(BFM Bourse) – In the wake of the success of the clinical trial of its Viaskin Peanut patch with very young patients, the French specialist in the fight against food allergies completes a private placement for an amount of 181 million euros to finance its activity beyond the next 12 months and to prepare the trial for those over 4 years old.
Who said private equity funds focus on short-term profitability? Once again, the main shareholders of the French biotech DBV Technologies are coming to the aid of the company which is working on a treatment of allergies based on epicutaneous immunotherapy technology (EPIT) without having managed to approve its main project for the moment. The largest shareholder in biotech, the American fund Baker Bros, has thus contributed without fail to all fundraising since the Nasdaq IPO in 2014, without certainty of making its investment profitable, while DBV still has to convince the American agency. of the drug through a future phase 3 trial (last stage of clinical trials before possible marketing) on a modified version of its Viaskin Peanut patch.
Main shareholder with 18.95% of the capital of DBV, the hedge fund founded by brothers Julian and Felix Baker, whose assets now amount to more than 25 billion dollars, further strengthens its position within the framework of a placement which will bring in a total of 181 million euros, or net proceeds of approximately 170 million euros once the costs of the operation have been deducted.
Concretely, DBV will issue 32,855,669 ordinary shares, as well as 28,276,331 pre-funded warrants. A pool of investors will subscribe the shares at a price of 3 euros per unit and the subscription warrants at a pre-financed price of 2.90 euros. Each of the warrants will give the right to subscribe to a new ordinary share with a validity of ten years. The main characteristic (resulting from a usual practice on the American markets, known as a “pre-funded warrant”) is that the exercise price of a share resulting from the subscription warrants, i.e. 3 euros, is released in advance up to of the 2.90 euros paid on the day of issue and not on the day of exercise. Only the balance of the exercise price, ie 0.10 euro corresponding to the nominal value of the ordinary share, will be paid by the investors on the day of the exercise, if applicable.
Braidwell LP, another fund dedicated to life sciences, recently placed on DBV with 9.9% of the capital, and funds advised by Baker Bros, Advisors LP and BpiFrance Participations, existing shareholders of the Company, and Venrock Healthcare Capital Partners, subscribed for $11 million, $38 million, $8 million and $30 million of common stock, respectively.
In addition, Braidwell LP, funds advised by Baker Bros. Advisors LP and Venrock Healthcare Capital Partners subscribed to $19 million, $41 million and $28 million of prefunded warrants, respectively.
Nearly 790 million euros raised since 2012
Certain other investors, such as Fairmount, RA Capital Management and Vivo Capital participated in the private placement. Schematically, after issuance of new shares and warrants (but before any exercise of the warrants), Baker Bros and its related entities will hold 24.96% of the capital of the French biotech, Braidwell 9.95%, Venrock 9.89% , Bprifrance Participations 7.61% and the other reference investors 6.27% collectively, the free float standing at around 41%.
The money thus injected will be added to the $75.7 million in cash in the company’s coffers at the end of May to allow it to continue its activities until the beginning of the second quarter of 2023 according to the current expenditure budget. Specifically, the funds will first be used to fund the new pivotal Phase 3 study for Modified Viaskin Peanut (mVP) called the SPEED study, if the FDA gives the green light to this trial, as well as activities associated with the approval. and potential product launch. For information purposes, the estimate of the net proceeds from the issue of new shares and subscription warrants is approximately 168.6 million euros, which may reach a maximum of 171.5 million euros in the event of the exercise of all vouchers.
The operation should bring to more than 790 million euros the amount raised by DBV Technologies on the markets since its listing in 2012 on Euronext Paris. The importance of the sums raised is to be compared with the amounts swallowed up in research and development, to the tune of more than 100 million euros each year on average, even if this item has decreased to 70 million in 2021 taking into account the sequencing clinical trials.
This further strengthening of the company’s balance sheet and the testimony of the unwavering support of its shareholders allowed the title to continue on Friday the surge started on Wednesday with the good results of EPITOPE, DBV gaining another 21.72% to 5.11 euros around 10:45 a.m., the highest since December 2021.
Guillaume Bayre – ©2022 BFM Bourse