Disc Medicine scores US$250m as lead drug nears FDA approval
After winning a key regulatory hurdle for its lead drug, Disc Medicine raised an upsized US$250m late Monday from a marketed follow-on offering that also saw its largest shareholder cash out a US$25m stake.
Jefferies, Leerink Partners, Morgan Stanley and Cantor priced the 3m shares at US$84.00, a 6.6% file-to-offer discount to the US$89.94 pre-launch price. 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 for one day Monday.
The blood disease biotech's shares were trading midday Tuesday at US$86.02m, down 1.3% on the day but well above offer. On Friday, the stock soared 21% to US$89.94 after the FDA awarded Disc a priority voucher on its treatment for a rare blood disease.
Disc, which sold a 7.2% stake of itself on the offering, is adding to the US$615.9m of cash it had in place as of September 30. That was 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.
High priority
The FDA introduced the national priority voucher program in June 2025 to expedite approval of drugs deemed US national health priorities. The voucher reduces the timeline for review to one to two months, versus the six to 10-month timeline that's typical.
Bitopertin, the drug the FDA awarded the voucher, treats erythropoietic protoporphyria (EPP) and X-linked protoporphyria (XLP), 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 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 hematologic 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 program 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 line 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 anemia and sickle cell disease. The biotech is returning to the market after raising US$243.4m from a follow-on in January at US$55.00.