Finance Watch: Alphamab's $100m Series A Continues Theme Of Big Investments In China Biopharma

The US may be in Thanksgiving mode, but companies in other parts of the world continue to come forward with venture capital investment news, including China's Alphamab Oncology with a $100m Series A round.

Suzhou-based Alphamab said on Nov. 16 that the proceeds will fund global clinical development of its cancer drug pipeline, including a second-generation immuno-oncology asset, as well as expansion of its clinical and commercial teams and construction of a biologics manufacturing facility. The financing also continues a trend of big investments in China-based biopharmaceutical companies.

Alphamab joins a growing list of drug developers bringing in $100m or more in early- and mid-stage funding, such as Shanghai-based I-MAB Biopharma, which raised a $220m Series C round in mid-2018. (Also see "Finance Watch: Global Ventures Step Into The Spotlight As The US Takes A Breather" - Scrip, 9 Jul, 2018.) June was a big month for mega-rounds in China with Brii Biosciences and CStone Pharmaceuticals Co. Ltd. bringing in $260m each in Series A and B rounds, respectively. (Also see "Venture Funding Deals: Two Companies With China Ties Raise $260m Each" - Scrip, 5 Jun, 2018.)

Big private fundraisings have been followed by initial public offerings on the Hong Kong Exchanges and Clearing Market (HKEX) in the wake of loosened rules for pre-revenue companies. (Also see "Hong Kong Ushers in 'New Era' For Bioventures As Listing Rules Eased" - Scrip, 1 May, 2018.)

Hua Medicine Ltd. garnered $117.4m in Series D and E cash in March then launched an IPO on the HKEX in September. Similarly, Innovent Biologics Inc. closed a $150m Series E round in April and went public in Hong Kong at the end of October. (Also see "Strong Innovent IPO Restoring Faith In HK Biotech Listings? " - Scrip, 31 Oct, 2018.)

Alphamab said "a number of well-regarded institutional investors" backed its Series A round, including Advantech Capital, PAG, China Venture Capital Fund, OrbiMed, Heritage Provider Network and Janchor Partners.

The company took on the oncology pipeline of 2016 start-up Alphamab Co. Ltd., including bispecific and mixed antibodies, such as the PD-L1 inhibitor KN035 (envafolimab) that's in pivotal trials in China, the PD-L1/CTLA-4 bispecific antibody KN046 in Phase I in Australia and entering Phase I/II in China, the HER2-inhibiting bispecific KN026 that's in Phase I in China and soon to enter Phase I in the US, and the immunomodulator KN019 in Phase I in China with plans to begin Phase II in the first half of 2019.

Among other recent venture capital financings:

• Inflazome Ltd. of Dublin, Ireland and Cambridge, UK said on Nov. 19 that it brought in €40m ($46m) in a Series B round to advance its small molecule anti-inflammatory drugs directed against the NLRP3 inflammasome. Multiple clinical trials are expected to get under way in 2019 using proceeds from the Series B, which was led by Forbion with participation from Longitude Capital, Novartis Venture Fund and Fountain Healthcare Partners.

• QurAlis Corp. in Cambridge, Mass. announced on Nov. 19 that it raised an extension of its seed financing, bringing the round's total to $5.5m, which will help the company take its precision medicines for the treatment of amyotrophic lateral sclerosis, frontotemporal dementia and other neurological diseases from preclinical to clinical testing. QurAlis also said it won a Pfizer Inc.-sponsored "golden ticket" to occupy space in the LabCentral incubator in Cambridge and it has become a resident of the [Johnson & Johnson Innovation - JLABS] incubator. Pfizer Ventures upped its commitment to invest in neuroscience start-ups earlier this year and maintained its partnership with LabCentral. (Also see "Finance Watch: Pfizer Ventures' Dalton Makes Sense Of Neuroscience Focus Within New $600m VC Fund Commitment" - Scrip, 12 Jun, 2018.) Amgen Inc. provided QurAlis with its first LabCentral golden ticket in 2017. (Also see "Green Shoots: Pharma Investments In Early Innovation Support Biotech Growth" - Scrip, 24 Jun, 2016.)

• Baltimore, Md.-based AsclepiX Therapeutics Inc. announced $5m in new capital on Nov. 13 from a convertible note funding led by Barer & Son Capital with participation from Rapha Capital Management, Salem Partners, TEDCO and Piedmont Capital Partners. The company will use the funding to prepare lead drug candidate AXT107 for Phase I/II clinical trials in diabetic macular edema (DME) and wet age-related macular degeneration (AMD). The asset inhibits both VEGF-A and Tie2, and it may require less frequent injections than standard-of-care VEGF inhibitors for DME and AMD.

• KidneyCure Ltd. in Tel Aviv said it has raised $4m to date, including recent investments by Aurum Ventures and Direct Insurance, for its development of autologous, revitalized renal progenitor cells as personalized medicines that are designed to compensate for renal cell depletion in advanced chronic kidney disease. The cells may be able to improve kidney function, prevent the formation of fibrotic renal tissue and delay disease progression, ultimately delaying the need for dialysis and kidney transplantation.

Genfit Eyes US IPO; Taiwan Liposome, Tiziana Take The Plunge

Not to be outdone by biopharma firms raising venture capital, Euronext-traded Genfit SA said on Nov. 19 that it confidentially filed paperwork with the US Securities and Exchange Commission (SEC) to support an offering of American Depository Shares (ADSs) at some point in the future. The IPO will be accompanied by a concurrent private placement of ordinary shares outside of the US.

