MBX secures US$200m from marketed follow-on
MBX Biosciences took advantage of the renewed bid for weight loss drug developers by taking two full days to market a follow-on stock sale, giving investors time to absorb a spike in its shares in connection with Pfizer’s up to US$7.3bn purchase of Metsera.
The mid-stage biotech went public in September last year, so as an unseasoned company is required to undertake two days of marketing though it is approaching the anniversary that would allow for immediate effectiveness and expedited execution.
“The SEC considers recent IPOs as WKSI eligible on the first Friday of the month following the one-year anniversary of the IPO,” explained a banker involved in MBX’s offering. That means MBX will become a well-known seasoned issuer in early October.
JP Morgan, Jefferies, TD Cowen and Guggenheim Securities priced 11.1m shares late on Wednesday at US18. To hit a US$200m proceeds target, the banks increased the size of the offering from 10m shares to account for the 10% discount to the US$20.01 closing price.
MBX shares slipped 13.8% to US$17.33 on Thursday, but still above the US$16 IPO price last year.
On Monday, MBX shares doubled to US$20 on volume of 28m shares, clearing its way to return to the equity market for the first time.
Ahead of the deal launch, the biotech released Phase II trial results for its lead drug, a long-acting hormone replacement therapy for patients with chronic hypothyroidism, a disease that causes painful calcium deposits.
A Phase III trial on the hypothyroidism drug is planned for next year.
The Phase II results have positive readthrough’s into MBX’s other drugs, which are long-acting formulations of GLP-1 weight-loss drugs, making it a competitor to Pfizer/Metsera.
MBX plans to launch a Phase II trial of its lead GLP-1 later this year in patients whose blood sugar declines to dangerous levels after bariatric weight-loss surgery.
A Phase I trial for a second long-acting GLP-1 as a weight loss drug is planned with results expected in 2027. MBX now has US$412m of cash, extending its financial runway into the beginning of 2029.