French biotechnology firm Abivax SA completed an $800 million share sale Wednesday, driven by strong investor demand that pushed the company’s valuation to nearly $11 billion and reduced the urgency for the company to seek a buyout in the near future.
Abivax focuses on developing therapies for chronic inflammatory conditions, including ulcerative colitis and Crohn’s disease, and has long been considered a prime acquisition candidate for larger pharmaceutical companies looking to expand their inflammation and immunology portfolios.
The company’s primary drug in development, obefazimod, is currently undergoing late-stage Phase 3 clinical trials. According to a company statement, the funds raised are sufficient to support research and day-to-day operations through the second quarter of 2029.
While a future sale of the company has not been ruled out, the newly secured financing provides Abivax with greater strategic options and removes the kind of time-sensitive pressure that typically drives biotech acquisition negotiations, according to a source with knowledge of the situation.
The original offering was set at $600 million, but Abivax expanded it by one-third to $800 million after investor orders outpaced the available shares, the company announced.
CANCER CASES CREATED INVESTOR UNCERTAINTY
Abivax shares listed on the Nasdaq closed at $132.56 on Wednesday, recovering significantly after dropping as low as $72.50 last month. That earlier decline followed investor alarm over cancer cases that emerged during clinical trials.
When Abivax disclosed positive Phase 3 results for obefazimod on June 1, the good news was overshadowed by reports of seven malignancy cases among 195 patients who received the 50-milligram dose. The company stated that investigators determined those cases were unrelated to the treatment.
The safety concerns caused some pharmaceutical companies to hold off on any potential acquisition discussions while they waited for more data, according to two people close to the matter.
The decision to move forward with the capital raise came after the company held talks with potential buyers in mid-June, at a time when Abivax’s market value stood at roughly $7 billion, said a second source who asked not to be identified because the information is not public.
On Tuesday, Abivax released additional Phase 3 maintenance trial data that helped ease some of the worries that had been dragging down the stock earlier in June.
SHARES PRICED ABOVE MARKET AVERAGE
Abivax is selling 6.4 million American Depositary Shares, with each share representing one ordinary share, at a price of $125 each.
The offering was priced at a 2.39% premium above the stock’s three-day volume-weighted average price, a reflection of the strong demand from investors.
Underwriters have also been granted an option to purchase up to 960,000 additional shares, which equals 15% of the total deal. If fully exercised, that option could bring total proceeds to approximately $920 million.
Abivax said the money raised will be directed toward the potential commercialization of obefazimod in the United States, along with continued clinical development for ulcerative colitis and Crohn’s disease.
Leerink Partners, Morgan Stanley, Piper Sandler, and Guggenheim Securities are serving as joint bookrunners on the deal. Law firm Cooley also provided counsel to Abivax.
