A bumper crop of biopharma financings, highlighted by fresh fundraising at Tmunity Therapeutics Inc., Biocancell Ltd. and Ultragenyx Pharmaceutical Inc., and recently closed offerings at Beigene Ltd., Avexis Inc. and Arrowhead Pharmaceuticals Inc., highlight a strong start for the sector in 2018. Already, the total raised in public offerings and by private biotechs in January has significantly outstripped investments during the same period last year, a BioWorld analysis shows, while at least nine companies have filed and pending IPOs.

Sixteen public offerings and one overallotment have rolled out so far in January, aimed at raising a collective $2.59 billion. By comparison, January 2017 included just seven public offerings, raising about $1.34 billion. Without doubt, some outliers have tipped the scales, with Beigene's $800 million follow-on leading the way. But additional raises, such as a $475 million follow-on for Agios Pharmaceuticals Inc. and a $459 million raise at Avexis suggest that the year started with plenty of capital ready to be deployed in the markets.

Alex Castelli, a CPA and managing partner of emerging markets at Cohnreznick LLP, told BioWorld that a combination of factors are at play. Investor confidence, market strength and a ready supply of private capital have all contributed to a strong start for the year, he said. Optimism over tax reforms, lower corporate tax rates and the overall strong performance of equity markets are also likely at play, he added. "When you have this kind of momentum in January, it's a good sign for 2018," he said.

Multiple companies are lining up to take advantage of the year's so-far positive reception. Chief among the announced but yet-to-close offerings on tap in the month's waning days is Ultragenyx's $175 million follow-on. The Novato, Calif.-based rare disease specialist is seeking up to $175 million to fund commercialization of its mucopolysaccharidosis type VII therapy and X-linked hypophosphatemia therapies – Mepsevii (vestronidase alfa-vjbk) and burosumab, respectively – as well as development of clinical and early stage assets, including gene therapies, it said. J.P. Morgan Securities LLC, BofA Merrill Lynch, Goldman Sachs & Co. LLC and Cowen are acting as joint book-running managers for the offering. They're eligible to purchase up to about $26.3 million worth of additional shares (NASDAQ:RARE).

Another company joining the party is Biocancell, a Jerusalem-based venture looking to raise up to $25 million to fund the company's initiation of its clinical trials of BC-819 in early stage bladder cancer, and other operational needs. Though already public on the Tel-Aviv Stock Exchange (TASE:BICL), the company said it is planning yet another public offering on a U.S. stock exchange later this year. The current offering is priced at NIS1.60 (US46 cents) per share and follows a failed tender offer led late last year by the company's largest shareholder, Clal Biotechnology Industries Ltd.

With a smaller dollar goal, but big ambitions, Waltham, Mass.-based Histogenics Corp. is also tapping public enthusiasm for life sciences companies, pricing an underwritten registered direct offering of about 2.3 million shares (NASDAQ:HSGX) at $2.35 per share. The company said it would devote proceeds from the offering to working capital and general corporate purposes. Canaccord Genuity is acting as the sole book-running manager for the offering.

Another cancer-focused contender seeking new investment is Stemline Therapeutics Inc., of New York. It had yet to price its proposed offering of up to 3.7 million shares by BioWorld's publication deadline, but did share its plan for deploying whatever it raised: Net proceeds from the offering are slated to support clinical, regulatory, manufacturing and potential commercialization of its blastic plasmacytoid dendritic cell neoplasm treatment, SL-401. Additional funds would be directed toward clinical development of SL-801, a potential therapy for solid and hematologic cancers, and SL-701, an immunotherapy currently in testing in combination with an immunostimulant and bevacizumab as a possible treatment for glioblastoma multiforme. (See BioWorld, Nov. 1, 2017.)

Rounding out the latest crop of follow-on news, Arrowhead Pharmaceuticals Inc. closed its underwritten public offering with gross proceeds of $60.4 million. Jefferies LLC and Barclays Capital Inc. acted as book-running managers.

