GeNeuro has sold stock at a knock-down price to fund a multiple sclerosis trial. The €17.5 million ($19.3 million) private placement averts a cash crunch and sets GeNeuro up to test temelimab in MS patients whose disability progresses without relapses.
Temelimab, also known as GNbAC1, is an antibody against a pathogenic envelope protein, HERV-W. By neutralizing the protein, GeNeuro thinks it can stop the activation of microglia in the brain and the resulting attacks on myelin. GeNeuro landed a deal with Servier on the strength of early clinical data on the drug but subsequently missed the primary endpoint in phase 2b and lost its partner.
The phase 2b failure and end of the Servier partnership dented GeNeuro’s standing with investors, causing its share price to fall from above €12 to below €3 over a 16-month period. Throughout that time, GeNeuro continued to generate results that it thinks show temelimab has a future.
GeNeuro secured funding to continue that effort on Friday. In a private placement, GeNeuro sold close to 6 million shares at €2.95 a piece. The placement raised €17.5 million but entailed the sale of stock at below the market rate. Shares in GeNeuro have traded well above €3 throughout most of 2020, never dipping below €3.12 and going as high as €3.84.
The offering eliminates near-term concerns about GeNeuro’s ability to keep going. GeNeuro ended last year with €5.9 million in cash, a sum insufficient to keep the lights on through to the delivery of data from the latest temelimab trial.
With existing major backer Institut Mérieux and new international investors stepping up, GeNeuro now has the money to start a clinical trial of temelimab in partnership with researchers at Karolinska Institutet and the Academic Specialist Center in Stockholm later this quarter. GeNeuro expects to have data from the trial in the second half of next year.
The single-center study will initially enroll 40 patients whose disability progresses without relapses. Through the trial, GeNeuro hopes to show the safety and tolerability of temelimab at higher doses while gathering evidence of the antibody’s effects on biomarkers of disease progression.
“It is evident that currently available disease modulatory therapies for MS exert very limited effects on the progressive aspect of MS and that this phase starts early in the disease course. A role of pHERV-W Env in progressive disease worsening is supported by accumulating preclinical and clinical evidence,” Fredrik Piehl, principal investigator of the study, said in a statement.
GeNeuro has already put temelimab through larger tests, most notably the 270-subject failed phase 2b and its slightly smaller extension study. However, while GeNeuro has sought to frame the results as validating the neuroprotective effects of temelimab, it is yet to land a partner for the program. GeNeuro began looking for a U.S. partner shortly after posting data in March 2018 and took the talks global after Servier pulled out later that year.