(BFM Bourse) – The company announced on Friday a capital increase of 46 million euros, carried out with a premium of nearly 10% compared to the closing price the day before. If the group still has significant financing needs to fill, the market is for the moment reassured.
Abivax offers itself a significant breath of fresh air. The biotechnology company based in Montpellier and Paris announced on Friday that it had secured significant financing for a total amount of 49.2 million euros.
This considerable company-wide sum – more than a third of its market capitalization – consists mainly of a capital increase of 46.2 million euros reserved, with cancellation of the preferential subscription right (DPS) . This capital increase will be subscribed by certain current shareholders (Truffle Capital, Sofinnova Partners, Santé Holding) but also new investors, namely the American funds TGX, Venrock Healthcare Capital and Deeptrack Capital.
Abivax will thus issue 5.53 million shares at a subscription price of 8.36 euros per share. Important point: this price reflects a premium of 9.6% compared to the closing price on Thursday.
A (slightly) recomposed capital
“While the market context has been complicated, especially for biotechs since mid-2021, Abivax not only manages to carry out a major capital increase but also to do so with a premium on the share price”, underlines Mohamed Kaabouni. , analyst at the Portzamparc design office.
Following this capital increase, which will result in a dilution of approximately 25% for shareholders other than those participating in it, Truffle Capital will drop from 30.46% of the capital to 23.80%, Sofinnova Partners from 11.59% to 11.34%, Santé Holding from 3.59% to 3.15%. New US investors will own 20.83%.
The other part of the financing consists of 2.9 million euros in “royalty certificates”. The investors – who are the same as those subscribing to the capital increase – will be entitled to a maximum of 2% of the potential net sales generated by future indications for obefazimod, the company’s lead molecule. The amount of royalties likely to be due under the certificates is capped at 172 million euros, nevertheless specifies the company.
Promising potential
Abivax intends to use the funds raised to launch and develop clinical programs of obfazimod, in particular in ulcerative colitis, an inflammatory disease which affects 1 million people in the United States and as many in Europe, as well as in rheumatoid arthritis, a disease autoimmune chronic inflammatory disease. The company also intends to repay certain loans.
On the Paris Bourse, the Abivax share takes off, taking 11.4% to 8.50 euros, more than the premium granted as part of the capital increase.
“The market reaction reflects a relief effect: cash is the only real problem for Abivax, whose potential for its flagship molecule, obefazimod, is substantial. We are talking about a ‘blockbuster’ with potential revenues of more than 1 billion euros, with very varied indications, in inflammatory diseases, in particular”, explains Mohamed Kaabouni.
“This funding gives the company a break to breathe for a few months, find other sources of funding and launch their phase III study” (last stage of clinical trials before possible marketing), he continues.
More than 50 million euros still to be found in the coming months
Abivax indicates that the financing announced this Friday provides it with the necessary resources to last until the end of the first quarter of 2023. On a longer horizon, that is to say the whole of the next twelve months, the company estimates that he will have to find another 54 million euros.
To obtain this sum, the group explains that it is evaluating both dilutive and non-dilutive financing tools. “In particular, the company has initiated discussions with lenders with the aim of obtaining in the short term a combination of dilutive and non-dilutive financing for a total amount of up to an additional 50 million euros”, announces- she.
Abivax also reserves the possibility of carrying out new financing by means of a capital increase. “In the absence of the necessary financing, the company will consider solutions to reduce its costs which could involve delays or suspensions of some of its programs”, warns the group.
In addition, to conduct the only phase III program trial evaluating obefazimod in ulcerative colitis until the end of 2024, the period expected from the results, Abivax indicates that it will have to pay a total of 200 million euros…
Julien Marion – ©2022 BFM Bourse
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