Abivax has bitten the bullet and issued new shares despite the deterioration of its stock price. The action has raised 49.2 million euros ($49.2 million), enabling the French biotech to keep going into the first quarter of next year but leaving it needing an additional 154 million euros to fund its phase 3 ulcerative colitis trial.
Paris-based Abivax was flying high when it raised 60 million euros in a stock offering in the summer of 2021, enabling it to price the shares at 30.55 euros a pop. The upward trajectory continued into the fall of 2021, when the stock hit a high of 36.70 euros, but since then the situation has soured. Having seen its share price fall 74% over the past year, Abivax ended up in a weak position from which to fund its phase 3 trial.
The biotech, which forecast in March that its runway would end in the third quarter, responded to the cash crunch by issuing more than 5 million shares, representing 33% of its current share capital, at 8.36 euros each. A transatlantic syndicate led by TCGX with participation from Venrock Healthcare Capital Partners, Deep Track Capital, Sofinnova Partners and others snaffled up the shares.
By prioritizing the development of obefazimod, the miR-124 upregulator also known as ABX464, Abivax calculates the money will enable it to fund its operations into the first quarter of 2023. In that time, the biotech expects to enroll the first patient in its pivotal phase 3 program.
With the first patient due to enter the program this month, Abivax expects to have data from the two phase 3 induction trials by the end of 2024. The estimated cost of delivering the results, 200 million euros, leaves the biotech with a 154 million euro hole in its spending plan even after the financing.
Abivax is talking to lenders to secure 50 million euros to cover its cash needs for the next 12 months. If the biotech is unable to secure financing, it will review cost-cutting measures, including potentially pausing or postponing some programs. Obefazimod is also in a phase 2a rheumatoid arthritis maintenance study.