Legend Biotech, Johnson & Johnson’s partner on closely watched CAR-T therapy Carvykti, is looking for additional funding as the drug launches and the Chinese biotech's global expansion kicks into gear.
The biotech is looking to raise $350 million from selling over 8 million American Depositary Shares at a public offering price of $43 each. The deal would also have a 30-day option for underwriters to buy an additional 1.22 million shares, according to a recent company statement.
The $350 million target represents an upgrade from the original proposal of $250 million.
“If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts,” Legend said in a U.S. Securities and Exhcange Commission filing.
However, the company expects its existing cash to fund expenses for “at least the next 12 months.”
The need for additional money comes as Legend's U.S. stock faces a delisting threat from the SEC because of an auditor inspection regulatory brawl between the U.S. and China. Legend is hoping to resolve the issue, now shifting its auditor from Ernst & Young's Chinese operation to its U.S.-based firm.
Legend is at a critical moment in its growth trajectory. In the SEC filing, the company cited expenses for Carvykti’s marketing, manufacturing and distribution, aside from the costs added from operating as a public company, which is why the company is looking for additional funding.
In the first quarter, Legend’s revenue increased to $40,827 from $13,682 during the same period last year. Loss during the three months ending March 31 has dwindled to $41,087 from $80,899.
J&J bought certain rights to Carvykti for an upfront fee of $350 million with an additional $1.35 billion promised in milestone payments. The collaboration is a "divide and conquer” approach to the drugs commercial rollout.
In April, Legend received a milestone payment of $50 million from J&J associated with Carvykti’s FDA approval. Additionally, the company is entitled to advances from its partner if the collaboration's “estimated working capital for any year falls below $50 million.”
Legend aims to be a “fully integrated global cell therapy leader” with capabilities across R&D, manufacturing and commercialization, CEO Ying Huang, Ph.D., told Fierce Pharma earlier this year.
Carvykti earned its FDA approval in February for myeloma patients who have tried at least four lines of therapy. J&J is running a trial in patients who have received one to three prior lines of therapy. In addition, a phase 3 trial posted at the same time as the FDA approval tests Carvykti against stem cell transplant in newly diagnosed patients.
Editor's Note: The story was updated on July 27 to reflect the new $350 million target versus the original $250 million proposal.