By Sabrina Valle
NEW YORK, July 1 (Reuters) – Abivax SA raised $800 million in an expanded share sale on Wednesday after strong investor demand, valuing the French biotechnology company at nearly $11 billion and easing pressure to pursue a near-term sale.
Abivax, which is developing treatments for chronic inflammatory diseases including ulcerative colitis and Crohn’s disease, has long been viewed by investors and industry executives as a potential takeover target for larger drugmakers seeking to build their inflammation and immunology businesses.
The company’s lead drug candidate, obefazimod, is in late-stage, Phase 3 testing. The capital raise is enough to fund research and operations until the second quarter of 2029, the company said in a statement.
A sale remains possible, but the financing gives Abivax greater strategic flexibility and removes the time pressure that often accompanies biotech deal talks, a person familiar with the matter said.
Abivax increased the size of its offering by a third, from $600 million to $800 million, as orders exceeded the shares available, the company said in a statement.
CANCER CASES OVERSHADOW TRIAL RESULTS
Abivax U.S. listed shares closed at $132.56 on the Nasdaq on Wednesday after falling as low as $72.50 last month, following investor concerns over cancer cases reported in the trial.
Positive Phase 3 results for obefazimod disclosed on June 1 were overshadowed by reports of seven malignancy cases among 195 patients receiving the 50-mg dose. Abivax said investigators considered the cases unrelated to treatment.
The uncertainty led some pharmaceutical companies to wait for additional safety data before pursuing any potential transaction, two people close to the discussions said.
The decision to raise capital followed talks with potential buyers in mid-June, when the company’s market capitalization was about $7 billion, said a second person, who requested anonymity because the information is private.
On Tuesday, Abivax reported additional Phase 3 maintenance data that helped alleviate some of the concerns that had weighed on the shares earlier in the month.
OFFERING PRICED AT PREMIUM
The drug developer is selling 6.4 million American Depositary Shares (ADSs), each representing one ordinary share, at $125 apiece.
The offering was priced at a 2.39% premium to the stock’s three-day volume-weighted average price, reflecting strong demand.
The company has also granted underwriters an option to buy up to 960,000 additional ADSs, or 15% of the deal, which could lift total proceeds to about $920 million if exercised in full.
Abivax said it plans to use the proceeds to fund the potential commercialization of its lead drug candidate, obefazimod, in the United States, as well as clinical development in ulcerative colitis and Crohn’s disease.
Leerink Partners, Morgan Stanley, Piper Sandler and Guggenheim Securities are acting as joint bookrunners on the transaction. Law firm Cooley also advised Abivax.
(Reporting by Sabrina Valle in New York; Editing by Matthew Lewis)
Comments