Private party

Lest it seem public companies have had all the fun so far this January, private biotechs have also reaped the rewards of investor attention, already landing more money this month than in all of January 2017 with a roughly even number of investments. To date, 30 private ventures have drawn a total of about $1.3 billion, according to BioWorld data vs. a total haul of about $887 from 32 private investments in January 2017.

On Tuesday, three companies made the latest contributions to the month's private financing total: neurotoxin specialist Bonti Inc., RNA expression-focused Skyhawk Therapeutics Inc., and the cryopreservation crew at Vitricell SA.

Newport Beach, Calif.-based Bonti closed a $15.5 million series C financing, bringing the cumulative investment in the company to more than $36 million, it said. City Hill Ventures LLC led the round. Capital from the round will be used to continue development of EB-001, a botulinum neurotoxin, for its targeted therapeutic and aesthetic indications. In particular, the company said it expects the latest round will allow it to complete an ongoing first phase II pain study, LANTERN-1 (Long-Acting NeuroToxin-E Relief, Non-opioid), and to initiate and complete a second phase II pain study, LANTERN-2, as it prepares for an end-of-phase II meeting with the FDA. Recall that another botulinum-focused company, Evolus Inc., is preparing for a $75 million IPO. (See BioWorld, Jan. 11, 2018.)

Across the country, in Waltham, Mass., is Skyhawk, a new private company focused on the discovery and development of small-molecule therapeutics that correct RNA expression. The company said Tuesday that it landed $8 million in seed funding led by major family and biotech investors, including Tim Disney, the Duke of Bedford, Alexandria Venture Investments and other undisclosed private investors. Proceeds of the financing are expected to advance small molecules that initially target RNA exon skipping for both broad-based neurological conditions and previously "undruggable" oncogenes in cancer.

Though not officially part of January 2018's total, Vitricell added to the parade of private financings, too, on Tuesday as it announced the late 2017 closing of a series A round, totaling at more than €1 million (US$1.2M). The financing consisted of equity capital of €712,000 from a group of investors including Spinventure SA, Gesval, private individuals, and members of the Be Angels network, it said. The Liège, Belgium, company said the funds will enable it to launch the first products based on aseptic vitrification, a new cell cryopreservation method.

Debt and other financings

As a reminder that diverse forms of financing remain in rude health, activity this January has also shown initial strength in other forms of financing, with debt, private placements, royalty transactions and other mechanisms for company finance putting in a good showing. Categorized by BioWorld under the rubric of public/other financing, January 2018's investment total to date has already hit $797.6 million vs. last year's full-month total of $166 million.

The biggest contributor to the category so far in January has been a $200 million private placement of Sosei Group Corp. shares (TSE Mothers Index:4565). It brought in $200 million as part of a program intended to help rebalance the Tokyo-based company's shareholder base away from the current domestic and retail-heavy structure, and to attract specialist international biotech investors. But, not far behind was Morris Plains, N.J.-based Immunomedics Inc., which raised $175 million through the sale of tiered, sales-based royalty rights on global net sales of sacituzumab govitecan to Royalty Pharma. Royalty also purchased $75 million of Immunomedics' common stock (NASDAQ:IMMU). A sizable preferred stock (NASDAQ:ALDR) purchase agreement at Bothell, Wash.-based Alder Biopharmaceuticals Inc. also contributed to the total with an initial purchase by institutional investors of $100 million of class A stock in the company.

As the month drives toward its close, GT Biopharma Inc. added to the total with the announcement of a private placement of convertible notes and warrants for gross proceeds of about $7.1 million. The company intends to use the proceeds to advance its immuno-oncology and neurology programs and for general corporate purposes, it said. Oppenheimer & Co. Inc. acted as the sole placement agent for the offering. Separately, Berlin-based Noxxon Pharma NV joined in, issuing a fourth tranche of bonds to investor YA II PN Ltd., which has been steadily investing in the cancer-focused company since at least last summer.

Whether February will retain January's apparent strength is, as usual, unpredictable. But, in light of the momentum generated by current activity and the tremendous amount of cash likely to pass through M&A to investors keen to seek another jackpot in the year ahead, it seems likely that the next few months, if not the entire year ahead, will remain busy on the financing front.