BioWorld International Correspondent

Investors reacted positively to a move by BioInvent International AB to strengthen its base of institutional shareholders by issuing new shares worth SEK125 million (US$17.8 million) to four Swedish institutions.

Despite the dilution implied by the move, the antibody developer's share price (OMX:BINV) had inched up to SEK15.50 by midday Tuesday, up from Monday's close of SEK14.95. The stock dropped back to SEK15.20 by late afternoon Tuesday.

Lund, Sweden-based BioInvent still has to obtain shareholder approval for the plan at an extraordinary general meeting July 5, but CEO and President Svein Mathisen told BioWorld International he "would be surprised" if the resolution did not pass. "We feel it's very important for a company like BioInvent to have a good institutional base," he said. "Our current institutional base is about 20 percent. We think that's a little bit weak." The benchmark for other Swedish biotechnology stocks is closer to 40 percent, he said, and if it completes the proposed transaction, about 35 percent of BioInvent's stock would be held by institutions.

The scale of the proposed share issue represents "an optimal balance," he said, between minimizing dilution of existing shareholders and bringing in additional institutional investors, which are likely to remain committed to the stock in the long term.

BioInvent is proposing to issue 8.5 million new shares, at SEK14.75 per share, which represents a small discount to the stock's closing price Monday, immediately before the plan was disclosed. The participating institutions are all Stockholm-based: Nordea Fonder, Tredje AP-fonden, Catella Healthcare and Handelsbanken Fonder.

BioInvent ended the last quarter with SEK173.7 million on its balance sheet. The company burned SEK100 million cash in 2006, but has not issued guidance for its spending in the current year. It will use the proceeds of the transaction to fund its portfolio of three development projects and to take a number of research projects into development. Its lead program, TB-402, an anti-Factor VIII antibody is undergoing a Phase I clinical trial in thrombosis. That program is part of a development alliance with Leuven, Belgium-based Thrombogenics NV. So, too, is the anti-angiogenesis antibody TB-403, in preclinical development as a cancer drug. That compound is due to enter the clinic later this year.

Also in development is BI-204, an antibody-based atherosclerosis treatment that targets oxidized low density lipoprotein, which is partnered with Genentech Inc., of South San Francisco. "We are on schedule to reach the clinic in the near future," Mathisen said. (See BioWorld Today, Jan. 16, 2007.)

The company also wants to move a cancer research program in the apoptosis field into preclinical development this year.