Riding high on the gene therapy wave, Bluebird Bio Inc. will more than replace its spend on last month's acquisition of Pregenen Inc. by way of selling 3 million shares of stock at $34 each for net proceeds of about $95.6 million.
In a deal set to close next week, Bluebird, of Cambridge, Mass., has granted underwriters a 30-day option to purchase from it up to 450,000 more shares. The firm's stock (NASDAQ:BLUE) ended Wednesday at $33.94, down 41 cents.
Bluebird's takeover of Seattle-based Pregenen (a shortened form of "Precision Genome Engineering") brought aboard gene-editing and cell signaling technologies. Under the terms, the company issued former stakeholders of Pregenen 408,667 shares of Bluebird common stock at closing, and paid or assumed about $4.9 million of liabilities.
The former owners of Pregenen shares also are eligible for as much as $15 million in cash related to preclinical milestones, $20 million for reaching clinical goals and almost $100 million if commercial targets are reached by products deploying Pregenen's technology.
That technology includes homing endonucleases (HEs) and megaendonuclease/TALEN (MegaTALs). The former are proteins that bind to DNA sequence-specifically, cleaving the targeted sites. They work on DNA sequences greater than 20 base pairs, and may help edit or replace defective genes through normal repair mechanisms. MegaTALs are fusion proteins that combine HEs with the targeting domain of transcription activator-like effector nucleases (TALENs).
The benefit of acquiring Pregenen "should be most apparent (at least initially) in improving the functionality of T cells for [Bluebird's] chimeric antigen receptor-modified T cell (CAR-T) therapy," wrote Piper Jaffray analyst Joshua Schimmer in a research report. "Beyond CAR-T, Hes and MegaTALs can be expanded into future targets and indications as well as expansion into in vivo administration with viral and nonviral vectors." Schimmer maintains an "overweight" rating on the stock, foreseeing a price of $58.
Bluebird will use the proceeds of the latest financing to push studies in childhood cerebral adrenoleukodystrophy and sickle cell disease, as well as beta-thalassemia major, in which the firm reported encouraging phase I/II trial data last month. (See BioWorld Today, June 17, 2014.)
Data were shared from two subjects in the HGB-205 clinical study of Lentiglobin BB305. Both had the hemoglobin-hampering disorder and both with the beta E/beta 0 genotype. At 4.5 months following autologous transplant, one showed total hemoglobin of 10.1 g/dL, of which 6.6 g/dL was therapeutic betaAT87Q-globin 9, and at two months the second post-transplant patient showed total hemoglobin of 11.6 g/dL, of which 4.2 g/dL was betaAT87Q-globin. Lentiglobin was well tolerated. The pair got their last blood transfusions on days 10 and 12, respectively, post-transplant, and both subjects remain blood transfusion-independent. That study is based in Paris. Another trial, called HGB-204, is under way at multiple centers in the U.S.
BofA Merrill Lynch, Cowen and Co., and Citigroup are acting as joint book-running managers of the offering, with Wedbush Pacgrow Life Sciences and Suntrust Robinson Humphrey serving as co-managers.
In other financing news:
Argen-X BV, of Breda, the Netherlands, completed its initial public offering begun in June. The offering was priced at €8.50 (US$11.50) per share. The company will issue about 4.7 million new shares, equivalent to €40 million. An option to subscribe to up to 470,589 additional new shares at the offer price, equivalent to €4 million, has been granted to cover overallotments or short positions, if any. If the overallotment option is exercised in full, the total amount of the capital increase will amount to €44 million. Shares will be listed on Euronext Brussels and begin trading on an "if-and-when-issued-or-delivered" basis on July 10, 2014, under the symbol ARGX.
Globeimmune Inc., of Louisville, Colo., closed its initial public offering (IPO) of about 1.7 million shares at $10 each, including 225,000 shares of common stock sold pursuant to the full exercise of the underwriter's overallotment option. The gross proceeds to Globeimmune from the IPO were about $17.2 million. (See BioWorld Today, March 18, 2014.)
Mabvax Therapeutics Inc., of San Diego, closed a $3 million common stock financing. The company entered a securities purchase agreement with accredited investors for the sale of $3 million in a private placement of common stock of Mabvax, which was completed prior to the closing of the merger with Telik Inc., of Palo Alto, Calif. Investors paid $2.59 per share of Mabvax common stock and will receive approximately 2.23 shares of Telik common stock for each share of Mabvax common stock following consummation of the merger, which was disclosed separately. H.C. Wainwright & Co. LLC, Palladium Capital Advisors LLC and Dawson James Securities assisted as placement agents in the transaction. (See BioWorld Today, May 13, 2014.)
Ultragenyx Pharmaceutical Inc., of Novato, Calif., priced its underwritten public offering of about 2 million shares of common stock at a price to the public of $40 per share. Ultragenyx is selling about 1.3 million shares in the offering, with certain stockholders vending 706,072 shares. Ultragenyx will not receive any proceeds from the sale of any shares sold by the selling stockholders. The company has granted the underwriters of the offering an option for a period of 30 days to purchase up to an aggregate of an additional 302,602 shares of the company's common stock at the public offering price, less the underwriting discount. Shares of Ultragenyx (NASDAQ:RARE) closed Wednesday at $40, down $1.40.