In 2015, Abivax launched what was then Europe’s largest biotech initial public offering (IPO) when it raised €57.7 million (about $61 million) by offering its first openly traded shares on the Euronext Paris exchange.
Now, with a lead candidate making its way through Phase III trials, the Paris-based biotech says its best option for completing the funding of obefazimod’s lead program in ulcerative colitis (UC) and further funding its second program in Crohn’s disease was by going public again.
Abivax recent carried out a second IPO, selling 18,699,460 American depositary shares (ADSs) October 20 on the Nasdaq Global Market at $11.60, and an ex-U.S. private placement where it sold 1,626,040 in European shares at that day’s equivalent price in Euros (€10.9864) to specified investors.
The combined offering raised about $235.8 million in gross proceeds. That translates to about $212 million in net proceeds, Marc de Garidel, Abivax CEO and interim board chair, told GEN Edge.
Since the U.S. IPO, Abivax’s ADSs have fallen 16%, to $9.76 at the close of trading on Wednesday. Its shares in Paris have slipped 17.5%, to €9.06 ($9.61).
Why didn’t Abivax simply sell more of its European shares?
“If you want to raise, say, $100-plus million or $200 million, there’s only one way to go: it’s Nasdaq,” de Garidel said. Nasdaq’s 3,490 listed securities is more than quadruple the 800+ listings in Paris and nearly twice the approximately 1,900 listings across all Euronext markets. Euronext’s roughly €6.5 trillion ($6.8 trillion) in market capitalization (the product of the share price and the number of outstanding shares) is just over 30% of Nasdaq’s approximately $22 trillion in market cap.
“You have a depth of investors with bigger pockets in the U.S. You have also more expertise in the U.S.,” de Garidel said. “In the end, we see a gap in valuation between stocks that are in Paris or Europe overall versus Nasdaq. So, it was an easy decision to reach.”
Abivax’s U.S. IPO is the largest-ever IPO by a French-listed biotech on Nasdaq, and the first Nasdaq IPO of a European biotech since Valneva went public on the Nasdaq Global Select Market in May 2021.
The timing of the U.S. IPO was challenging, de Garidel acknowledged, as Nasdaq and other markets declined the day of Abivax’s offering (October 20) on investor fears that Israel’s “Operation Swords of Iron” war against Hamas may expand into a wider Mideast conflagration.
“We still thought that that in the end, it was going to be important to be well-funded for Phase III. And if we had not done this raise, the stock would have started to drift down, because investors would have said, ‘you are not funded for the big value creation event,” de Garidel explained.
Funding obefazimod
About three-quarters of the net proceeds—approximately €160 million (about $169 million) are being used to fund Phase III studies for obefazimod in its lead program in moderate to severe UC.
The global Phase III program, launched last year, is assessing the safety and efficacy of two dosages of obefazimod, 25 mg and 50 mg, in both patients who have either failed advanced therapies (AT) or are AT-naïve.
The program consists of two induction studies—ABTECT-1 (ABX464-105; NCT05507203) and ABTECT-2 (ABX464-106; NCT05507216), as well as a subsequent ABTECT maintenance trial (ABX464-107; NCT05535946). All three studies are randomized, double-blind, and placebo controlled, using independent, blinded review of videotaped endoscopies.
Patients from both induction studies who have demonstrated a clinical response of at least a 30% improvement in symptoms have been enrolled in the maintenance study.
At the recent United European Gastroenterology (UEG) Week meeting, held in Copenhagen, Abivax researchers presented positive long-term efficacy data from a 96-week analysis of an open-label maintenance Phase IIb trial (NCT04023396).
The trial was divided into two studies. Of the 222 patients who completed the induction study, 217 were enrolled in the maintenance study, where they received a once-daily, oral 50-mg dose of obefazimod. At week 96, the overall clinical remission rate was 52.5%. About 59% of patients showed endoscopic improvement, while 35.9% showed endoscopic remission of UC.
Among 168 patients for whom no clinical remission was reported after week 16 of the induction, nearly half (81 or 48.2%) achieved de novo clinical remission at week 96 of the maintenance study. Among the 49 patients who showed clinical remission after induction, 33 (67.3%) maintained their remission at week 96.
