Adverum Biotechnologies Announces $127.5 Million Private Placement Financing
- Private placement of common stock at a premium price
- Participation from new and existing investors including TCGX and large investment management firms
- Gross proceeds of approximately $127.5 million to fund current operating plan into late 2025
- None.
Insights
The private placement of Adverum Biotechnologies' shares at a premium indicates robust investor confidence in the company's potential, especially in the gene therapy sector for ocular diseases. The premium price of $1.20 per share over the 30-day volume-weighted average price suggests that investors are willing to pay more than the recent trading prices, which could be a positive signal for the company's valuation. The involvement of specialized healthcare investors and large investment management firms further adds credibility to the company's prospects.
From a financial standpoint, the expected gross proceeds of approximately $127.5 million provide a substantial runway, funding operations into late 2025. This extended cash runway is crucial for a clinical-stage company like Adverum, which has a significant burn rate due to research and development expenses. The capital raise should alleviate immediate dilution concerns, allowing investors to focus on the company's pipeline progress rather than short-term financing risks.
The fact that the securities offered by Adverum have not been registered under the Securities Act of 1933 and are subject to a private placement exemption underscores the importance of understanding regulatory compliance in such transactions. Adverum's commitment to file a registration statement with the SEC for the resale of these shares indicates a proactive approach to regulatory adherence and transparency. It is crucial for potential investors to note that the availability of these securities is limited to accredited investors and cannot be offered or sold publicly without proper registration or exemption.
Adverum Biotechnologies' focus on gene therapy for ocular diseases targets a niche yet growing market. The investment by specialized healthcare funds suggests a validation of the company's approach and market potential. Gene therapy as a sector has been gaining interest due to its innovative approach to treating diseases at the genetic level. Adverum's ability to secure funding despite broader market uncertainties could be indicative of a strong investment thesis backed by its technology and pipeline. However, investors should be aware of the inherent risks in the biotechnology sector, including clinical trial outcomes and regulatory hurdles, which can significantly impact the company's future.
- Financing led by TCGX with participation from new and existing investors including 5AM Ventures, Commodore Capital, Frazier Life Sciences, Logos Capital, Samsara BioCapital, Venrock Healthcare Capital Partners and Vivo Capital, as well two large investment management firms.
- Pro forma cash and investments expected to fund current operating plan into late 2025.
REDWOOD CITY, Calif., Feb. 05, 2024 (GLOBE NEWSWIRE) -- Adverum Biotechnologies, Inc. (Nasdaq: ADVM), a clinical-stage company that aims to establish gene therapy as a new standard of care for highly prevalent ocular diseases, today announced that it has agreed to sell approximately 106.25 million shares of its common stock (or pre-funded warrants in lieu thereof) to a select group of institutional and accredited healthcare specialist investors in a private placement, at a price per share of
The financing was led by TCGX with participation from new and existing investors including 5AM Ventures, Commodore Capital, Frazier Life Sciences, Logos Capital, Samsara BioCapital, Venrock Healthcare Capital Partners and Vivo Capital, as well as two large investment management firms. In lieu of shares of common stock, certain investors are purchasing pre-funded warrants at a purchase price of
The proceeds from this financing, combined with current cash, cash equivalents and marketable securities, are expected to be sufficient to fund the current operating plan into late 2025.
TD Cowen and Truist Securities acted as placement agents on the offering.
The securities described above have not been registered under the Securities Act of 1933, as amended. Accordingly, these securities may not be offered or sold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act. Adverum has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) registering the resale of the shares of common stock issued in this private placement. Any offering of the securities under the resale registration statement will only be made by means of a prospectus.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
About Adverum Biotechnologies
Adverum Biotechnologies (Nasdaq: ADVM) is a clinical-stage company that aims to establish gene therapy as a new standard of care for highly prevalent ocular diseases with the aspiration of developing functional cures to restore vision and prevent blindness. Leveraging the capabilities of its proprietary intravitreal (IVT) platform, Adverum is developing durable, single-administration therapies, designed to be delivered in physicians’ offices, to eliminate the need for frequent ocular injections to treat these diseases. Adverum is evaluating its novel gene therapy candidate, ixoberogene soroparvovec (Ixo-vec, formerly referred to as ADVM-022), as a one-time, IVT injection for patients with neovascular or wet age-related macular degeneration. Additionally, by overcoming the challenges associated with current treatment paradigms for debilitating ocular diseases, Adverum aspires to transform the standard of care, preserve vision, and create a profound societal impact around the globe. For more information, please visit www.adverum.com.
Forward-looking Statements
Statements contained in this press release regarding events or results that may occur in the future are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements associated with the intended use of net proceeds from the private placement, the Company’s cash sufficiency and runway, expected timing of closing of the private placement and the completion of the private placement, and other statements containing the words “anticipates,” “believes,” “expects,” “intends,” “plans,” “will” and similar expressions. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, including risks inherent to, without limitation: risks associated with market conditions. Additional risks and uncertainties facing Adverum are set forth under the caption “Risk Factors” and elsewhere in Adverum’s Securities and Exchange Commission (SEC) filings and reports, including Adverum’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed with the SEC on November 9, 2023. All forward-looking statements contained in this press release speak only as of the date on which they were made. Adverum undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.
Inquiries:
Adverum Investor Relations
Email: ir@adverum.com
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