Riding higher on Celgene filing, Agios proposes $150M offering to fund late-phase trials

money

Agios ($AGIO) has filed to raise $150 million in a follow-on offering. The proposal, which comes one week after news from Celgene ($CELG) boosted Agios’ stock price, positions the cellular metabolism specialist to add to the $512 million in cash it sat on as of the end of June.

Following the adage of raising money when you can, not when you must, Agios has decided now is the time to add to its coffers. The follow-on financing follows shortly after news that Celgene plans to file for approval of its Agios-partnered acute myeloid leukemia (AML) drug by the end of the year drove the latter company’s stock up 20%. While that surge left Agios’ stock well short of the peaks it hit earlier this year, it lifted it out of the doldrums it had resided in throughout August.

On the back of the uptick, Agios is looking to raise cash. The money is earmarked for late-stage development and pre-commercial activities for Agios’ AG-120, a wholly-owned IDH1 mutant inhibitor that is currently being studied in a handful of Phase I and Phase I/II clinical trials. Those studies are looking at AG-120 in patients with forms of AML and various solid tumors. Celgene is on the hook for the cost of developing and commercializing IDH2 mutant inhibitor AG-221.

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While Agios has a well-stocked roster of trials--the clutch of AG-120 studies are joined in the pipeline by pyruvate kinase deficiency programs and a jointly-funded collaboration with Celgene--it expected its $512 million pre-follow-on offering cash pile to support its operation into 2018. Unless Agios accelerates its spending, that runway will extend out further still once the $150 million is added to its already sizable cash reserve.

Such follow-on offering were commonplace in biotech last year but have been less ubiquitous so far in 2016. According to data posted on Twitter by BioCentury’s Matt Krebs, biotechs raised $22.8 billion in follow-on offerings last year. As of the time the data were compiled, the figure for 2016 stood at $6.2 billion.

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