Motif Bio has put together a financing package to give it the money to wrap up a Phase III trial of its antibiotic iclaprim. The agreement will see Motif Bio list on Nasdaq at the second attempt if it can sell at least 20 million shares through a placement in Europe.
London, U.K.-based Motif Bio sent out a distress signal late last month. At that time, the company’s liabilities exceeded its money by $4 million (€3.8 million), raising doubts about whether it had the means to finish a Phase III acute bacterial skin and skin structure infection trial. The situation arose after Motif Bio’s attempts in 2016 to list on Nasdaq and offload the ex-U.S. rights to iclaprim failed to yield a bank-balance-boosting deal.
Motif Bio now has the makings of such a deal. The first step is to place at least 20 million shares and 10 million warrants in Europe. Motif Bio said investors have expressed an interest in buying this many shares and warrants.
If Motif Bio can pull off the European placement, it will push ahead with a Nasdaq IPO. Motif Bio has priced combinations of 2.4 million U.S. shares and 1.2 million warrants at $6.98. But the offering will only go ahead if Motif Bio completes the European placement. Invesco Asset Management has agreed to buy 45% of the U.S. shares and warrants, giving Motif Bio the sort of insider support that helps get IPOs done. The original Nasdaq IPO plan had Invesco buying 25% of the proposed $35 million listing.
Motif Bio has scaled back its ambitions since then. The U.S. and European listings will generate $25 million, a sum that falls to $20.5 million after underwriting discounts and commissions are subtracted. Motif Bio thinks $20.5 million will enable it to keep the lights on until it finishes one of its two Phase III trials. Beyond that, Motif Bio will once again need to raise money, but, if the Phase III is a success, it will be in a stronger position to do so.