Neovasc (NSDQ:NVCN) said last week that it’s looking to raise more than $65 million in a stock offering and a private placement as it seeks to come up with a $42 million shortfall stemming from its trade secret spat with Edwards Lifesciences (NYSE:EW) subsidiary CardiAQ Valve.
A jury in May 2016 awarded $70 million to CardiAQ after finding that Neovasc misappropriated trade secrets in developing its Tiara transcatheter mitral valve replacement device (Edwards inherited the lawsuit when it acquired CardiAQ Valve for $400 million in August 2014). A federal judge in Massachusetts added $21 million in enhanced damages to the decision in November 2016.
Vancouver-based Neovasc said Nov. 3 that the U.S. Court of Appeals for the Federal Circuit, which in September upheld the district court ruling, also denied it and its rival’s bids for rehearings.
Neovasc had set aside $70 million in escrow but lacks the cash to cover the remaining $42 million, which comes due today. The company said Nov. 9 that it would float more than 6.6 million Series A shares and nearly 19.1 million Series B shares at a combined price of $1.46 per unit, for gross proceeds of roughly $37.5 million. Separately, a private placement of senior secured convertible notes is slated to bring in another $27.8 million in net proceeds, Neovasc said.
The infusion will be used to fully fund the $42 million it lacks for the CardiAQ Valve judgment and partially to back its Tiara TMVR program and its Tiara-II clinical trial, plus general corporate purposes, Neovasc said.
Canaccord Genuity is the sole book-runner for the offering and the sole placement agent for the private placement, the company said.
NVCN shares were off -8.1% to 96.51¢ today in mid-morning trading.