Alder prices $150M offering to fund migraine market scrap

Alder is offering shares to fund eptinezumab up to a filing with the FDA.

Alder Biopharmaceuticals has priced a $150 million follow-on offering. The stock sale will set Alder up to forge ahead with development of a migraine drug it thinks can carve out a space in a market fought over by larger rivals such as Amgen and Eli Lilly.  

Bothell, Washington-based Alder plans to use the money to finish a pivotal trial program for eptinezumab and file for approval with the FDA. In parallel, Alder will work to build up a commercial operation that will have to compete with deeper-pocketed rivals that have a head start. 

Alder is one of a clutch of companies developing a CGRP migraine drug. The presence of Allergan, Amgen, Eli Lilly and Teva in the race to market has raised doubts about whether fierce competition will stop any of the companies making a big commercial success of their drugs. Lacking the commercial infrastructure of its rivals, Alder risks being squeezed out.  

Stellar data would help Alder to quell such fears, but the results it presented late last month fell short of the high standard demanded by investors. The phase 3 trial met its primary endpoint. But with larger rivals having already posted superficially-comparable data, shares in Alder traded down 28% as the challenge of playing catch up without a clear efficacy edge hit home.  

News of the follow-on offering sent Alder’s stock tumbling a further 17% on Wednesday. Alder ultimately got investors on board at $10 a share, just shy of its closing price yesterday and the same price it received when it went public in 2014. 

That price is a long way short of the $30 a share Alder commanded for a period last year. But it nonetheless means it has the money to test its belief it can outcompete the larger rivals that have contributed to the beating down of its share price.

Alder’s pitch is built upon its quarterly intravenous dosing schedule. CGPR drugs in development at Alder’s rivals are dosed more frequently, enabling the smaller company to position itself as a more convenient option for patients.   

The follow-on offering haul will add to the $290 million Alder had at the end of March. That might sound like a lot but Alder is burning through cash now that is at the business end of a pivotal trial program. Management warned investors it could use up the $290 million by the first quarter of next year.