(News Bulletin 247) – The company provided an update on its operational and commercial activity on Thursday. The group has indicated that it wants to open an office in the United States and sign a production subcontracting contract. The title fell sharply over two sessions.

It is perhaps one of the most promising biotechs on the Parisian coast: Abivax. The biotechnology company based in Paris and Montpellier also displays a fairly substantial market capitalization for its sector, around 700 million euros.

The group’s main molecule is obefazimod (ABX464), an experimental drug that aims to treat ulcerative colitis, an inflammatory disease that affects the rectum and often the colon. This disease affects 1 million people in the United States and as many in Europe.

Potential “blockbuster”, obefazimod could generate revenues of more than 1 billion euros in very varied indications, explained last year to News Bulletin 247 Mohamed Kaabouni, analyst at the Portzamparc research office.

Nevertheless, the Abivax title lost 8.7% on Thursday and fell again this Friday by 4.4% around 2:30 p.m. (after having reached a low in the morning at -8.2%). Since January 1, the title still shows an increase of 168%.

This recent cold spell on the market is linked to a point of activity made by the company on Thursday. The company has indicated that it has cash of 118 million euros, a figure which should enable it to finance its operations until the second quarter of 2024.

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To an office in Boston

At the start of the year, the group raised 130 million euros from American and European investors. Abivax had then tied, in May, two structured financings for an amount of 150 million euros, notably via bonds convertible into shares with share subscription warrants (OCABSA). These latter instruments are generally accompanied by a strong dilution for the shareholders because the financial intermediary who subscribes to these securities then sells the shares obtained on the market.

Abivax can further extend its funding horizon into the fourth quarter of 2024 by raising €90 million accessible from existing debt financing agreements.

Beyond cash, the company has announced its development ambitions in the United States, by creating an office in the Boston region, a global biotech hub, at the end of the year. Abivax will also establish a “CMO” (contract manufacturing organization) in North America, a form of production outsourcing in the pharmaceutical industry. This CMO will complement the one already established in Europe and will thus allow a dual supply.

Soon on Wall Street?

For Invest Securities, it is these latest announcements in North America that have gripped the market.

“If nothing new has been announced on the R&D aspects, what probably explains the drop is the announcement of the establishment of a site in Boston in the United States. It is therefore the fear of significant costs associated with the constitution of an American team on site but above all the construction or purchase of a CMO (manufacturing site) which caused the price to react downwards”, explains the design office.

“Remember that the company already needs a significant amount still to be raised to carry out its phase III (that is to say the last stage of clinical trials before a potential marketing, Ed. ) in progress in ulcerative colitis, in fact, the addition of significant new costs for this US-oriented strategy should generate higher cash-outs than expected so far. medium term at relatively high levels and therefore a significant risk of dilution for shareholders”, continues the research department.

Abivax, like a lot of biotech, actually finds a lot of support from American investors to finance its development.

Evidenced by its announcement in early August: the company had submitted a draft registration document to the American stock market policeman (SEC) to issue ADS on Wall Street. These ADS (“American Depositary Shares”) are certificates of deposit that allow shareholders based in the United States to invest in foreign companies.

This financing lever has already been activated, again, by many French biotechs (Genfit, Cellectis, Biophytis, Innate Pharma, etc.)