Rhythm and Orchard Each Raise $150 Million to Advance Their Rare Disease Programs
February 5, 2021
Rare Daily Staff
Rhythm Pharmaceuticals, a company focused on treatments for rare genetic diseases of obesity, raised $150 million in a public offering of 5 million shares of its common stock at $30 per share.
In addition, Rhythm granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of its common stock at the public offering price, less the underwriting discount and commission.
Rhythm’s Imcivree (setmelanotide) is the first-ever approved therapy for chronic weight management in adult and pediatric patients 6 years of age and older with obesity due to the rare genetic deficiencies POMC, PCSK1, and LEPR. Rhythm is hoping to expand its indication and is testing setmelanotide in a phase 2 basket study in patients with severe obesity due to genetic variants in the melanocortin-4 receptor (MC4R) pathway, and a phase 3 study in Baradet-Biedle syndrome and Alström syndrome.
Gene therapy drug developer Orchard Therapeutics entered into a securities purchase agreement to raise $150 million resulting from the sale of 24.1 million shares through a private investment in public equity (PIPE) financing at a price of $6.22 per share. The financing attracted several existing and new investors with expertise in healthcare, including RA Capital Management, Avidity Partners, Casdin Capital, Farallon Capital, and Surveyor Capital (a Citadel company), among others.
Orchard intends to use the net proceeds from the offering to support its growing commercial capabilities, including the launch of Libmeldy in Europe, advance its regulatory and clinical development activities and expand its hematopoietic stem cell (HSC) gene therapy approach into larger indications, and for general corporate purposes.
Libmeldy (OTL-200) is an ex vivo autologous hematopoietic stem cell gene therapy approved by the European Medicines Agency (EMA) in 2020 for the treatment of metachromatic leukodystrophy (MLD), a rare and life-threatening inherited disease of the body’s metabolic system. MLD is caused by a mutation in the arylsulfatase-A (ARSA) gene that results in the accumulation of fats called sulfatides in the brain and other areas of the body, leading to loss of sensory, motor and cognitive function.
“The updates we made to our strategy in 2020 have allowed us to focus on successfully achieving a number of important milestones over the past few quarters, including the approval of Libmeldy in Europe and clearing an IND and receiving RMAT designation for OTL-200 for MLD in the U.S.,” said Frank Thomas, Orchard’s president and chief operating officer. “We look forward to building on this strong execution with the support of a strategic group of investors who recognize the potential of HSC gene therapy to address genetic diseases with high unmet need, including conditions such as MPS-I and MPS-IIIA.”
Photo: Orchard President and Chief Operating Officer Frank Thomas
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