Bavarian Nordic may not have been able to float publicly for $86 million this month, but the biotech has still managed to get the cash it needs by raising the funds privately.
The Kvistgaard, Denmark-based company--which is developing vaccines that stimulate a T-cell response to fight infectious diseases and cancers--withdrew its plans for an initial public offering of $86 million last Wednesday, citing in its SEC papers that “market conditions” were to blame.
But this week, the biotech said it had shrugged of that disappointment and has now completed a private placement worth around $100 million. The company said in a statement this had been raised through an “accelerated book-building process” of 2.77 million new shares worth DKK10 each.
The total proceeds to BN reached DKK665 million ($99.8 million). Boosted by the new cash injection, the biotech has also raised its 2016 year-end expectations to DKK1.9 billion, compared to its previous guidance of DKK1.3 billion.
BN said it will use the cash to push on with its commercial vaccine pipeline, notably its cancer immunotherapy and MVA-BN RSV program, as well as for the potential expansion of its existing manufacturing facility.
The biotech commands a market cap of more than $1 billion and booked $149 million in sales last year, and has several research deals in place with Bristol-Myers Squibb ($BMY) and Johnson & Johnson’s ($JNJ) pharma arm Janssen.
The biotech’s lead drug, the investigational prostate-cancer vaccine Prostvac-VF, is currently undergoing late-stage trials and is being co-developed with BMS. Analysts at Edison Research have predicted that Prostvac could eventually achieve sales of $1.3 billion at peak (assuming a treatment price of $50,000 a year), should it gain approval.
BN has got caught up in a tough IPO market that has been suffering in recent months due to a poor financial environment. Some have managed to get their IPOs away--including U.K.’s Shield Therapeutics and CA-based Corvus Pharmaceuticals--but both had to settle for a major discount on what they had originally planned for.
And in the past week BN is just one of three biotechs to announce the ditching of an IPO, coming after Novartis-backed Parisian biotech GenSight Biologics dropped its $65 million public offering, while San Carlos, CA-based stem cell specialist BioCardia also halted its $50 million IPO. All blamed the ongoing headwinds hitting the financial market.
But private investment and VC funding has been the go-to strategy in the past quarter, with French MS specialist MedDay raising $39 million this month, and a recent round for J. Craig Venter’s San Diego outfit Human Longevity Inc. raising an impressive $220 million--with the biggest by far being the $450 million raised by Moderna Therapeutics in January.
- check out BN’s statement