Two Rare Disease Drug Developers Raise Combined $152.5 Million in PIPE Offerings

Rare Daily Staff

Two companies developing therapeutics for rare diseases, Zura Bio and Benitec Biopharma, raised $152.5 million in capital through private placements in public equity to fund the clinical development of their programs.

The financings reflect an ongoing trend among investors in the current biotech landscape to capitalize on buying private placements in public companies to capitalize on depressed values in public markets.

Zura Bio, a clinical stage, multi-asset immunology company developing novel dual-pathway antibodies for autoimmune and inflammatory diseases, entered into subscription agreements for a PIPE that is expected to result in gross proceeds of approximately $112.5 million, before deducting placement agent fees and offering expenses.

Access Biotechnology led the PIPE with participation from other new and existing investors RA Capital Management, Deep Track Capital, Great Point Partners, Suvretta Capital, funds managed by Allostery Investments, Armistice Capital, and other large investment management firms.

Proceeds from the private placement are expected to support the accelerated development of tibulizumab, including the planned phase 2 clinical trial in systemic sclerosis, a group of rare diseases characterized by rapid growth of fibrous tissue that leads to scarring of skin and internal organs, and the initiation of a phase 2 trial evaluating tibulizumab for the treatment of hidradenitis suppurativa, a rare, painful, long-term skin condition that causes skin abscesses and scarring on the skin. The combination of anticipated net proceeds with existing cash and cash equivalents is expected to support operations through 2027.

Benitec Biopharma, a clinical-stage, gene therapy-focused company developing novel genetic medicines based on its proprietary “Silence and Replace” DNA-directed RNA interference platform, raised $40 million through a PIPE financing that was led by Suvretta Capital Management, with participation from new and existing investors including Adage Capital Partners, Nantahala Capital, multiple healthcare-focused funds, and a leading mutual fund.

The company intends to use the net proceeds from the PIPE financing to fund the clinical development and related commercialization of it lead gene therapy candidate BB-301, including the natural history lead-in study and the phase 1b/2a BB-301 treatment study, and for general corporate purposes.

Benitec also reported the first efficacy signals demonstrated for BB-301 for the treatment of oculopharyngeal muscular dystrophy (OPMD). The first treated OPMD patient saw improvement in measures of swallowing ability at about three months was.

OPMD is a rare progressive muscle-wasting disease caused by a mutation in the poly(A)-binding protein nuclear 1 (PABPN1) gene, for which there is currently no effective drug therapy. The disease is characterized by swallowing difficulties (dysphagia), limb weakness and eyelid drooping (ptosis). Dysphagia worsens over time and can lead to chronic choking, regurgitation, aspiration pneumonia, and in severe cases, death. Available clinical and surgical interventions are limited in scope and effectiveness and do not address the underlying progressive muscle weakness.