After reporting 18-month results from a phase 3 trial evaluating the drug Zimura in geographic atrophy on June 15, Iveric Bio (NASDAQ:ISEE) is tapping investors for more cash, increasing the likelihood its cash stockpile can last it through Zimura's clinical-stage development.
In an update last week, Iveric Bio announced that Zimura's use reduced the progression of GA versus placebo. At the 18-month mark, patients receiving the 2 mg dose of Zimura had a 28% relative benefit when compared to the control arm of the study.
To confirm results from this trial, the biotech company expects to begin enrolling patients in a second phase 3 study this month. If this new trial also shows a benefit versus placebo after 12 months, management intends to file for Food and Drug Administration (FDA) approval. Since this trial will enroll hundreds of patients, management announced plans to raise $50 million yesterday via a stock offering. Today Iveric Bio announced a much larger offering that could generate gross proceeds of $143.9 million if everything goes according to plan.
Specifically, Iveric Bio has priced 24,535,720 common shares at $4.10 per share, and for certain investors it's also offering prefunded warrants to purchase 1,914,280 shares at $4.099 per share. Additionally, it's selling 8,649,453 shares to affiliates of Vivo Capital and Samsara BioCapital at $4.10 per share in a private placement. Brokers can also buy 3,967,500 shares to cover overallotments associated with the public offering, if necessary.
Management didn't say how much it will net from these deals after fees, but the gross proceeds suggest the company is significantly extending its cash runway. Previously, Iveric Bio said the $108.4 million in cash and equivalents on its balance sheet at the end of March was enough to last it into early 2022.
Geographic atrophy can lead to blindness, and currently there aren't any drugs on the market that specifically target this condition. Iveric Bio estimates its target market is 159,000 patients per year in the U.S. and up to 5 million patients globally, so Zimura could generate significant sales if this upcoming study pans out. Although there's no guarantee of success, the fact that it was able to upsize its offering suggests investors are optimistic.