Abivax announces successful oversubscribed EUR 130M cross-over financing at market price with top-tier US and European biotech investors

EQS-News: ABIVAX / Key word(s): Capital IncreaseAbivax announces successful oversubscribed EUR 130M cross-over financing at market price with top-tier US and European biotech investors 22.02.2023 / 18:05 CET/CESTThe issuer is solely responsible for the content of this announcement.
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Abivax announces successful oversubscribed EUR 130M cross-over financing at market price with top-tier US and European biotech investors
This financing was led by TCGX, with participation from existing investors Invus, Deep Track Capital, Sofinnova Partners, Venrock Healthcare Capital Partners, as well as from new investors Great Point Partners, LLC, Deerfield Management Company, Commodore Capital, Samsara BioCapital, Boxer Capital and others
Proceeds to be primarily used for further advancing the obefazimod pivotal Phase 3 clinical trial program in ulcerative colitis, expanding the cash runway until the end of the second quarter of 2024
PARIS, FRANCE, February 22, 2023 –  6.00 p.m. (CET) – Abivax (Euronext Paris: FR0012333284 – ABVX) (the 'Company'), a Phase 3 clinical-stage biotechnology company focused on developing therapeutics that modulate the immune system to treat patients with chronic inflammatory diseases, today announced the successful pricing of an oversubscribed EUR 130M financing with high-quality US and European biotech specialist investors (the 'Investors'), led by TCGX, with participation from existing investors Invus, Deep Track Capital, Sofinnova Partners, Venrock Healthcare Capital Partners, as well as from new investors Great Point Partners, LLC, Deerfield Management Company, Commodore Capital, Samsara BioCapital, Boxer Capital and others, by way of a reserved capital increase of EUR 130M through the issuance of 20,000,000 newly-issued ordinary shares with a nominal value of EUR 0.01 per share (the 'New Shares'), representing 89.6% of its current share capital, at a subscription price of EUR 6.50 per share (the 'Capital Increase').
Prof. Hartmut J. Ehrlich, M.D., CEO of Abivax said: 'We are excited to announce today's successful pricing of Abivax's oversubscribed capital increase of EUR 130M, with a balanced mix of top-tier existing and new investors, mostly US biotech specialists. We believe these new financial resources will allow us to move full steam ahead with our ongoing global clinical Phase 3 program of obefazimod for the treatment of ulcerative colitis. The recruitment of patients for this program is ongoing in the U.S. and the study centers in Europe, Latin America and Asia Pacific are expected to start including patients in the weeks and months to come. Based on our consistent Phase 2a and Phase 2b data, we expect that the Phase 3 studies will support the short- and long-term efficacy and safety profile of obefazimod. The Abivax team is fully focused on making obefazimod rapidly accessible to all the patients in need.'
Didier Blondel, CFO of Abivax, added: 'We are extremely pleased to announce our successful EUR 130M capital increase at market price. Abivax, once again, could attract new top-tier US and European biotech investors, including Great Point Partners, LLC, Deerfield Management Company, Commodore Capital, Samsara BioCapital, Boxer Capital and a few additional great names, as well as most of our existing US and European biotech investors. We believe this proves that Abivax and obefazimod are not only recognized within the scientific and medical communities, but also among very specialized financial investors who believe in the potential of obefazimod as an effective treatment option for chronic inflammatory diseases, starting with ulcerative colitis. Based on our current assumptions, our cash runway has been extended until the end of the second quarter of 2024. These new financial resources will be mainly used to continue our Phase 3 clinical program. Besides our ambition to confirm obefazimod's potential as a long-lasting and effective treatment for patients in need, we continue to give particular attention to the maximization of shareholder value. We are committed to securing the full funding of our Phase 3 clinical program in due course through additional non-dilutive and dilutive financial resources.'
Reasons for the issuance and use of the net proceeds of the Capital Increase, equal to EUR 123M
The Company plans to use the net proceeds of the Capital Increase for the following (on an indicative basis):
Launch and continuation of the clinical programs of obefazimod (ABX464), the Company's lead drug candidate in clinical development:
For ulcerative colitis ('UC'): continuation of the pivotal Phase 3 program, which was initiated in the first half of 2022 with the first patient enrolled in October 2022, and of the Phase 2a and 2b maintenance trials. The Phase 3 program will combine two induction trials and one single maintenance trial, involving a total of 1,200 patients and over 600 clinical study centers, mainly in North America, Europe, Latin America and Asia Pacific.
Continuation of the research and development ('R&D') work on the compound's mechanism of action, nonclinical work, chemical and pharmaceutical development work, regulatory and pharmacovigilance activities for obefazimod, and the remaining clinical activities for obefazimod outside the ulcerative colitis indication (Phase 2a maintenance trial in rheumatoid arthritis ('RA') and various current and future Phase 1 trials necessary to prepare potential submissions for marketing authorizations for obefazimod);
Approximately 80% of the net proceeds of the Capital Increase will be allocated to the development of obefazimod as per the above aspects (and primarily for the Phase 3 UC program);
Financing of R&D and working capital and other general purposes of the Company, accounting for approximately 10% of the proceeds; and
Redemption of (and payment of amounts payable pursuant to) existing indebtedness, accounting for approximately 10% of the proceeds (approximately EUR 12.7M split between EUR 8.9M paid under the Kreos loans, EUR 1.6M paid under the OCEANE convertible bonds, EUR 2.1M paid under the Société Générale state guaranteed loan, and EUR 120K paid as reimbursement linked with the Ebola program financed by BPI).
