Clinical-stage biopharmaceutical company 89bio (Nasdaq: ETNB) has raised $83.8 million in a secondary offering on Nasdaq. The company, which is focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases, announced the closing of its upsized underwritten public offering of 3,047,040 shares of common stock.
The offering included the exercise in full by the underwriters of their option to purchase up to 397,440 additional shares of common stock, at a public offering price of $27.50 per share.
89bio held its IPO last November when it raised $85 million at a company valuation of $193 million. The company's share price fell 1.46% yesterday on Nasdaq to $31.75, giving a market cap of $438.3 million, more than double its market cap at its IPO.
BofA Securities, SVB Leerink and RBC Capital Markets acted as joint book-running managers for the offering. Oppenheimer & Co. acted as co-manager for the offering.
89bio is in effect a spin-off of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Teva inherited what is now 89bio's lead product candidate, BIO89-100 for the treatment of nonalcoholic steatohepatitis (NASH) - a severe form of nonalcoholic fatty liver disease - in one of its acquisitions. Even though the product was not part of Teva's core focus on neurology, oncology and women's health, the Israeli pharmaceutical company was reluctant to relinquish the drug and it continued allocating funds for its development.
However, when Teva became mired in cash flow difficulties following the debt it took to buy Actavis in 2015, it decided to spin it off into a separate company and retain certain rights. 89bio has already paid Teva $6 million and is committed to paying up to a further $135 million and royalties, if the product reaches the market and is commercially successful.
B1089-100 is currently in a proof of concept Phase 1b/2a clinical trial and the funds from the public offering will be used to accelerate trials. 89bio is headquartered in San Francisco with its development center in Herzliya.
Published by Globes, Israel business news - en.globes.co.il - on July 14, 2020
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