Bicycle Therapeutics Announces $555 Million Private Placement Equity Financing

Rhea-AI Summary

Bicycle Therapeutics has announced a $555 million private placement equity financing, involving both new and existing investors.

This financing strengthens the company's balance sheet, giving it a pro forma cash position of approximately $1 billion, which extends its financial runway into the second half of 2027.

The funds will be used to advance Bicycle's pipeline of clinical-stage precision-guided therapeutics and support other research and development activities.

The financing is expected to close on May 28, 2024, subject to customary conditions.

Key investors include a U.S.-based healthcare investor, Deep Track Capital, EcoR1 Capital, Fairmount, Forbion, Perceptive Advisors, and RA Capital Management.

Positive

• Secured $555 million in private placement equity financing.
• Pro forma cash position of approximately $1 billion.
• Extends financial runway into the second half of 2027.
• Funding supports development of clinical-stage precision-guided therapeutics.
• Participation from both new and existing reputable investors.
• Multiple high-value programs and catalysts anticipated in the second half of 2024.

Negative

• The financing dilutes existing shareholders with the issuance of 25,933,706 new shares.
• The funds are partly allocated to general corporate purposes, which may not directly result in revenue generation.
• Closing is subject to customary conditions, introducing an element of uncertainty.
• Securities are sold in a private placement and are not registered under the Securities Act, limiting liquidity.

Insights

Financial Analyst

The announcement of a $555 million PIPE financing is a significant move for Bicycle Therapeutics. From a financial perspective, this transaction strengthens the company's balance sheet considerably, resulting in a pro forma cash position of approximately $1.0 billion. This extended financial runway into the second half of 2027 positions the company well to continue its work on its pipeline of clinical-stage precision-guided therapeutics.

Such a substantial cash injection can mitigate financing risks and allow the company to focus on long-term research and development without immediate concerns about liquidity. With participation from notable healthcare-focused investors, this financing round not only brings in capital but also endorsements from knowledgeable market participants, which can enhance investor confidence.

However, investors should consider the dilution effect due to the issuance of 25,933,706 new shares, which might impact the stock's short-term price. In the long term, assuming the company can effectively utilize these funds to bring successful therapeutics to market, the benefits could outweigh the dilution.

Market Research Analyst

The successful closing of this financing indicates robust investor confidence in Bicycle Therapeutics' business model and technology platform. This is noteworthy because investors are willing to commit a substantial amount of capital in a less liquid private placement, suggesting they foresee significant potential upside. This confidence is perhaps bolstered by the company's progress and future catalysts in 2024 that may provide milestones for further value creation.

It's important for retail investors to understand that the participation of prominent investors like Deep Track Capital and EcoR1 Capital often signals strong due diligence and belief in the underlying science and market opportunity. While the immediate market reaction might reflect the dilution effect, long-term potential remains tied to the successful advancement of their clinical programs.

Moreover, focusing on precision-guided therapeutics in oncology and other diseases represents a high-growth area within the biotech sector. If Bicycle Therapeutics can demonstrate successful clinical results, it could capture a significant market share, driving long-term stock appreciation.

Medical Research Analyst

Bicycle Therapeutics' ability to raise such a significant sum underscores the potential seen in its proprietary bicyclic peptide technology. These precision-guided therapeutics, if successful, could offer substantial improvements over existing treatments, particularly in oncology where there is a constant demand for more effective therapies with fewer side effects.

For retail investors, it's valuable to note that the funds will support ongoing and new research efforts, which may lead to multiple clinical catalysts in the coming years. The company's strategy to fund both high-value programs and earlier discovery efforts indicates a balanced approach to pipeline development, potentially leading to a more diversified product portfolio in the future.

However, the path to bringing new therapeutics to market is fraught with regulatory and clinical trial risks. Investors should keep an eye on upcoming clinical data releases and regulatory filings, as these will be critical in validating the company's technology and long-term viability.

Financing includes participation from new and existing investors

Strengthens balance sheet, with pro forma cash position of approximately $1.0 billion, extending expected financial runway into the second half of 2027

Supports ongoing advancement of pipeline with multiple clinical-stage precision-guided therapeutics

CAMBRIDGE, England & BOSTON--(BUSINESS WIRE)-- Bicycle Therapeutics plc (NASDAQ: BCYC), a pharmaceutical company pioneering a new and differentiated class of therapeutics based on its proprietary bicyclic peptide (Bicycle^®) technology, today announced that the company has entered into a securities purchase agreement with certain existing and new accredited investors to issue and sell an aggregate of 25,933,706 American Depositary Shares (“ADSs”), each representing one ordinary share, and in lieu of ADSs to investors that so choose, non-voting ordinary shares, each at a price of $21.42 per share, through a private investment in public equity (“PIPE”) financing. Bicycle anticipates the gross proceeds from the PIPE to be approximately $555 million. The financing is expected to close on May 28, 2024, subject to customary closing conditions.

The financing was led by a U.S.-based healthcare focused investor with participation from Deep Track Capital, EcoR1 Capital, Fairmount, Forbion, Perceptive Advisors and RA Capital Management. Bicycle plans to use the net proceeds to fund the continued development of its proprietary pipeline and for other research and development, as well as for general corporate purposes.

