89bio, Inc. Announces Proposed Underwritten Public Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

89bio (Nasdaq: ETNB) has announced a proposed underwritten public offering of $250.0 million of common stock and pre-funded warrants. The company will grant underwriters a 30-day option to purchase up to an additional $37.5 million of shares. The proceeds will fund ongoing clinical activities and development of pegozafermin, manufacturing costs, and general corporate purposes.

The offering is being led by Goldman Sachs & Co. , Leerink Partners, and BofA Securities, with Cantor acting as book-running manager. The securities will be offered through an automatically effective shelf registration statement filed with the SEC on May 23, 2023.

Positive

• Substantial capital raise of $250.0 million with potential additional $37.5 million
• Funds allocated to advance pegozafermin development and manufacturing
• Strong underwriting team including major financial institutions

Negative

• Potential dilution for existing shareholders
• Uncertainty regarding final offering terms and completion
• Additional share issuance may pressure stock price

Insights

Financial Analyst

This $250 million capital raise, representing approximately 30% of 89bio's current market capitalization, is a strategic move that significantly strengthens the company's financial position. The additional $37.5 million option for underwriters could potentially bring the total raise to $287.5 million.

The participation of top-tier investment banks as lead book-running managers is particularly noteworthy. The involvement of Goldman Sachs, Leerink Partners and BofA Securities suggests strong institutional confidence in 89bio's clinical programs and commercial potential. These prestigious underwriters typically conduct extensive due diligence before backing biotechnology offerings of this magnitude.

The offering's structure, including pre-funded warrants as an alternative to common stock, provides flexibility for certain investors while potentially minimizing immediate market impact. However, shareholders should anticipate dilution of their ownership stakes, though this is offset by the company's strengthened ability to advance its pegozafermin program without near-term capital constraints.

The timing of this offering appears strategic, as biotechnology companies typically raise capital when they have positive momentum or anticipate significant clinical or regulatory catalysts. The substantial size of the raise suggests 89bio is preparing for extensive clinical development and potential commercialization activities, which could accelerate their timeline to market.

SAN FRANCISCO, Jan. 27, 2025 (GLOBE NEWSWIRE) -- 89bio, Inc. (“89bio”) (Nasdaq: ETNB), a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardiometabolic diseases, today announced that it has commenced an underwritten public offering of $250.0 million of shares of its common stock or, in lieu of common stock to certain investors that so choose, pre-funded warrants to purchase shares of its common stock. In addition, 89bio is expected to grant the underwriters of the offering an option for a period of 30 days to purchase up to an additional $37.5 million of shares of its common stock at the public offering price, less the underwriting discounts and commissions. The proposed public offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed or as to the actual size or terms of the offering. All of the securities to be sold in the offering are being offered by 89bio.

89bio intends to use the net proceeds from this proposed offering to fund ongoing clinical activities and development of pegozafermin, manufacturing related costs and other general corporate purposes, including working capital and operating expenses.

Goldman Sachs & Co. LLC, Leerink Partners and BofA Securities are acting as lead book-running managers and Cantor is acting as book-running manager for the proposed offering.

An automatically effective shelf registration statement relating to these securities was filed with the Securities and Exchange Commission (“SEC”) on May 23, 2023. The offering is being made only by means of a prospectus, including a prospectus supplement, forming a part of an effective registration statement. A preliminary prospectus supplement and accompanying prospectus relating to the offering have been filed with the SEC and are available on the SEC’s website, located at www.sec.gov. Prospective investors should read the preliminary prospectus supplement and the accompanying prospectus and other documents 89bio has filed with the SEC for more complete information about 89bio and the offering. Electronic copies of the preliminary prospectus supplement and the accompanying prospectus related to the offering may also be obtained by contacting Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, by telephone at (866) 471-2526 or by email at prospectus-ny@ny.email.gs.com; Leerink Partners, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, MA 02109, by telephone at (800) 808-7525, ext. 6105, or by email at syndicate@leerink.com; BofA Securities, Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon, Charlotte, NC 28255-0001, or by email at dg.prospectus_requests@bofa.com; or Cantor Fitzgerald & Co., Attention: Capital Markets, 110 East 59th Street, 6th Floor, New York, NY 10022, or by email at prospectus@cantor.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, 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 89bio

89bio is a clinical-stage biopharmaceutical company dedicated to the development of therapies for patients with liver and cardiometabolic diseases who lack optimal treatment options. The company is focused on advancing its lead candidate, pegozafermin, through Phase 3 clinical development for the treatment of metabolic dysfunction-associated steatohepatitis and severe hypertriglyceridemia. Pegozafermin is a specifically engineered fibroblast growth factor 21 analog with unique glycoPEGylated technology that optimizes biological activity through an extended half-life. The company is headquartered in San Francisco.

Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws, including, but not limited to, 89bio’s expectations regarding the progress of its clinical trials, the proposed offering, including the timing, size, structure and completion of the proposed offering on the anticipated terms, the anticipated use of the net proceeds of the offering and the grant to the underwriters of the option to purchase additional shares. Words such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “anticipate,” “goal,” “opportunity,” “develop,” “plan” or the negative of these terms, and similar expressions, or statements regarding intent, belief, or current expectations, are forward looking statements. While 89bio believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties (including, without limitation, those set forth in 89bio’s filings with the SEC), many of which are beyond 89bio’s control and subject to change. Actual results could be materially different. Risks and uncertainties include: changes as a result of market conditions or for other reasons; the risk that the offering will not be consummated; the impact of general economic, health, industrial or political conditions in the United States or internationally; and other risks and uncertainties identified in 89bio’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and other subsequent disclosure documents filed with the SEC. 89bio claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. 89bio expressly disclaims any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact:
Annie Chang
89bio, Inc.
annie.chang@89bio.com

PJ Kelleher
LifeSci Advisors, LLC
+1 617-430-7579
pkelleher@lifesciadvisors.com

Media Contact:
Sheryl Seapy
Real Chemistry
sseapy@realchemistry.com

FAQ

How much is 89bio (ETNB) planning to raise in their public offering?

89bio is planning to raise $250.0 million, with an additional option for underwriters to purchase up to $37.5 million in shares, potentially totaling $287.5 million.

What will ETNB use the proceeds from the public offering for?

The proceeds will be used to fund ongoing clinical activities and development of pegozafermin, manufacturing related costs, and general corporate purposes including working capital and operating expenses.

Who are the lead underwriters for ETNB's public offering?

Goldman Sachs & Co. , Leerink Partners, and BofA Securities are acting as lead book-running managers, with Cantor acting as book-running manager.

When did ETNB file their shelf registration statement for this offering?

89bio filed their automatically effective shelf registration statement with the SEC on May 23, 2023.

What types of securities is ETNB offering in this public offering?

89bio is offering shares of common stock and pre-funded warrants to purchase shares of common stock for certain investors who prefer that option.