The Company expects that the proceeds from the Capital Increase will provide the Company with financial resources to fund its operations until the end of Q2 2024, based on a prioritization of its UC program.
The Company certifies that, in its view, following the settlement-delivery of the new shares issued in the framework of the Capital Increase, the Company's financial resources will be sufficient to cover its net financing needs for the upcoming twelve months.
The Company specifies that the additional financing needs required to complete its Phase 3 clinical program for obefazimod in UC until the end of 2024, which corresponds to the period during which the clinical results of the induction phase are expected, amount to approximately EUR 154M, thus requiring additional financing estimated at EUR 31M beyond the EUR 123M obtained in the framework of the Capital Increase. In addition, EUR 70M will be required to obtain clinical results for the maintenance phase of treatment planned for the end of 2025. Thus, the total amount of additional financing required to cover the Company's financial needs until the completion of the entire Phase 3 program for obefazimod in UC at the end of 2025 amounts to approximately EUR 224M before the completion of the Capital Increase, i.e., EUR 101M in addition to the amounts financed by the Capital Increase.
The above amounts also take into account the amounts required for the continuation of long-term maintenance studies for the Company's various programs (Phase 2a and 2b in UC and Phase 2a in RA), other R&D expenses, general expenses, as well as the repayment of the Company's existing loans over the periods considered.
The financing requirements for the development of obefazimod in the treatment of UC detailed above are based solely on clinical and regulatory work. They do not include investments relating to the preparation of market access or the establishment of marketing and commercial resources necessary for the commercialization of the drug candidate. These costs have not been quantified by the Company at this stage.
In order to meet the above-mentioned short- and medium-term financing needs, the Company is seeking to obtain, as soon as possible, one or more dilutive or non-dilutive financings that are the most favorable for the Company, depending on market conditions. In particular, the Company is considering the following alternatives:
Carrying out one or more new capital increases,
Entering into loan or issuing bonds; in particular Abivax has received a non-binding indicative offer from lenders, which is currently being evaluated by the Company, for the implementation of dilutive and non-dilutive financing for a total amount of up to EUR 45M. The implementation of this financing would be, in particular, conditional upon the prior repayment of the existing Kreos loans (approximately EUR 11M on the date hereof), and/or
Conclusion of regional licensing agreements for obefazimod, specifically targeting Asia.
Key characteristics of the Capital Increase
The New Shares are being issued through a capital increase, without existing shareholders' preferential subscription rights, reserved to a specified category of investors (investors in the pharma sector) pursuant to the 4th resolution of the Annual General Shareholders' Meeting held on November 9, 2022.
In accordance with the internal rules of the Company's Board of Directors, the representatives of Sofinnova Partners and of Santé Holding did not participate in the deliberations of the Board of Directors authorizing the Capital Increase.
The number of New Shares to be subscribed, the subscription price and the list of investors that may subscribe were decided by the Company's Chief Executive Officer (Directeur Général), in accordance with a sub-delegation granted by the Company's Board of Directors on February 20, 2023.
The subscription price of the New Shares was set at EUR 6.50 per share, i.e., with a 5.05% discount to the last 15-day VWAP preceding the date the issue price was set (i.e., from February 6, 2023, to February 21, 2023).
Sofinnova Partners, which previously held a 11.3% stake in the Company, subscribed to the Capital Increase for an amount of EUR 9.98M corresponding to 1,535,000 New Shares. After the Capital Increase, Sofinnova Partners will hold 9.6% of the share capital of the Company. Santé Holding, which previously held a 3.2% stake in the Company, subscribed in the Capital Increase for an amount of EUR 0.25M corresponding to 38,461 New Shares. After the Capital Increase, Santé Holding will hold 2.3% of the share capital of the Company. Funds managed by Truffle Capital, which previously held a 22.8% stake in the Company, did not participate in the Capital Increase. After the Capital Increase, funds managed by Truffle Capital will hold 12.0% of the share capital of the Company.
Settlement and delivery of the New Shares is expected to occur on or around February 27, 2023. Upon delivery, the New Shares will be fungible with the Company's existing shares.
The New Shares will be admitted to trading on Euronext Paris with ticker symbol ABVX on February 27, 2023, and bear ISIN FR0012333284.
Lock-up agreements
In the context of the Capital Increase, the Company has agreed to a lock-up undertaking on the issuance or sale of shares or of securities giving access to the share capital, among other things, for a period of 90 calendar days following the execution of the subscription agreements entered into with the Investors, subject to certain customary exceptions.
Certain of the Company's shareholders, board members and key officers who own shares of the Company have also agreed to a lock-up undertaking on the sale of shares or of securities giving access to the share capital, among other things, for a period of 90 calendar days following the execution of the subscription agreements entered into with the Investors, subject to certain customary exceptions.
Investors participating in the Capital Increase have not taken any lock-up undertakings relating to the shares subscribed in the framework of the Capital Increase.
Impact of the Capital Increase on the share capital
Following the completion of the Capital Increase, the New Shares will represent 47.2% of the share capital of the Company and the Company's total share capital will be EUR 423,315.85 divided into 42,331,585 shares. For illustration purposes, a shareholder holding 1% of the Company's share capital prior to the Capital Increase, will hold 0.5275% of the Company's share capital upon completion of the Capital Increase (or 0.5060% on a fully-diluted basis).

Consultants
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Others*
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