Lille, France-based Genfit is developing drug candidates and diagnostics for the treatment of liver diseases, including liver diseases with a metabolic origin, and hepatobiliary disease and may be cashing in on investor interest in non-alcoholic steatohepatitis (NASH) by pursuing a US IPO. Genfit reported mid-stage data for its lead drug candidate elafibranor in NASH in December 2016 and is now testing the PPAR alpha/delta agonist in Phase III. (Also see "Genfit May Be Gaining An Edge In NASH Race" - Scrip, 26 Oct, 2017.)

Taiwan Liposome Co. Ltd. (TLC) has been testing the US IPO waters for a while with various pricing proposals and finally launched its offering on Nov. 21 with the sale of 3.75m ADSs at $5.80 each to gross $21.75m before the sale of shares to meet overallotments; each ADS is the equivalent of two ordinary shares.

The Taipei-based developer of nanomedicines for pain management, eye diseases and cancer proposed an offering price of $7.46 per ADS back in April to raise up to $35m, but originally sought up to $50m. (Also see "IPO Update: Returns Halved As Two Biopharmas Go Public In April; Unity Is May's First" - Scrip, 2 May, 2018.) The final price apparently was reasonable to investors, however, since its stock closed flat at $5.80 on Nov. 21.

Tiziana Life Sciences PLC in London took the plunge a few days before TLC offering 442,190 ADSs at $9.90 each to gross $5.79m on Nov. 19; each ADS is equivalent to 10 ordinary shares. The company sold less than half as many ADSs as it proposed earlier in the month when it floated the potential sales of 1.01m ADSs at $9.90. (Also see "Finance Watch: Rough US Stock Market Doesn't Stop Biopharma IPOs As Six More Go Public" - Scrip, 31 Oct, 2018.) Its stock closed at $10.59 on Nov. 21.

Tiziana, which is developing drugs in the areas of immunology and oncology, also said it issued 2.14m ordinary shares to some of its debtors at a price of £0.60 each to extinguish $1.78m in debt. It also issued 607,500 shares to certain warrant holders at £0.75 each and 793,144 shares to certain other warrant holders at £0.80 each to gross $1.4m from the warrant conversions.

The company also raised $1.5m from an equity placing of 1.5m shares of its AIM-traded stock in London on Oct. 26. Combined, Tiziana has brought in $7.28m, which should fund its operations through the end of 2019.

Other recent public company financings include:

• Buena, NJ-based specialty generics manufacturer Teligent Inc. said on Nov. 13 that it secured a financing commitment for up to $120m from funds managed by Ares Management LP, which will provide senior-secured, asset-based first lien revolving credit facility and second lien term loans with principal amounts totaling $25m and $95m, respectively. The new debt primarily will replace or pay down old debts, including $80m that will be used to redeem December 2016 convertible bonds, but $15m will be set aside for a new high-speed filling line at Teligent's newly expanded sterile injectable manufacturing site in Buena. Other cash will fund new drug launches.

• Northwest Biotherapeutics Inc. in Bethesda, Md. said on Nov. 7 that it raised $5m from long-term angel investors via the sale of notes with a 10% interest rate and that mature in one year. Each note also entitled investors to half a warrant to purchase shares in the future at $0.35 each. The long-struggling cancer vaccine developer also said CEO Linda Powers agreed to further extend the terms of $5.4m worth of notes through which she provided debt to Northwest in February, March and April of this year. The company also granted warrants to Powers in exchange for the extensions.

Strategic Review Updates: Bioblast Chooses To Reverse Merge

Bioblast Pharma Ltd. will mostly give up on its portfolio of rare disease drugs and hand its nearly empty shell over to Enlivex Therapeutics Ltd. in a reverse merger. Tel Aviv-based Bioblast said on Nov. 19 that its recent strategic review found that this was the most likely scenario to provide value to its investors.

Privately-held Enlivex, which raised an $8m Series B round roughly a year ago, will merge into publicly-traded Bioblast and the new company will focus primarily on the Enlivex portfolio of allogeneic immune system-rebalancing therapies; its lead program is in mid- to late-stage development for graft-versus-host disease. (Also see "Venture Funding Deals: From ADC To Y-mAbs, Capital Flows For New Platforms, Novel Approaches" - Scrip, 10 Nov, 2017.) Jerusalem-based Elivex investors will hold 96% of the shares of the company going forward and its management team will run the merged entity.

However, Bioblast shareholders will receive a contingent value right for each share they own, which will entitle them to a payout should the new Enlivex realize any value from Bioblast's Trehalose clinical program. The asset is in mid-stage development for oculopharyngeal muscular dystrophy and spinocerebellar ataxia type 3.

In other recent strategic updates:

• Merrimack Pharmaceuticals Inc. said on Nov. 7 that the Cambridge, Mass.-based firm initiated a corporate restructuring and will cut its workforce by 60% so that its available cash – about $89.8m as of October – will last into the second half of 2022. Also, an external advisor has been hired to help the developer of drugs to treat biomarker-defined cancers assess its strategic alternatives. Merrimack will discontinue development of Phase II candidate MM-121 to focus on Phase I asset MM-310 and the preclinical programs MM-401 and MM-201. The company raised up to $25m in debt financing in July. (Also see "Finance Watch: Regulus Shrinks To Preserve Cash, Ironwood Cuts Jobs Ahead Of Split" - Scrip, 6 Jul, 2018.)

• South San Francisco-based Achaogen Inc. has a newly approved antibiotic – Zemdri (plazomicin) – but is not able to generate enough sales to fund its operations in the mid- to long-term, so it said on Nov. 5 that it has begun a strategic review to determine whether a sale of the company or some other arrangement is feasible. It also instituted a restructuring plan – on top of layoffs announced in July – to cut expenses by 35%-40%. (Also see "Finance Watch: Ascletis First Biotech To List Under New Hong Kong Rules, BeiGene Joins In" - Scrip, 3 Aug, 2018.)