IsoRay raises $5.16 million from PIPE; FairWest sells C$3.7 million

By Sheri Kasprzak

New York, Aug. 18 - IsoRay, Inc. rounded out the week in private placements, closing an offering of stock, for $5,158,000.

Meanwhile, in the broader market, stocks continued to climb even as PIPE volume tapered off to end the week.

"There's really nothing I can point at [holding back volume]," said one sellside market source when asked about volume Friday. "Stocks look good, things are really picking up. I think volume is actually good, at least compared to the way it had been a few weeks ago."

Looking at specific offerings, IsoRay sold 2,063,200 shares at $2.50 each to investors led by MicroCapital, LLC. The price per share is 26% discount to the company's $3.39 closing stock price Thursday.

IsoRay had 14,722,686 outstanding common shares as of May 17.

The investors also received warrants for 2,232,700 shares, exercisable at $3.00 each.

If all of the warrants are exercised, the proceeds raised would be enough to allow the company to be self-funding, IsoRay said.

"MicroCapital's financing of IsoRay represents a rare opportunity to invest in a company that has an approved and differentiated therapeutic product that we believe has a good chance of successful adoption," said Ian Ellis of MicroCapital, in a news release.

"In addition to the value associated with reducing the side effects of brachytherapy in the treatment of prostate cancer, the company's isotope may have the characteristics that would allow it to be used in circumstances where there appears to be few, if any, alternative treatment.

"We also believe that the quality of the industry-experienced team that the company has successfully attracted is an indication of the possibility of success in this market."

"Brachytherapy has proven to be effective, but the introduction of Cesium-131 takes this treatment option to a new level," said IsoRay chief executive officer Roger Girard in a statement.

The stock ended the day up 11 cents, or 3.24%, to close at $3.50 (OTCBB: ISRY).

"They're not a bad company by any means," said one buyside source. "I think they have a decent plan, but I think they way undersold themselves. I fully expect to see them at $5 [per share] by the end of the year."

Even so, the company incurred a net loss of $1,659,869 for the quarter ended March 31, compared to a net loss of $724,314 for the corresponding 2005 quarter, according to the latest available earnings statement.

Headquartered in Richland, Wash., IsoRay develops Cesium-131 brachytherapy used to treat prostate cancer.

FairWest plans PIPE

Moving to Canadian private placement offerings, FairWest Energy Corp. negotiated a C$3.7 million private placement Friday.

The offering includes up to 4 million flow-through shares at C$0.65 each and up to 2 million non-flow-through shares at C$0.55 each.

The deal is scheduled to close Sept. 30.

After the deal was announced Friday afternoon, FairWest's stock slipped by 2 cents, or 3.64%, to close at C$0.53 (Toronto: FEC).

Calgary, Alta.-based FairWest is an oil and natural gas exploration, development and production company.

The offering comes as oil prices made a comeback Friday, gaining $1.08 to close at $71.14 per barrel.

In other oil news, Blackstone Ventures Inc.'s stock slipped on Friday after the company priced a private placement for up to C$10 million on Thursday.

The stock edged down a penny to close at C$0.65 (TSX Venture: BLV). On Thursday, when the deal was announced, the stock closed unchanged at C$0.66.

In the placement, Blackstone plans to sell units at C$0.65 each for at least C$7.5 million and up to C$10 million.

A syndicate of placement agents led by Toll Cross Securities Inc. will place the units.

Proceeds will be used for exploration on the company's Scandinavian nickel projects. The rest will be used for working capital.

Based in Vancouver, B.C., Blackstone is a mineral exploration company.

Biopure's stock falls

Elsewhere in secondary market action, Biopure Corp. watched its stock slip on Friday after announcing the imminent completion of a $5,378,785 private placement.

The company's stock fell 6 cents, or 6.74%, to settle at $0.83 (Nasdaq: BPUR).

The offering - and the release of the company's third-quarter earnings statement - sent the company's stock down by a penny to end at $0.89 (Nasdaq: BPUR) on Thursday.

The company plans to sell units at $0.71 each to a group of institutional investors.

Dawson James Securities Inc. is the placement agent.

Biopure also released its third-quarter earnings report on Thursday.

Total revenues for the third quarter were $396,000, compared to $483,000 for the corresponding 2005 quarter.

The company reported a net loss of $6.6 million for the quarter, compared with a net loss of $6.4 million for the same quarter of 2005.

Biopure, headquartered in Cambridge, Mass., develops therapeutics to increase transport of oxygen to the body's tissues.

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