7:30 AM
 | 
Sep 13, 2018
 |  BC Extra  |  Financial News

Xenon further strengthens balance sheet with $63M follow-on

Xenon Pharmaceuticals Inc. (NASDAQ:XENE) raised $63 million through the sale of 4.5 million shares at $14 in a follow-on underwritten by Jefferies and Stifel.

The price is a 2% discount to Xenon's closing price of $14.25 on Wednesday, when it proposed the offering after market hours. Xenon was down $0.30 to $13.95 on Thursday.

Last week, Xenon said it hopes to begin a Phase III trial in mid-2019 of anticonvulsant XEN496, a pediatric formulation of Kv7 potassium channel modulator ezogabine to treat epileptic encephalopathy associated with potassium channel Kv7.2 (KCNQ2). GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) previously marketed ezogabine as Potiga and Trobalt, but withdrew it from the market.

On Monday, Xenon said it had bought out milestone and royalty obligations associated with XEN1101, another Kv7 potassium channel modulator in development to treat epilepsy, from Bausch Health Companies Inc. (NYSE:BHC; formerly Valeant Pharmaceutical International Inc.) for a $6 million one-time payment. Xenon plans to start a Phase II trial of that anticonvulsant next quarter to treat adults with focal seizures.

According to recent guidance before the follow-on was announced, Xenon expected to have enough cash to fund operations into at least mid-2020. It had $63.3 million in cash at June 30, including $29 million from an at-the-market offering conducted in May; Xenon added another $14.7 million in a subsequent at-the-market offering.

Xenon shares are up about 400% since closing at $2.83 on the last trading day of 2017.

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