BioWorld International Correspondent
Providing more evidence that monoclonal antibody therapies are hot - and solidifying its position as one of Europe's most cash-rich biotechnology companies - Genmab A/S took in DKK735 million (US$119.5 million) in a private placement of 5 million shares, priced at DKK147 per share, with selected international institutional investors.
Total gross proceeds rose to DKK845.2 million, as underwriters Merrill Lynch, of New York; ABN AMRO Rothschild, of Amsterdam, the Netherlands; and the Copenhagen, Denmark-based office of Alfred Berg SE exercised an overallotment option of 750,000 shares.
The subscription price coincided with the company's closing share price on Jan. 11.
Company officials were not available for comment due to a quiet period, but the deal will give Genmab a firm hand in partner negotiations and enable them to push for co-promotion rights for certain products.
"They can't be held to ransom by partners," Sally Bennett, director of biotechnology research at ING's London office, told BioWorld International.
"It was slightly opportunistic. They still have about $200 million on the balance sheet. It was somewhat earlier than we were expecting, but it was widely anticipated that they may raise cash at some point," she said.
Annette Rye Larsen, analyst at HSH Gudme in Copenhagen, also said the cash will strengthen the company's position in partner negotiations, but is worried the additional independence it brings could slow down their rate of deal-making, as the company does not need any additional cash at present.
Genmab has two monoclonal antibody drug candidates in clinical development that are not yet partnered. HuMax-EGFr, in development for head and neck cancer, gained FDA fast-track status earlier this month for patients who have failed standard therapies.
HuMax-CD20 is undergoing Phase I/II trials in both non-Hodgkin's lymphoma (NHL) and chronic lymphocytic leukemia, and a Phase II trial in rheumatoid arthritis.
The latter program, in particular, is in need of a partner, Bennett said, adding that "we believe they need to partner for marketing. Rituxan will be a very tough incumbent to challenge."
Despite Genmab's newly swelled cash reserves of around $235 million, Bennett ruled out any potential acquisitions.
"They have a broad pipeline and multiple pivotal studies to plan," she said.