“There were more than 600 gastroenterologists who attended the session. As a result, people could not get in,” de Garidel recalled. “This is the first time in the history of the company that we have had such interest.”
That interest, he said, resulted from the data showing that obefazimod could address all three qualities that gastroenterologists surveyed by the company in August said they were seeking in a UC treatment—something that was simple to take, safe, and showed durable efficacy.
“A long way to go”
“There’s a long way to go. There is a lot to do. But we are very, very excited about it,” de Garidel said.
Abivax’s Phase III program for obefazimod is evaluating more than 1,200 UC patients ages 16 and over at 600 study sites in 36 countries, 612 patients per induction study. In both induction studies, patients will be treated for eight weeks. The first patient in the United States was dosed with obefazimod in October 2022.
Topline results are expected in the first quarter of 2025 for the induction studies, and in the first quarter of 2026 for the maintenance study. Based on the induction study results, Abivax will decide whether to pursue a combination therapy for obefazimod in moderately to severely active ulcerative colitis.
Abivax also plans to spend approximately €14.0 million ($14.8 million) of its U.S. IPO proceeds toward advancing its Crohn’s disease program for obefazimod. Abivax plans to file an IND application later this quarter for a Phase IIa induction trial whose topline results are expected in the second quarter of 2025. The company plans to launch that trial in the first quarter of 2024.
Also in 2024, Abivax plans to declare an additional inflammatory indication for which it will pursue a proof-of-concept study for obefazimod.
The remainder of Abivax’s U.S. IPO proceeds have been designated for working capital and other general corporate purposes, including research to identify new compounds and payment of existing debt agreements.
Obefazimod is designed to upregulate miR-124, an anti-inflammatory microRNA. Obefazimod enhances the selective splicing of a single long noncoding RNA to generate miR-124, which downregulates cytokines and chemokines shown to promote inflammation, including tumor necrosis factor (TNF) alpha, IL-6, monocyte chemoattractant protein-1 (MCP-1) and IL-17, as well as Th17+ cells.
Under its former name ABX464, obefazimod was initially developed to treat HIV but was repurposed to fight inflammatory conditions based on its anti-inflammatory effect.
Obefazimod’s anti-inflammatory effect is believed to be triggered when the molecule binds to its target, the cap binding complex located on the 5′ end of every cellular noncoding RNA molecule. The binding results in the splicing of a long, noncoding RNA that induces the overexpression of miR-124, which launches a cascade that is believed to propagate the drug’s anti-inflammatory effect.
Competitive landscape
If approved, obefazimod will join an increasingly crowded competitive landscape that has seen two new UC drugs approved by the FDA in October alone.
Abivax envisions obefazimod as a first-line treatment for UC and Crohn’s disease after failure of conventional treatments. That’s a sweet spot now occupied by several tumor necrosis factor alpha (TNF-α) inhibitors, of which the best-selling drug is AbbVie’s multi-indication blockbuster Humira®(adalimumab).
Humira generated $11.1 billion in Q1–Q3 2023, down 29% from $15.658 billion a year ago, due to competition from lower cost biosimilars that started this year, though its patent protection doesn’t end until 2034.
Additional biologics with UC indications include another TNF inhibitor, Remicade® (infliximab), marketed by Johnson & Johnson’s Janssen Biotech; another J&J (Janssen Immunology) drug, the human interleukin-12 and -23 antagonist Stelara® (ustekinumab); and Entyvio® (vedolizumab), an integrin receptor antagonist marketed by Millennium: The Takeda Oncology Company.
Stelara racked up $8.105 billion in Q1–Q3 2023, up 7.9% from $7.336 billion a year ago; and Remicade, $1.41 billion, down 24.5% from $1.868 billion.
Entyvio—Takeda’s biggest-selling product—generated ¥702.7 ($4.715 billion) in sales in Takeda’s last full fiscal year, which ended March 31, 2023, up from ¥521.8 billion ($3.501 billion) a year earlier. Since then, Entyvio has racked up ¥391.7 billion ($2.628 billion) in the first half of the company’s current fiscal year, up 13% from ¥346.6 billion ($2.326 billion) in April–September 2022.
Entyvio’s sales are expected to soar even higher in the second half of Takeda’s fiscal year, since in September the FDA approved a subcutaneous administration of Entyvio for maintenance therapy in adults with moderately to severely active UC after induction therapy with intravenous Entyvio.
