Shares in Montreal gene therapy developer enGene Holdings Inc. ENGN-Q more than doubled Wednesday after the company said it had raised $200-million in an oversubscribed private placement priced 31 per cent above its previous closing price.
The company’s Nasdaq-listed stock closed up 116.5 per cent on the day to US$16.50 after the company said it had sold 20 million common shares at US$10 apiece, excluding offering-related expenses.
Participating investors include new and prior backers, such as Adage Capital Partners, Blue Owl Healthcare Opportunities, Boxer Capital, Citadel-owned Surveyor Capital, Janus Henderson Investors and early backer Lumira Ventures of Toronto.
It’s the second transformative financing for the 25-year-old company in the past four months, nearly doubling its 23.2 million share count. It became a public company after it merged in November with a special purpose acquisition company, raising US$138-million in net proceeds. The financings are expected to fund enGene through trials and to its first commercial launch.
The share sale was tempered by news that enGene’s Boston-based chief executive officer Jason Hanson has resigned for personal family and health reasons. Mr. Hanson had led privately held enGene for the previous six years, and said in a release he would support “a smooth CEO succession process” as the company looks for a replacement.
The company is developing a precision gene therapy designed to generate a local immune reaction near tumours. Its “DDX” platform promises to enable carrier molecules to penetrate mucous membranes in the body and deliver a wide range of cargo types to cells. Those in turn transform the cells into therapeutic production “factories” to generate proteins and RNA to deliver a desired effect in the targeted area.
“We believe this enables the immune system to reduce or clear the tumour and develop memory to resist recurrence,” and can be applicable to many types of tumours, enGene states in its annual report.
The company is starting with a treatment to target non-muscle invasive bladder cancer called EG-70. It has received “fast track designation” from the U.S. Food and Drug Administration because it addresses an unmet medical need. About 82,000 people are diagnosed with bladder cancer and 16,000 die in the U.S. each year. The designation gives enGene a quicker pathway to approval if it passes safety tests and delivers a meaningful improvement to patient health. Initial safety data show it has been well-tolerated in humans, and enGene expects to publish interim efficacy results from a 100-patient study in mid-2024.
The company was founded in Vancouver 25 years ago by University of British Columbia molecular and cellular medicine professor Timothy Kieffer and postdoctoral student Anthony Cheung, who was the first CEO and is now chief technology officer. It originally pursued a treatment for diabetes after Dr. Kieffer’s research team successfully tricked cells in the stomachs of mice into producing insulin.
But enGene struggled to raise financing and in the early 2010s, Lumira, which liked its platform, convinced the core team to move to Montreal and financed the company through a fund backed by Merck & Co. earmarked for Quebec-based startups. Lumira brought in other investors, including the Fonds de solidarité FTQ, one of Canada’s top biotech investors, and invested more than $40-million from three funds it manages. Lumira also recruited Richard Glickman, one of Canada’s most successful biotech founders, onto the board.
“In 2013 access to capital was very limited, but we believed in enGene and we were able to invest capital from our newly formed Merck Lumira fund to transition the company to Montreal where it has been built with strong support from the local ecosystem,” Lumira managing general partner Peter van der Velden said in an e-mail. “We believe we are just at the start of what will prove to be a transformative phase for the company.”
Dr. Glickman in an interview credited Dr. Cheung and Mr. Hanson for “finding the right niche to drive their programs forward” by shifting enGene’s focus to bladder cancer. He added, “I think we’re scratching the surface with the platform” and said the financing would enable enGene to move other therapies into clinical development.
Sean Silcoff