Rare Disease Companies Capitalize on Positive Market Sentiment to Raise Combined $515 Million

Rare Daily Staff

Three companies developing therapeutics for rare diseases tapped the public markets for fresh funds, taking advantage of a recent upswing in biotech initial public offerings and a move toward an opening up of investor interest in therapeutics developers.

Genetic medicines developer 4D Molecular Therapeutics priced an upsized underwritten public offering of 6.6 million shares of its common stock at a public offering price of $29.50 per share and, in lieu of shares of common stock, to certain investors, pre-funded warrants to purchase 3.6 million shares of common stock at a public offering price of $29.4999. In addition, 4DMT granted the underwriters a 30-day option to purchase up to an additional 1.5 million shares at the public offering price, less underwriting discounts and commissions. The gross proceeds from the offering are expected to be approximately $300 million before deducting underwriting discounts and commissions and other offering expenses.

4DMT’s proprietary invention platform, Therapeutic Vector Evolution, combines the power of the Nobel Prize-winning technology, directed evolution, with approximately one billion synthetic AAV capsid-derived sequences to invent customized and evolved vectors for use in its wholly owned and partnered product candidates. Currently, 4DMT is advancing five clinical-stage and two preclinical product candidates, each tailored to address rare and large market diseases in ophthalmology, pulmonology, and cardiology. In addition, 4DMT is also advancing programs in CNS through a gene editing partnership. Recently, the company received Rare Pediatric Disease designation for its aerosolized treatment for cystic fibrosis, which is currently being evaluated in the phase 1/2 AEROW clinical trial in people with cystic fibrosis who are not eligible for, or cannot tolerate, any of the currently approved CFTR modulators.

Four months after announcing a portfolio prioritization that included a 29 percent workforce reduction, Sana Biotechnology, a company focused on creating and delivering engineered cells as medicines for patients, raised $165 million in an underwritten upsized public offering of 17.3 million shares of its common stock at $5.50 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase 12.7 million shares of common stock at $5.4999 per pre-funded warrant. In addition, Sana granted the underwriters a 30-day option to purchase up to an additional 4.5 million shares of its common stock. The gross proceeds from the offering are expected to be approximately $165.0 million before deducting underwriting discounts and commissions and other offering expenses and excluding any exercise of the underwriters’ option to purchase additional shares.

Lead candidate SC291 is currently being evaluated in Sana’s ARDENT phase 1 study for the treatment of B-cell lymphomas and leukemias. Sana also received approval for an IND for SC291 for the treatment of multiple autoimmune diseases, with preliminary clinical data expected across multiple indications in 2024.

Tenaya Therapeutics, which is developing potentially curative therapies that address the underlying causes of heart disease, raised $50 million in an underwritten public offering.

The company priced 8.9 million shares of its common stock at $4.50 per share and, to certain investors in lieu of common stock, pre-funded warrants to purchase up to an aggregate of 2.2 million shares of its common stock at a purchase price of $4.499 per each pre-funded warrant.

Tenaya’s most advanced candidates include TN-201, a gene therapy for MYBPC3-associated hypertrophic cardiomyopathy (HCM), TN-401, a gene therapy for PKP2-associated arrhythmogenic right ventricular cardiomyopathy (ARVC), and TN-301, a small molecule HDAC6 inhibitor being initially developed for heart failure with preserved ejection fraction (HFpEF).