Rights issue to give Biosergen first in-human efficacy data
Recently having closed a partnership deal with Alkem, Biosergen is advancing its antifungal drug candidate BSG005 through clinical studies. With Alkem later financing phase II and III studies, Biosergen is now carrying out a SEK 40.5 million rights issue to fund a first-in-patient safety and efficacy study in a patient group with no other treatment option.
Invasive fungal infections (IFIs) stand as a formidable challenge in global healthcare, characterised by their severe impact on morbidity and mortality alongside profound socioeconomic repercussions. These infections are systemic, and highly lethal, caused by the incursion of yeasts or moulds into deep-seated tissues.
The populations most at risk for IFIs encompass a broad spectrum of immunosuppressed patients. Those include organ transplant recipients, individuals undergoing hematologic treatments like stem cell transplantation, AIDS patients, some diabetics, cancer patients, those on prolonged immunosuppressive therapy, and persons with chronic respiratory diseases. These fragile groups are especially susceptible due to their compromised immune systems, which render them vulnerable to fungal invasions.
The global mortality rate of IFIs is alarming, with fungal diseases resulting in over 2.5 million deaths each year. Adding to this challenge is the emergence of multidrug-resistant (MDR) fungal pathogens, largely due to the extensive use of fungistatic agents over the past decades. This development, now acknowledged by the World Health Organization (WHO) as a global health threat, highlights the dire need for new innovative approaches to diagnosis, prevention, and treatment to mitigate the impact of these infections.
A vast unmet medical need
Currently, three primary types of antifungal treatments are available, out of which two only target a narrow spectrum of fungi. Existing drugs are also prone to inducing drug resistance as they merely inhibit fungal growth, not killing off the fungi. The widespread use of these antifungals in both medical and agricultural settings has significantly contributed to the global emergence of drug-resistant strains.
The third type is broad-spectrum antifungals that actually kill fungi, thereby reducing the risk of developing drug resistance. Despite their effectiveness, the use of these compounds is limited by their severe adverse effects.
Developing a safe and effective treatment
In a move to enhance the current treatment landscape, Swedish biotech Biosergen is developing BSG005 as a new antifungal drug, aiming to provide an effective treatment without serious side effects. Essentially, BSG005 belongs to the broad-spectrum category of anti-fungals, but has been genetically modified for improved safety. The beneficial safety profile has been validated in a phase Ia trial and the company is now looking to advance the project through clinical development.
Part of that development will be done in collaboration with Indian pharmaceutical company Alkem Laboratories, after signing a partnership deal in the fall of last year. The deal states that Alkem will finance and conduct the phase II and phase III trials necessary to reach regulatory approval in India. In return, Alkem receives full commercial rights in India, with Biosergen retaining the rights to commercialise BSG005 in the rest of the world.
Alkem’s investments in clinical development will be converted into Biosergen shares at a minimum share price of SEK 16, or at a 50 per cent premium of the share price at the dates of the conversions, if higher than SEK 16. The share conversions shall take place at completion of the specific clinical studies.
Rights issue to finance first-in-patient safety and efficacy study
To pave way for phase II, Biosergen will conduct a smaller first-in-patient safety and efficacy study in patients with resistance or intolerance to existing therapies. As these patients are some of the most difficult to treat, positive results would provide the company with a strong value proposition for the project. The study is set to start soon, with top-line results expected in the fourth quarter of 2024.
Biosergen is currently looking to raise initially SEK 40.5 million in a rights issue of units to finance the study and to cover the manufacturing of clinical trial material for the upcoming phase II and III studies. The rights issue is covered to approximately 65 per cent by subscription and underwriting commitments.
Summary of offering
| Conditions | Existing shareholders will receive one unit right for each one share owned. Three unit rights give the right to subscribe for one unit. One unit consists of eight newly issued shares and eight warrants of series TO3. |
| Subscription period | March 7 – March 21 2024 |
| Subscription price | The subscription price per unit is SEK 2.40, corresponding to SEK 0.30 per share. |
| Volume | SEK 40,5 million |
| Dilution | A fully subscribed rights issue entails a dilution corresponding to 72.7 per cent. Full exercise of attached series TO3 warrants may entail a further dilution of approximately 42.1 per cent. |
Information and subscription
 |
Subscription at Avanza |
This material has been created for marketing purposes and is not and shall not be deemed to constitute a prospectus under applicable laws and regulations. The complete terms and conditions of the rights issue and more information about the company have been presented in a prospectus that was published on biosergen.net March 5 2024.
Artikelns innehåll är sponsrat av det aktuella bolaget som förekommer i texten. BioStock tillhandahåller inte investeringsrådgivning, förmedlar inga investeringsorder och tar inget ansvar för agerande och/eller eventuell förlust eller skada av något slag som grundar sig på användandet av innehåll som publicerats på BioStock.se. Varje investeringsbeslut fattas istället självständigt av den enskilde investeraren.
