French biotech company Abivax has completed an oversubscribed €49.2 million ($49 million) financing round.
This included U.S. and European biotech specialist investors, led by TCGX, with participation from Venrock Healthcare Capital Partners, Deep Track Capital, Sofinnova Partners, Invus, and Truffle Capital through the completion of two transactions. The first was a reserved capital increase of approximately €46.2 million ($46 million) through the issuance of 5,530,000 newly-issued shares with a nominal value of €0.01 per share, representing 33% of its current share capital, at a subscription price of €8.36 per share ($8.33).
The second was through the issuance of royalty certificates for an amount of €2.9 million ($2.9 million).
Ulcerative colitis program
Hartmut J. Ehrlich, CEO of Abivax said: “We are excited to announce the successful completion of Abivax’s oversubscribed capital increase, along with the issuance of royalty certificates that jointly amount to €49.2 million. With these new financial resources, we will pursue the company’s strategic priority to conduct and timely complete our late-stage global clinical phase 3 program of obefazimod for the treatment of ulcerative colitis (UC).
“Following the compelling results of the previous obefazimod maintenance studies in UC, we are confident to confirm its excellent safety and efficacy profile in the upcoming phase 3 induction and maintenance studies. There is still a very high need for novel therapeutic management options that offer a constant and long-lasting improvement of the quality of life of patients suffering from chronic inflammatory diseases. Abivax is highly committed to fully exploit the anti-inflammatory potential of our lead compound obefazimod across different indications, starting with moderate to severe ulcerative colitis.”
Didier Blondel, CFO of Abivax, added: “We are pleased that Abivax could attract new top-tier US biotech investors, TCGX, Venrock and Deep Track Capital, as well as our existing US and European biotech investors, for the capital increase and royalty certificates. The commitment of these investors, especially considering the currently very challenging financing environment, is an important confirmation of the potential of obefazimod in ulcerative colitis and the entire chronic inflammatory disease field.
“Based on our current assumptions, our cash runway has been extended until end of Q1 2023. We will make targeted use of these financial resources, mainly for the conduct and completion of our phase 3 clinical program in order to provide obefazimod as a long-lasting and effective treatment to patients in need and to maximize shareholder value. We are committed to completing this funding in due course through additional non-dilutive and dilutive financial resources in order to secure the full financing of our UC phase 3 program.”
How will Abivax use the funds?
Abivax plans to use the funds to launch and continue the clinical programs of obefazimod (ABX464), the company’s lead product in advanced development.
For ulcerative colitis, this means the continuation of the phase 2a and phase 2b maintenance studies and continuation of the global pivotal phase 3 program, which was initiated in the first half of 2022. The phase 3 program will combine two induction studies and one single maintenance study, involving a total of 1,200 patients and more than 600 clinical study sites, mainly in North America, Europe and Asia. The first patient is expected to be enrolled into the phase 3 program during September 2022.
Abivax is also anticipating the continuation and completion of its phase 2a maintenance study for rheumatoid arthritis (RA); and the continuation of R&D work on obefazimod.
Close to 80% of the net proceeds of the transaction will be allocated to the development of obefazimod, and primarily for the phase 3 program.
Around 8% will be used for financing of R&D and working capital and other general purposes, with the remaining 12% for the redemption of (and payment of amounts payable pursuant to) existing indebtedness.
The company said it expects the proceeds will provide it with the financial resources to fund its operations through Q1 2023.
More needed
Abivax said its additional cash needs (prior to the transaction) for the upcoming 12-month period amount to approximately €100 million ($100 million), or €54 million ($53.8 million) on top of the net proceeds of the transaction of €46 million ($45.9 million).
To cover these additional cash needs, the company said it is evaluating various different financing tools, both dilutive and non-dilutive. It has initiated discussions with lenders with the aim of securing in the short term a mix of dilutive and non-dilutive financings for an additional amount of up to €50 million ($49.8 million).
The company may consider further equity financing.
Without the extra cash, the company said it will review cost-cutting measures which could entail postponing or suspending some of its programs.
The total costs of the phase 3 UC program until the end of 2024, which is the expected date of the results of the two phase 3 induction studies, is estimated by the company to total €200 million ($199 million).