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IGM Biosciences Raises $200 Million After Announcing Sanofi Collaboration

Company has nearly tripled its cash balance in a week.

Image source: IGM Biosciences

IGM Biosciences (IGMS) announced the pricing of its public offering of 8,695,653 shares of common stock at $23 per share, a 22% discount to Tuesday's closing price of $29.49.

The $200 million in gross proceeds will be added to the $150 million upfront payment it is receiving from Sanofi ( Sanofi - ADR - $47.94 0.61 (0.01256%)  ) in a research and development collaboration announced Tuesday.

IGM is developing a new class of potential therapeutics that combine the multi-valency of Immunoglobulin M (IgM) antibodies that have 10 binding sites compared to conventional Immunoglobulin G (IgG) antibodies that have only two target binding sites.

Sanofi deal

IGM and Sanofi have agreed to leverage IGM's proprietary IgM antibody technology platform to discover agonists against three oncology targets and three immunology and inflammation targets.

Sanofi will pay IGM $150 million upfront, and IGM has the potential to earn over $6 billion in development, regulatory and commercial milestones from Sanofi.

“We look forward to this collaboration with IGM Biosciences, a pioneer in a new class of antibody medicines for the treatment of cancer, immunology, and inflammatory diseases," said John Reed, M.D., Ph.D., Global Head of Research and Development at Sanofi.

"The IGM Biosciences technology platform offers an exciting approach to developing high-avidity IgM antibodies that can efficiently bind and stimulate the activity of cell surface receptors. This unique platform has the potential to overcome historical limitations of conventional IgG antibodies when seeking agonists of some classes of receptors.”

Investment thesis

IGM Biosciences stock had been in a long downturn since its January 2021 peak, prior to the activity this week. The stock nearly doubled on Tuesday on the heels of the Sanofi deal, though it has settled a bit since then.

Even after the week's run, the company's market capitalization was only about $900 million before this week's equity offering, which now puts IGM at about $1.1 billion.

  • IGM is not your run-of-the-mill speculative biotech.
  • The Sanofi deal provides name-brand validation of the company's technology.
  • The proprietary IgM antibody technology is protected by a portfolio of 34 patent families.
  • Investors will have multiple opportunities for catalyst events in 2022:

    • Phase 1 data on IGM-8444, an IgM antibody targeting Death Receptor 5 (DR5) that is being developed for the treatment of patients with solid and hematologic malignancies.
    • Phase 2 data on IGM-2323, an IgM-based CD20 x CD3 bispecific antibody T-cell engager for the treatment of B cell non-Hodgkin’s lymphoma.
    • Investigational new drug (IND) application for a new potential treatment for solid and hematologic malignancies.
    • IND for a new potential treatment for multiple myeloma.
  • The company had $230 million in cash and equivalents as of Dec. 31, 2021 and added $350 million this week.

[Note: Article has been updated on March 31, 2022, to include stock chart.]

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Source: Equities News