Novavax Inc. said it plans to raise $100 million to advance its pipeline of vaccines for flu, respiratory syncytial virus (RSV) and other viruses as the company prepares to test its most advanced programs in phase II trials.
The Gaithersburg, Md.-based company, which is developing recombinant nanoparticle vaccines and adjuvants, is selling 25 million shares at $4 each in the public offering, for net proceeds of about $94 million after deducting the underwriting discount. Novavax granted its joint underwriters, Citigroup and JP Morgan, a 30 day option to purchase up to $15 million in additional shares.
The financing follows on Novavax's last trip to the public market in September 2013. The company raised about $82.6 million then. (See BioWorld Today, Sept. 25, 2013.)
Novavax's stock (NASDAQ:NVAX) closed Friday at $4.16, down 36 cents, or about 8 percent.
As of March 31, the company reported having nearly $110 million in cash. But it may soon need additional funds as it prepares to ramp up spending on new studies of its RSV F-protein vaccine candidate in maternal, pediatric and elderly immunization, as well as labor costs it said.
In April, Novavax reported top-line data from a phase II study of the RSV F protein nanoparticle vaccine candidate in 720 women of childbearing age. The randomized, blinded, placebo-controlled experiment, which tested immunogenicity in multiple formulations, found the vaccine to be to be well-tolerated with no vaccine-related serious adverse events. In addition, we reported that the highest immune responses, as measured by RSV F and palivizumab-like antibody levels, were achieved in a single dose formulation, which also demonstrated rapid and sustainable increases in those antibody levels. Novavax expects that data and data from other trials of the vaccine to support advancement of its maternal immunization program in pregnant women, which it plans to explore in another phase II trial slated to begin in the fourth quarter.
Despite its growing expenses, unlike many biotech companies, Novavax has a steady stream of revenue. It brought in $20.9 million in 2013 and $22.1 million in 2012. Most of that comes from contracts with the U.S. government and R&D collaborators. The company recognized revenue of about $5.3 million during the first quarter of 2014 from its $97 million contract with the U.S. Department of Health and Human Services' Biomedical Advanced Research and Development Authority (BARDA).
The BARDA revenue supports Novavax's ongoing clinical development and product scale-up of its multivalent seasonal and monovalent pandemic influenza vaccine candidates. Although BARDA originally directed the company to develop a vaccine against the H5N1 avian flu strain, more recently it asked the company to work on the H7N9 bird flu.
The company said in its offering prospectus that it expects to begin a phase II trial testing the H7N9 flu vaccine in the fourth quarter and has already begun preliminary manufacturing work.
Piper Jaffray & Co. is acting as lead manager. FBR & Co. and Ladenburg Thalmann & Co. Inc. are serving as co-managers.
Novavax did not respond to a request for comment.