Turnaround at Entera: Raising $275 million in a private placement
The fundraising, more than double the company's market value on the eve of the announcement, is expected to fund its operations until 2030. Among the Israeli connections: cooperation with Opko and a holding by Canada Israel Hotels.
The Israeli drug development company Entera Bio has announced a private placement of $275 million. Prior to the announcement, the company was traded on Nasdaq at a valuation of $101 million, so this investment represents a significant change in the company's situation.
According to the announcement, the amount is expected to be sufficient to fund Entera Bio's operations until 2030, including a Phase III trial for the company's lead product, an oral drug for the treatment of osteoporosis, which may allow for the product's marketing registration.
The move was led by BVF Partners, an American venture capital fund investing in the biomed sector, which has previously invested in the Israeli companies KHAR and BioLineRx. BVF will also add two members to the company's board of directors.
Other funds that participated in the financing round include Longitude Capital, Vivo Capital, TCGX, Spruce Street Capital, Venrock Healthcare Capital Partners, RA Capital Management, Perceptive Advisors, Driehaus Capital Management, Logos Capital, Catalio Capital Management, and others.
The share price in the offering is $2.04, similar to the market price of Entera Bio shares on Monday morning before the announcement.
The offering was led by Leerink Partners as the lead underwriter, together with Evercore, Guggenheim Securities, Cantor, LifeSci Capital, and Canaccord Genuity. The legal counsel for Entera are Herzog Fox & Neeman and Greenberg Traurig.
"Changed its face"
Company CEO Miranda Toledano told Globes today:
"Over the past four years, Entera has changed its face. The company always had good technology, but from 2022-2023, we replaced almost the entire management, all the product pipeline we have today is new, the regulatory path we built is new. We turned Entera into a company whose roots are in Israel, but it is completely competitive in its category on the international arena."
Toledano joined the company after over 20 years of experience in senior positions in the biomed sector. She served as COO, CFO, and director at TRIGR Therapeutics, a clinical-stage bispecific antibody company focusing on oncology, which was acquired by Compass Therapeutics in June 2021. Although this company is international, she managed it partially from Israel, to which she returned after years abroad for family reasons. She also manages Entera from Israel, as mentioned.
Before her time at TRIGR, she served as a healthcare investment banking manager at MLV, as a vice president at the Royalty Pharma investment group, and previously founded and managed the biomed division at Kost Forer Gabbay & Kasierer.
"I was invited to join Entera's board of directors in 2018, and when it was decided in 2022 to make a change in the company, one of the major investors asked me to lead it, because of my ability to connect the scientific field with the business field and the capital market. I was appointed to the position after the company had gone through four CEOs in four years."
Valuation of 522 million shekels
Entera develops oral drugs that replace injectable drugs, mainly peptide and protein-based drugs. It was originally founded based on technology developed by the company Oramed, which is traded on the Tel Aviv Stock Exchange at a valuation of 522 million shekels, and therefore Oramed is entitled to royalties in the event that Entera's drug does indeed reach the market.
Entera's most significant cooperation agreement today is with Opko, which is also traded in Tel Aviv. Under this agreement, Opko develops unique proteins and peptides, while Entera develops the delivery method, and the companies share both the costs and the revenues. "We preferred this approach over a royalty agreement, because it leaves us with ownership of the products," says Toledano.
This agreement includes three products. One product is a substitute for an existing injection: a drug for hypoparathyroidism, which is expected to enter clinical trials this year. Two products are not versions of existing drugs but products that do not exist on the market and may be category leaders, but are in the early stages of trials: a drug combining GLP1 hormones (like Ozempic) together with glucagon for metabolic diseases such as diabetes and obesity, and OXM, a peptide that acts as a stimulator of GLP1 and glucagon secretion.
The company was originally founded based on technology developed by the company Oramed, which is traded in Tel Aviv, but in recent years it has developed its own technology that allows for the administration of drugs orally in a once-a-day pill regimen (compared to 3-5 pills in the previous technology). The company has a royalty agreement with Oramed regarding the previous technology, but at the moment it does not seem that it intends to launch products based on this technology, and therefore this agreement is not very relevant today for both companies.
One of the first investors in the company was DNA Biomedical, which is traded in Tel Aviv, which underwent a reverse merger and is now Canada Israel Hotels. Prior to this current financing, this company held 7.6% of the company (4.3% on a fully diluted basis).
