares at $1.25 each, a 10.7% discount to the company's $1.40 closing stock price Tuesday, to Crescent International Ltd., Leviticus Partners LP Corsair Capital Management and Lewis Asset Management.

J.H. Darbie & Co, Inc. was the placement agent.

Proceeds will be used for production of the company's Side Firing Laser Fiber to treat benign prostatic hyperplasia.

"We are excited to have successfully concluded this offering," said Marvin Loeb, chairman of Trimedyne, in a news release. "The net proceeds of slightly more than $3 million will allow us to finance the increase in sales anticipated from the introduction of our new Side Firing Laser Fiber to the market by Boston Scientific Corp. in the United States and Japan and by Lumenis, Ltd. throughout the rest of the world. We are also pleased the offering was completed at a very small discount from the market price of our common stock."

On Wednesday, the company's stock gained 4 cents, or 2.86%, to end at $1.44 (OTCBB: TMED).

Trimedyne develops Holmium lasers and fiber optic laser devices used in surgical procedures. The company is based in Lake Forest, Calif.

Hythiam to raise $26.28 million

Moving to other PIPE offerings, Hythiam, Inc. secured $26.28 million from a private placement of its stock.

The offering, announced early Wednesday, sent the company's stock up 11.31%, or 95 cents, to close at $9.35 (Nasdaq: HYTM).

Institutional investors agreed to buy on Dec. 18 3.6 million shares at $7.30 each, a 10% discount to the company's volume weighted average stock price over the past 15 trading days.

UBS Securities LLC and William Blair & Co. were the placement agents.

Proceeds will be used for infrastructure, sales and marketing, and strategic partnerships, as well as other general corporate purposes.

Los Angeles-based Hythiam develops and commercializes treatments for drug and alcohol dependency for rehabilitation centers.

Allied Defense negotiates offering

Elsewhere, Allied Defense Group, Inc. priced a $6.684 million stock offering.

Pirate Capital LLC, Wynnefield Capital Management LLC, LBI Group Inc. and Halcyon Offshore Management intend to purchase 400,000 shares at $16.71 each.

Proceeds will be used for capital expenditures and working capital.

The stock lost 62 cents, or 3.71%, to end the session at $16.14 (Amex: ADG).

Based in Vienna, Va., Allied Defense develops ammunition and produces electronic and microwave security systems.

Another ammunition manufacturer, Security Devices International, Inc., on Wednesday closed a private placement of stock for $2.525 million.

The company sold 2.525 million shares in the deal to a group of private investors.

Proceeds will be used to develop the company's Lektrox Wireless Bullet and to establish future production facilities.

On Wednesday, Security Devices' stock gained 2 cents, or 1.03%, to close at $1.97 (OTCBB: SDEV).

Toronto-based Security Devices develops non-lethal ammunition used to incapacitate targets without causing serious injury or death.

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