Pfizer, Lilly gain UC approvals
Two new drugs with UC indications have gained approval in October alone. The newest is Eli Lilly’s Omvoh™ (mirikizumab-mrkz), the first interleukin-23p19 antagonist indicated to treat adults with moderately to severely active ulcerative colitis.
Omvoh was approved based on Phase III data from a 12-week induction study (UC-1; NCT03518086) and a 40-week maintenance study (UC-2; NCT03524092). After 12 weeks of treatment with Omvoh, 65% of patients achieved clinical response while 24% achieved clinical remission compared to the 43% and 15%, respectively, randomized to placebo.
Omvoh may soon be joined by another new UC drug. The FDA and European Medicines Agency are reviewing AbbVie’s applications, submitted in August, to add UC to Skyrizi® (risankizumab)’s approved indications in moderate to severe plaque psoriasis, active psoriatic arthritis, and moderate to severe Crohn’s disease.
AbbVie has projected additional sales of $2.5 billion for Skyrizi in UC and Crohn’s combined by 2025. The drug made $5.369 billion in net revenues in Q1–Q3 2023, up nearly 50% from $3.589 billion a year earlier.
Obefazimod would also compete with an existing AbbVie UC drug, the Janus kinase (JAK) inhibitor Rinvoq® (upadacitinib), as well as other JAK inhibitors, Pfizer’s Xeljanz® and extended-release version Xeljanz® XR (tofacitinib); and Bristol Myers Squibb (BMS)’s sphingosine 1-phosphate (S1P) receptor modulator Zeposia® (ozanimod).
Zeposia has generated $123 million in the first nine months of this year—up 78% from $69 million in Q1–Q3 2022, but a long way from the $3 billion that BMS has projected it would rack up globally from the drug by 2030.
Besides meeting sales expectations, Zeposia faces another challenge: Head-on competition from Pfizer, which on October 13 gained FDA approval for another S1P receptor modulator, Velsipity® (etrasimod), an oral, once-daily treatment indicated for adults with moderate to severe active ulcerative colitis.
Velsipity was the lead candidate of Arena Pharmaceuticals, which Pfizer acquired for $6.7 billion in a deal completed in March 2022. Last year, Pfizer projected between $1 billion and $2 billion in annual revenues for Velsipity.
During the first three quarters of 2023, Rinvoq generates $2.714 billion, up 55% from $1.752 billion in Q1-Q3 2022. Xeljanz, $1.21 billion, down 7% from $1.304 billion in Q1–Q3 2023.
Other drugs indicated for UC or inflammatory bowel disease (IBD) include anti-inflammatory treatments such as 5-aminosalicylates and corticosteroids; immune system suppressants such as Azathioprine (Azasan, Imuran) and mercaptopurine (Purinethol, Purixan); and Cyclosporine (Gengraf, Neoral, Sandimmune).
Expanding U.S. operations
de Garidel said Abivax has taken early steps toward prioritizing U.S. commercialization. Abivax is expanding its Stateside operations and plans by year’s end to announce the creation of a U.S. hub in Greater Boston. Up to 20 people would be based at that hub, de Garidel said.
“The staff that would be there are people that live around Boston,” de Garidel said. “This is going to be for people who live on the East Coast, or even people coming from France especially on the clinical side. We would use it also as a facility to get people together for meetings in the U.S.”
Abivax has nearly doubled its staff from 40 in May, when de Garidel’s appointment as CEO took effect, to about 70 today. Staff additions in recent months have included senior executives such as Ida Hatoum as chief people officer, Patrick Malloy as senior VP, investor relations, and Chris Rabbat as VP and head of medical affairs.
“We didn’t have any house statistician. We didn’t have a data manager. We didn’t have a quality person. We didn’t have a pharmacogenetics person–some of the basic positions that, when you are in Phase III, you don’t always want to delegate,” said de Garidel, who succeeded founding CEO Hartmut J. Ehrlich, MD.
He added that Abivax will continue to use CRO services from IQVIA, with which he said his company is satisfied.
“We just have a few hires to do, but mostly I think we are where we should be,” de Garidel said.
Alex Philippidis is Senior Business Editor of GEN.
