Depomed seals $30 million equity line; HemoSense wraps $6.99 million stock sale

By Sheri Kasprzak

New York, Dec. 12 - Biotech companies again led private placement activity on Tuesday with Depomed, Inc.'s $30 million equity line of credit leading offerings.

Meanwhile, a sellsider said Tuesday that biotech offerings are likely to make up the majority of issuance for the rest of the year.

"We do seem to see a surge in [biotech] deals at the end of every year," he said. "A lot of them will probably be direct placements, but we're going to see a lot of private placements as well."

Another sellside source said earlier this week that biotech companies have a huge need for cash and some smaller companies with shaky stocks may have waited until the end of the year to conduct their deals in hopes that their stock would improve.

"You want to price when you feel you'll get the best deal," he said. "Sometimes that means waiting until the last minute."

Looking to the Depomed offering, Azimuth Opportunity Ltd. agreed to buy up to 8,399,654 shares in the deal over the next two years. The shares will be priced at discounts ranging from 3.775% to 6.375% to the volume weighted average price over 10 consecutive trading days.

The offering was announced Tuesday morning, and the company's stock gave up 5.45%, or 17 cents, on the day to close at $2.95 (Nasdaq: DEPO). In after-hours trading, the stock gained 5 cents.

Volume of Depomed shares traded Tuesday climbed to 1,396,939 shares, compared with the average 269,908 shares.

Reedland Capital Partners was the placement agent.

Depomed has conducted a registered direct placement of its stock before. In January 2005, the company sold 5.036 million shares at $4.50 each. The shares were sold through the company's shelf registration.

Based in Menlo Park, Calif., Depomed develops oral drug-delivery products.

HemoSense raises $7 million

In other biotech news, HemoSense, Inc. settled a $6,991,500 private placement of 1.77 million shares Tuesday.

New Enterprise Associates bought the shares at $3.95 each, a 3.4% discount to the company's $4.09 closing stock price on Monday.

"We believe that recent developments in our business and industry may provide new opportunities to grow our business and increase our market share for INRatio, our blood coagulation monitoring system," said Jim Merselis, the company's chief executive officer, in a statement. "Securing these additional funds provides us with flexibility to respond to opportunities on a timely basis. We are very pleased that a sophisticated health care industry investors such as NEA also recognizes the opportunity for HemoSense and is supporting our efforts."

The stock dipped by 2 cents Tuesday to close at $4.07 (Amex: HEM).

HemoSense completed another private placement for $10 million in proceeds. The company, in November, sold 1,481,481 units of one share and one half-share warrant at $6.75 each.

Based in San Jose, Calif., HemoSense develops handheld blood coagulation systems for monitoring patients using warfarin for blood clotting.

Langer stock drops 4.7%

Moving to secondary market action, Langer, Inc. watched its stock give up 4.68% a day after it settled a $28.883 million offering of subordinated convertible notes.

The stock fell 20 cents to end at $4.07 (Nasdaq: GAIT). On Monday, when the deal closed, the stock gained 13 cents, or 3.14%, to close at $4.27.

In the offering, Langer sold 5% notes that are convertible at $4.75 each, a 14.7% premium to the company's $4.14 closing stock price on Friday.

Wm. Smith Securities Inc. was the placement agent.

Deer Park, N.Y.-based Langer produces medical products for the orthopedic, orthotic and prosthetic markets.

In other secondary market news, Advancis Pharmaceutical Corp.'s stock dropped by 3.56% Tuesday after announcing the pending completion of an $18 million stock offering on Monday.

The company's stock slipped 13 cents to close at $3.52 (Nasdaq: AVNC). On Monday, the company's stock gained 30 cents, or 8.96%, to end at $3.65 but lost 5 cents in after-hours trading.

The investors agreed to buy shares at $3.00 each, a 10.4% discount to the company's $3.35 closing stock price Friday. The offering is set to close Thursday.

Pacific Growth Equities, LLC was the lead agent in the deal.

Proceeds will be used for the commercial launch of the company's Amoxicillin Pulsys, for the development of other products and for working capital.

Located in Germantown, Md., Advancis is a pharmaceutical company focused on developing anti-infective products.

Liquor Barn plans PIPE

Heading north of the border, Liquor Barn Income Fund priced a C$15.7 million offering of 8% unsecured subordinated convertible debentures.

The five-year debentures, each of which has a face value of C$1,000, are convertible into trust units at C$8.60 each. The conversion price is a 7.7% premium to the company's C$7.98 closing stock price on Monday.

TD Securities Inc. is the underwriter for the offering, which is scheduled to close Jan. 4.

Proceeds will be used for planned acquisitions in British Columbia, future acquisitions, the repayment of an existing credit facility and general corporate purposes.

The company's stock gained 12 cents, or 1.5%, to close at C$8.10 (Toronto: LBN).

Based in Edmonton, Alta., Liquor Barn Income Fund is an income fund that owns 60% interest in Liquor Barn LP, which operates 59 liquor stores in Alberta and seven in British Columbia.

Fortress to raise C$12 million

Looking to resources offerings, Fortress Minerals Corp. priced a C$12 million non-brokered private placement.

The company intends to sell up to 10 million shares in the deal.

The stock closed unchanged Tuesday at C$1.20 (TSX Venture: FST).

Proceeds will be used for ongoing exploration at the company's Svetloye gold project in Russia. The rest will be used for working capital.

Vancouver, B.C.-based Fortress is a precious and base metals exploration company.

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