December 2016 Deal Round-Up

The following is a summary of major deals in the life science space that closed or were announced in December 2016. 

December 2016 continued to see activity among cannabis stocks, but one of the most notable transactions was the launch of BlueRock Therapeutics by Bayer AG and Versant Ventures, Inc. with a combined Series A funding round of US $225 million. 

MERGERS & ACQUISITIONS

Date: Announced December 1, 2016

Acquirer: Canopy Growth Corporation (TSX: CGC)

Target: Mettrum Health Corp. (TSXV: MT)

Deal size: Approx. CDN $430 million

Description: On December 1, 2016 Canopy Growth Corporation (“Canopy Growth”) and Mettrum Health Corp. (“Mettrum”) announced that they entered into a definitive arrangement agreement (the “Arrangement Agreement”) under which Canopy Growth will acquire all of the issued and outstanding shares of Mettrum. The total transaction is valued at approximately CDN $430 million and will be satisfied by the issuance of common shares in Canopy Growth. Under the terms of the Arrangement Agreement, Mettrum shareholders will be entitled to receive 0.7132 common shares of Canopy Growth for each common share of Mettrum, representing consideration of CDN $8.42 per Mettrum common share based on the closing price of Canopy Growth common shares on the Toronto Stock Exchange on November 30, 2016.  

Source: Press Release, "Canopy Growth Enters into Agreement to Acquire Mettrum", December 1, 2016.

FINANCINGS

Date: December 9, 2016

Type: Bought deal private placement offering

Issuer: Immunovaccine Inc. (TSX: IMV)

Underwriter(s): A syndicate of underwriters led by Echelon Wealth Partners Inc., and including Mackie Research Capital corporation.

Deal size: Approx. $8 million

Description: On December 9, 2016, Immunovaccine Inc. ("Immunovaccine") announced that it had closed a bought deal private placement offering (the "Offering"), raising gross proceeds of $8,000,000.25. Under the terms of the Offering, a total of 10,666,667 common shares (the "Common Shares") were issued at a price of $0.75 per Common Share (the "Issue Price"). The Offering was completed through a syndicate of underwriters led by Echelon Wealth Partners Inc. and including Mackie Research Capital Corporation. As part of the Offering, the Company granted to the Underwriters an over-allotment option, which entitles the Underwriters to purchase, during the period ending January 9, 2017, up to an additional 1,600,000 Common Shares at the Issue Price, for additional gross proceeds of up to $1,200,000. Immunovaccine is a clinical-stage biopharmaceutical company that develops cancer immunotherapies and infectious disease vaccines.

Source: Press Release, "Immunovaccine Announces Closing of $8 Million Bought Deal Private Placement Financing", December 9, 2016.

Date: Announced December 12, 2016

Type: Series A financing

Issuer: BlueRock Therapeutics

Investor(s): Bayer AG and Versant Ventures, Inc.

Deal size: US $225 million

Description: On December 12, 2016, Bayer AG and Versant Ventures announced the launch of BlueRock Therapeutics, a regenerative medicine company focused on developing induced pluripotent stem cell therapies for a range of diseases. BlueRock Therapeutics was launched with a US $225 million Series A funding round, representing one of the largest ever Series A financings for a biotechnology company.  

Source: Press Release, "Bayer and Versant Ventures Join Forces to Launch Stem Cell Therapy Company BlueRock Therapeutics with USD 225 Million Series A Financing", December 12, 2016.

Date: December 13, 2016

Type: Bought deal private placement (the "Brokered Offering") and concurrent non-brokered private placement (together with the Brokered Offering, the "Offering")

Issuer: Supreme Pharmaceuticals Inc. (CSE: SL)

Underwriter(s): The syndicate for the Brokered Offering was led by Canaccord Genuity Corp. and included Dundee Securities Ltd., Beacon Securities Limited and Cormark Securities Inc.

Deal size: $55 million ($50 million bought deal private placement and $5 million non-brokered private placement)

Description: On December 13, 2016, Supreme Pharmaceuticals Inc. ("Supreme") announced the closing of a $50 million bought deal private placement (the "Brokered Offering") and concurrent $5 million non-brokered private placement (together with the Brokered Offering, the "Offering") for aggregate gross proceeds of $55 million. Under the Offering, Supreme issued a total of $55 million of 10% unsecured convertible debentures (the "Debentures") and 42,350,000 common share purchase warrants ("Warrants"). 

The Debentures bear interest from the date of closing at 10.0% per annum, payable semi-annually on June 30 and December 31 of each year and will mature on December 31, 2019. The Debentures are convertible at the option of the holder into common shares in the capital of Supreme ("Common Shares") at any time prior to the close of business on December 31, 2019 at a conversion price of $1.30 per Common Share (the "Conversion Price"), subject to Supreme's ability to force the conversion of all of the principal amount of the then outstanding Debentures at the Conversion Price in certain circumstances. Each Warrant is exercisable to acquire one Common Share of the Corporation at an exercise price of $1.70 per Common Share for a period of three years following December 13, 2016, subject to Supreme's right to accelerate expiry at any time after four months and one day after December 13, 2016 in certain circumstances.

Source: Supreme Pharmaceuticals Inc., Form 51-102F3 Material Change Report, December 22, 2016.

Date: December 13, 2016

Type: Private placement and asset purchase

Issuer: Neovasc Inc. (TSX: NVC) (NASDAQ: NVCN)

Investor(s)/Acquiror(s): Boston Scientific Corporation (NYSE: BSX)

Deal size: US $7,090,200 (private placement) and US $67,909,800 (asset purchase)

Description: On December 12, 2016, Neovasc Inc. ("Neovasc") completed its transaction with Boston Scientific Corporation (“Boston Scientific”) whereby Boston Scientific acquired Neovasc’s advanced biologic tissue capabilities and certain manufacturing assets for US$67,909,800. Concurrently, Neovasc completed a private placement whereby Boston Scientific purchased 11,817,000 common shares in the capital of Neovasc (the “Common Shares”) at a purchase price of US$0.60 per Common Share for gross proceeds of US$7,090,200. Neovasc is a specialty medical device company that develops, manufactures and markets certain products to address cardiovascular diseases such as mitral valve disease and refractory angina.

Source: Press Release, "Neovasc and Boston Scientific Close US $75 Million Agreement", December 13, 2016

Date: December 22, 2016

Type: Bought deal offering

Issuer: Canopy Growth Corporation (TSX: CGC)

Underwriter(s): A syndicate of underwriters led by GMP Securities L.P. and Dundee Capital Partners, and including Cormark Securities Inc., PI Financial Corp., and Canaccord Genuity Corp.

Deal size: $60,017,200

Description: On December 22, 2016, Canopy Growth Corporation ("Canopy Growth") announced that it had closed its previously announced short form prospectus offering on a bought deal basis. A total of 5,662,000 common shares in the capital of the company (the "Common Shares") were sold at a price of $10.60 per Common Share for aggregate gross proceeds of $60,017,000.  

Source: Press Release, "Canopy Growth Corproation completes previously announced bought deal financing for $60 million", December 22, 2016