“We are excited to announce today’s financing as it underscores the increasing conviction that our investors have in the Bicycle^® platform and team to create novel precision-guided therapeutics, which we believe have the potential to offer patients a significantly improved quality of life over other treatments,” said Kevin Lee, Ph.D., CEO of Bicycle Therapeutics. “This financing will support our progress across multiple high-value programs and earlier discovery pipeline, both of which have multiple catalysts in the second half of 2024, as we develop innovative medicines that could help patients with cancer and other diseases live longer and live well.”

Subsequent to the closing of this financing, Bicycle expects its pro forma cash and cash equivalents will be approximately $1.0 billion as of May 23, 2024. This cash estimate is a preliminary estimate and based on information currently available to management, and these estimates could change.

Jefferies is acting as sole placement agent for the financing.

The offer and sale of the securities to be sold in the PIPE are being made in a transaction not involving a public offering, and the securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws, and will be sold in a private placement pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D as promulgated by the Securities and Exchange Commission (“SEC”) under the Securities Act. Accordingly, the 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. Pursuant to the securities purchase agreement, Bicycle has agreed to file a registration statement with the SEC registering the resale of the ADSs and ordinary shares or ADSs issued upon the re-designation of the non-voting ordinary shares issued in the PIPE.

This press release shall not constitute an offer to sell, or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Bicycle Therapeutics
Bicycle Therapeutics is a clinical-stage pharmaceutical company developing a novel class of medicines, referred to as Bicycle^® molecules, for diseases that are underserved by existing therapeutics. Bicycle molecules are fully synthetic short peptides constrained with small molecule scaffolds to form two loops that stabilize their structural geometry. This constraint facilitates target binding with high affinity and selectivity, making Bicycle molecules attractive candidates for drug development. The company is evaluating BT8009, a Bicycle^® Toxin Conjugate (BTC^®) targeting Nectin-4, a well-validated tumor antigen; BT5528, a BTC targeting EphA2, a historically undruggable target; and BT7480, a Bicycle Tumor-Targeted Immune Cell Agonist^® (Bicycle TICA^®) targeting Nectin-4 and agonizing CD137, in company-sponsored clinical trials. Additionally, the company is developing Bicycle^® Radio Conjugates (BRC™) for radiopharmaceutical use and, through various partnerships, is exploring the use of Bicycle^® technology to develop therapies for diseases beyond oncology.

Bicycle Therapeutics is headquartered in Cambridge, UK, with many key functions and members of its leadership team located in Cambridge, Mass.

Forward Looking Statements
This press release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “anticipates,” “could,” “expects,” “may,” “plans,” “potential,” “seeks,” “will” and variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Certain statements contained in this press release, including those relating to the timing and completion of the financing and the satisfaction of customary closing conditions related to the financing, the anticipated total gross proceeds from the financing, the planned use of proceeds of the financing and Bicycle’s expected financial runway following the financing, are forward‐looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward‐looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with the consummation of the proposed financing, the completion of the financing on the anticipated terms or at all, uncertainties related to market conditions, the satisfaction of customary closing conditions related to the proposed financing, the risk that Bicycle’s projections regarding its expected cash runway are inaccurate or that its conduct of its business requires more cash than anticipated and general economic conditions. Bicycle may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Other factors that may cause actual results to differ from those expressed or implied in the forward-looking statements in this press release are discussed in Bicycle’s filings with the SEC, including under the heading “Risk Factors” contained therein which are available at www.sec.gov. Any forward-looking statements contained in this press release speak only as of the date hereof, and Bicycle expressly disclaims any obligation to update any forward-looking statements contained herein, whether because of any new information, future events, changed circumstances or otherwise, except as otherwise required by law. Bicycle’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240523478875/en/

Investors:

Stephanie Yao

SVP, Investor Relations and Corporate Communications

ir@bicycletx.com

857-523-8544



Media:

Deborah Elson

Argot Partners

media@bicycletx.com

212-600-1902

Source: Bicycle Therapeutics plc

FAQ

What is the amount raised by Bicycle Therapeutics in the recent financing?

Bicycle Therapeutics raised $555 million in a private placement equity financing.

How will the $555 million financing affect Bicycle Therapeutics' cash position?

The financing will result in a pro forma cash position of approximately $1 billion, extending the financial runway into the second half of 2027.

What will the funds from the $555 million financing be used for?

The funds will support the development of Bicycle Therapeutics’ pipeline of clinical-stage precision-guided therapeutics and other research and development activities.

When is the expected closing date for Bicycle Therapeutics' $555 million financing?

The financing is expected to close on May 28, 2024, subject to customary closing conditions.

Which investors participated in Bicycle Therapeutics' $555 million financing?

Investors include a U.S.-based healthcare investor, Deep Track Capital, EcoR1 Capital, Fairmount, Forbion, Perceptive Advisors, and RA Capital Management.

How many new shares will be issued in Bicycle Therapeutics' $555 million financing?

Bicycle Therapeutics will issue 25,933,706 new shares in the financing.

What is the share price set for the new shares issued in Bicycle Therapeutics' financing?

Each new share is priced at $21.42 in the private placement equity financing.

What are the risks associated with Bicycle Therapeutics' $555 million financing?

The risks include shareholder dilution, funds allocated for general corporate purposes, customary closing conditions, and liquidity due to unregistered securities.