Disc Medicine scores US$250m
After winning a key regulatory hurdle for its lead drug, Disc Medicine raised an upsized US$250m on Monday from a follow-on that also saw its largest shareholder cash out US$25m.
Jefferies, Leerink Partners, Morgan Stanley and Cantor priced the 3m shares at US$84, a 6.6% file-to-offer discount to the US$89.94 close on October 17. Disc sold roughly 2.7m shares and Access Industries the remaining 300,000 shares.
The banks were able to upsize the combined offering from the US$220m marketed on Monday. The primary sale represented a 7.2% capital increase.
The blood disease biotech's shares were by Friday afternoon trading a little above offer at US$84.76.
The previous week had seen the FDA award Disc a priority voucher on its treatment for a rare blood disease, prompting shares to jump 21% on October 17.
Disc is adding to the US$615.9m of cash it had in place as of September 30. That was already enough to fund development into 2029, the biotech revealed at launch.
Access, the privately held investment conglomerate controlled by billionaire Len Blavatnik, reduced its stake in Disc to 7.2% from 10.2%. The firm inherited that stake when it sold a business to Disc in 2022.
The FDA introduced the national priority voucher programme in June to expedite approval of drugs deemed US national health priorities. The voucher reduces the timeline for review to one to two months, versus the 6–10 months that is typical.
Bitopertin, the drug to which the FDA awarded the voucher, treats erythropoietic protoporphyria and X-linked protoporphyria, rare genetic blood diseases that cause light sensitivity and lead to increased risks of liver disease. After completing a Phase III trial on bitopertin, Disc filed a new drug application with the FDA in September.
“Current management [of EPP] is limited to extreme sunlight avoidance and pain control,” wrote Morgan Stanley analysts in a note to clients last Friday. “Bitopertin could become the first disease-modifying therapy for EPP, addressing a significant unmet need and establishing Disc as a leader in rare haematologic diseases.”
The Morgan Stanley analysts estimate peak sales of the drug at more than US$1bn in 2035, which they say could prove conservative.
The FDA priority voucher programme has proven to be a key catalyst for biotech financing. In addition to potential expedited regulatory approval, the vouchers can be sold to other drug developers, allowing them to jump the queue to get the FDA to review their drugs.
In June, Danish drug developer Bavarian Nordic secured US$160m from the sale of a priority voucher for a vaccine to treat chikungunya, a mosquito-borne tropical disease.
In addition to its EPP/XLP treatment, Disc has two other drugs in Phase I development targeting anaemia and sickle cell disease. The biotech is returning to the market after raising US$243.4m from a follow-on in January at US$55.