Sofinnova invests in Abivax to delay cash crunch

Kinam Hong, partner at Sofinnova Partners (Sofinnova Partners)

Sofinnova Partners has invested €12 million ($14 million) in Abivax, securing itself more than 10% of the company. The investment extends Abivax’s cash runway out to the middle of 2020, buying the biotech time to fund ABX464 to milestones while seeking a partner for the asset.

Abivax ended 2018 with €13 million in cash after burning through about €1.5 million a month that year. A loan agreement with Kreos Capital and equity line with Kepler Cheuvreux gave Abivax access to €17 million more. But with Abivax’s beaten-down stock price deterring management from issuing equity, the company’s ability to secure funding beyond these sources has been constrained.

Now, Abivax has softened its resistance to the issuance of equity but done so through an agreement that spares it the need to discount its stock. Sofinnova took the other side of the deal, picking up 1.5 million shares at the market rate of €8 a piece.

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Abivax will use the €12 million to advance clinical trials of ABX464 in ulcerative colitis, rheumatoid arthritis and Crohn’s disease. ABX464 began life as a HIV candidate, but evidence that the drug acts on anti-inflammatory molecules IL-22 and miR124 spurred Abivax to expand beyond R&D, leading to its current crop of midphase trials in anti-inflammatory indications.

With Sofinnova’s support, Abivax is now positioned to find out whether its anti-inflammatory pivot will pay off. 

“Abivax now has sufficient time and resources to leverage maximum value in ongoing partnering discussions for ABX464, while also providing funding to achieve important value-creating milestones in three phase 2 trials of ABX464 in ulcerative colitis, rheumatoid arthritis and Crohn’s disease,” Abivax CEO Hartmut Ehrlich said in a statement.  

The stock sale gives Sofinnova, a new investor in Abivax, a 12.7% stake, lessening the biotech’s reliance on its founding shareholder Truffle Capital. Truffle now owns 45.8% of Abivax, down from almost 70% last year. 

While Sofinnova picked up the stock at the current market rate, it nonetheless paid a small amount by historical standards. Since listing its stock in Paris in 2015, Abivax has seen its share price fall by more than 60%. The stock has fallen more than 30% in 2019.

Abivax is looking to the anti-inflammatory data to spark a turnaround, enabling it to secure money to advance ABX464 in multiple indications while also working on ABX196, a phase 1/2 liver cancer drug that will receive some of the Sofinnova funding.

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