Last week Bellus uplisted to the Nasdaq, trading under ticker BLU. To complete the uplisting, Bellus announced a 3.6:1 consolidation of common shares and a $70M financing. The financing was priced at $7.10/share. Existing insiders participated by acquiring ~$6M of the offering.
Post the raise, Bellus has 54M shares outstanding and a pro-forma cash balance of roughly $95M to end Sept 30, 2019. Bellus is now sporting a $400M market cap, with an EV of $310M. The company is sufficiently funded to fund operations in early 2023, allocating the majority of their capital to clinical trials for chronic cough and chronic pruritus.
Remember, Merck acquired their leading P2X3 candidate for $500M upfront and up to an additional $750M in milestone payments. Shionogi and Bayer have also provided further support for the P2X3 MoA (more details here).
Bayer is expected to announce additional data for their selective P2X3 candidate in Q4 2019. Bayer’s candidate is ~125x more selective for P2X3 vs P2X2/3. The expected data readout in Q4 2019 could further validate the effectiveness of P2X3 candidates to suppress cough while having little to no impact on taste. Positive Bayer data will position Bellus to be the potential best in class drug as their candidate is about 1500x more selective for P2X3. Bellus data is expected mid-2020.
Bottom Line: Bellus management has continued to execute on their strategy. The Company is now trading on the Nasdaq and has a cash balance of $95M to develop P2X3 candidate post Phase 2a next year, if needed to.
Fennec Brings on Chief Commercial Officer
Today Fennec announced the appointment of Shubh Goel as Chief Commercial Officer. Ms. Goel will build and oversee Fennec's commercial strategy, including the launch and commercialization of Pedmark, if approved.
Goel’s appointment is the first step in Fennec building a sales team for the potential launch of Pedmark, which could be by this time next year. This is a move that gives Fennec flexibility, negotiating leverage and an alternate path to commercializing Pedmark by themselves, if no worthwhile takeout offers are on the table. We have always been of the opinion that Fennec will be acquired, however until now, the company did not have a Plan B.
With an experienced Chief Commercial Officer and $12.5M loan for commercialize efforts, self-commercialization is now a viable option.
It is interesting to note that Goel left a VP of Commercial Strategy & Operations at Odonate (ODT), a $1B oncology company in Phase 3, to take the Fennec role, a company trading at sub-$100M market cap. One may argue that Pedmark will be commercial by 2020, whereas Odonate’s Phase 3 candidate tesetaxel will need at least until 2024 to be commercial.
On the other hand, Goel was comfortable enough with Fennec’s manufacturing facility, the Company’s NDA timeline and the possibility that she may be out of a job if Fennec gets acquired to make the jump.
Bottom Line: We view Fennec’s new CCO hire as a bullish move on multiple fronts. She is an experienced executive in oncology as she led Celgene’s US marketing for Abraxane. With the hire, Fennec is in a much better position of leverage with a viable alternate plan to commercialize Pedmark solo.
PropThink contributors are LONG BLU & FENC.
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