Money from home: European biotech turns back to home turf

Print 22 April 2016
Cormac Sheridan / BioWorld

DUBLIN – Even if the U.S. public markets are cooling on European biotech, a clutch of recent transactions suggests that companies' home markets still remain supportive. Financing activity has been sluggish this year, in contrast with last year, but a trickle of cash is still flowing into European biotech.

Vaccine developer Bavarian Nordic A/S closed a DKK665 million (US$100 million) private placement in Copenhagen Monday, less than a week after pulling a planned $86 million capital raise on Nasdaq. And although Paris-based gene therapy firm Gensight Biologics SA withdrew its $65 million IPO on Nasdaq, Geneva-based Geneuro SA had better luck in Europe, albeit with a smaller scale transaction. It raised €33 million (US$37.3 million) in an IPO on the Euronext exchange in Paris. In Sweden, mitochondrial medicine specialist Neurovive Pharmaceutical AB is seeking SEK94.4 million gross (US$11.6 million) or SEK78.4 million net in a rights issue due to close on May 2.

Kvistgaard, Denmark-based Bavarian Nordic raised the cash through an accelerated book-building process. It priced the offering of about 2.8 million new shares at DKK240 per share, just a shade off the stock's closing price of DKK250 the day prior to the disclosure.

The company plans to use the proceeds to fund two clinical development programs – its poxvirus-based therapeutic cancer vaccine, CV-301, which is undergoing a phase II trial in bladder cancer in combination with Bacillus Calmette-Guerin (BCG), the standard-of-care treatment for patients at risk of recurrence; and its modified-Vaccinia-ankara-based vaccine against respiratory syncytial virus, MVA-BN-RSV, which is undergoing a phase I trial in healthy volunteers. It may also use the cash to expand its manufacturing facilities.

Shareholders responded positively to the move, despite the dilution – the new share issue represents just under 9 percent of the company's post-transaction equity. Bavarian's stock had climbed upward since the new plan was unveiled last Thursday. The stock closed Monday at DKK270, up DKK10.

Geneuro's IPO was the first on the pan-European Euronext exchange this year, in marked contrast to last year when nine firms raised €312.6 million in aggregate. Although based in Switzerland, Geneuro has French connections – it was spun out from Lyon-based Biomérieux SA in 2006 to develop an antibody, GNbAC1, which inhibits MSRV-Env, a glycoprotein encoded by a human endogenous retroviral (HERV) element called MS-associated retrovirus (MSRV). It plans to use the proceeds to expand an ongoing phase IIb trial in multiple sclerosis, by opening several U.S. clinical centers. It will also explore the drug's potential in other indications and prepare for a U.S. phase III trial. The company issued about 2.5 million new shares, priced at €13 per share, which implies a valuation of about €190 million. The stock (GNRO) edged back to €12.23 on its first day of trading, last Friday, and slipped further on Monday, to close at €12.11.

Meanwhile, Dublin-based Amryt Pharma plc is set to go public on London's AIM, via a reverse merger with the former oil and gas firm Fastnet plc. It is also raising £10 million (US$14.3 million) as part of the process, by selling 41.7 million shares at £0.24 per share. That implies a market cap of about £50 million. (SeeBioWorld Today, April 1, 2016.)

Fastnet shareholders voted in favor of the plan Monday, and shares in Amryt are due to begin trading Tuesday under the ticker symbol AMYT.

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