XOMA plans $12 million direct offering; Proximagen raises £50 million; Alphatec to sell shares

By Stephanie N. Rotondo

Portland, Ore., June 5 - The medical sector was widely represented in Friday's private placement market, with several deals coming from that arena.

XOMA Ltd. announced a $12 million registered direct offering of shares. The company settled a similar deal in mid-May.

Among other pharmaceuticals, Proximagen Neuroscience plc said it took in £50 million through a stock sale. The company said the financing was one of the largest biotechnology fundraisings in the United Kingdom in the last 10 years.

Elsewhere, Alphatec Spine Inc. is planning a $10 million equity placement. Proceeds are for working capital purposes.

Away from medical-related issuers, Carbon Energy Ltd. said it was planning a A$32 million stock transaction. The company said the two-tranche deal was oversubscribed.

XOMA plans direct offering

Pharmaceuticals company XOMA announced a $12 million registered direct offering of stock.

The company said it entered into a definitive agreement with "certain institutional investors" to sell approximately 10.43 million units at $1.15 per unit, according to a press release. Each unit holds one common share and one half-share warrant. The whole warrants are exercisable at $1.30 - a 110% premium over the equity's closing price as of June 4 - and are good for a total of approximately 5.22 million additional shares. The warrants expire prior to the 51/2-year anniversary of the closing date.

Proceeds will be used to continue development of XOMA 052.

"Engineered as a broad anti-inflammatory agent, XOMA 052 has potential as a treatment for many diseases, including diabetes, rheumatoid arthritis, acute gout, systemic juvenile idiopathic arthritis and perhaps for the treatment of cardiovascular disease," according to XOMA's web site. "This multi-indication potential makes it the most versatile and exciting product in our pipeline."

Settlement is expected by June 10.

The placement is in addition to the $10 million raised in May. The company also sold units in that deal.

XOMA's shares (Nasdaq: XOMA) fell 11 cents, or 9.32%, to $1.07.

XOMA is based in Berkeley, Calif.

Proximagen raises £50 million

Proximagen Neuroscience said it raised £50 million via a private placement of shares.

Under the terms of the deal, the company sold approximately 35.71 million ordinary shares at 140p per share. Investors included new and existing shareholders, including licensing partner Upsher-Smith Laboratories Inc., according to a press release.

The company also said that the placement was "one of the largest biotech fundraisings in the U.K. in the past 10 years."

Proximagen plans to use the funds to obtain and in-license drug programs and to bring those programs to commercialization over the next two to three years. The new cash brings the company's total cash balance to around £57 million.

"We are very pleased with the support from our current and new investors for the fundraising," said Kenneth Mulvany, chief executive of Proximagen, in the statement. "We intend to use the proceeds of this fundraising to build on our competency in diseases of the central nervous system by acquiring, developing and commercializing innovative drug candidate programs in clinical stages of development. There is an opportunity to consolidate a select group of high quality assets into one strong biopharma company capable of developing drug candidates to commercialization. I am pleased that so many blue-chip investors have backed our proposed business strategy and recognize this opportunity.

"The fundraising and business strategy will transform Proximagen into one of the U.K.'s best capitalized biopharmaceutical companies," he continued. "By adopting a flexible investment strategy and working in alliance with companies via a number of different approaches, we intend to build a strong pipeline of assets, some of which we hope will be launched on the market in the near future. Proximagen looks forward to becoming a dominant CNS player in what is currently a highly fragmented sector. Most importantly, we look forward to leveraging our expertise and building a sustainable business which will return value to our shareholders."

Proximagen's stock (London: PRX) gained 1.25p, or 0.88%, to 143.75p.

Proximagen Neuroscience is a London-based drug discovery and development company focused on the development of novel therapeutics for diseases of the central nervous system.

Alphatec to sell shares

Alphatec Spine, a subsidiary of Alphatec Holdings Inc., announced a $10 million private placement of stock.

The Carlsbad, Calif.-based company will sell common shares to one of its existing stakeholders, HealthpointCapital Partners II LP, at $2.54 per share. Closing is expected by June 22.

Proceeds will be used for working capital purposes.

"The proceeds from this private placement strengthen our overall financial position and enables us to focus on execution," said Dirk Kuyper, president and CEO, in a news release. "We evaluated a number of alternatives and are pleased that HealthpointCapital's ongoing support and confidence in the business has enabled up to complete this financing, providing Alphatec Spine with the highest amount of net cash proceeds with the least dilution to our shareholders as compared to other financing alternatives available in the current capital market environment."

Alphatec's stock (Nasdaq: ATEC) increased 7 cents, or 2.55%, to $2.62.

Alphatec Spine is a medical device company that designs, develops and manufactures products for the treatment of spinal disorders.

Carbon Energy secures A$32 million

West Perth, Australia-based Carbon Energy will take in A$32 million in an oversubscribed private placement of stock, the company said.

The company issued 74.4 million common shares at A$0.43 per share. The deal will come in two tranches, with 50 million shares settling in the first round and the remainder in the second. The first tranche is expected to settle in mid-June.

Incitec Pivot Ltd. will purchase 10% of the second tranche offering, according to a press release. The buy-in will help Incitec maintain its 10% stake in Carbon Energy.

"The funds raised will be applied to the further development of the existing Underground Coal Gasification project at Bloodwood Creek near Dalby in Queensland and the wider commercial advancement of the company's UCG technology," the company said in the release. "This funding is proposed to support installation of a 5MW power generation unit and associated facilities with operations to commence in late 2009. This is intended to be followed by front end engineering and design for the development of a 20 MW of power generation facility and associated field development in late 2010."

Carbon Energy's equity (Australia: CNX) closed at A$0.50

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