Erytech (EPA:ERYP) has raised €25.4 million ($27.4 million) from institutional investors in the U.S. and Europe. The private placement gives Erytech cash to advance its lead tumor starvation drug and move other programs toward and into the clinic ahead of its possible listing on Nasdaq.
Lyon, France-based Erytech will funnel the money into three drug development programs, the most advanced of which is Graspa, a drug that destroys asparagine in an attempt to starve cancer cells of nutrients. Erytech is developing the drug in four indications, but singled out the drives to make it a first-line treatment for acute lymphoblastic leukemia (ALL) in Europe and the U.S. and a program targeting non-Hodgkin lymphoma as its priorities for the fresh funding. An application for approval in ALL is already in front of European regulators. Erytech expects a decision by the end of next year.
A chunk of the remaining cash will go into a pair of early-stage programs. ERY-MET, an encapsulation of methionine-γ-lyase inside red blood cells designed to induce tumor starvation by breaking down the amino acid methionine, is set to enter the clinic. Erytech is looking to apply its encapsulation technology in other ways, too. The work has resulted in ERY-VAX, a research stage vaccine that uses red blood cells to deliver immune-activating dendritic cells. Erytech will advance the program further into preclinical on the back of the private placement cash.
The new fundraising comes 5 months after Erytech outlined plans to list on Nasdaq. Those plans are still in place. "This capital increase, which has strengthened our base of investors in the U.S., is also consistent with our overall financing strategy, which continues to include a potential registered initial public offering of our securities in the U.S.," Erytech CEO Gil Beyen said in a statement. Erytech has long courted U.S. investors, making the leap to Nasdaq a natural progression, but the market has been through more downs than ups since its plans started to solidify earlier this year.
Since Erytech unveiled its plan to list on the exchange in July, the Nasdaq Biotechnology Index ($IBB) has fallen 11% and multiple companies have downsized or canned their IPO ambitions. The private placement, which adds to the €28.2 million in cash and short-term investments possessed by Erytech at the last count, gives the French drug developer more flexibility to pick the best time to make its move. Increasingly, companies are choosing not to file for an IPO. The traditional post-Thanksgiving surge in IPO roadshows has failed to materialize, prompting Renaissance Capital to predict a slow end to 2015.