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Alder sells $160M of stock to continue operations

July 15, 2017

It looks like cash-strapped Alder Biopharmaceutical (ALDR)’s headache is going away.

This morning the company announced the “underwriters of its previously announced underwritten public offering” will purchase an additional 2.25 million shares of Alder’s common stock, which is expected to generate $161.5 million for the company. Those funds were critical for the company’s goal of developing its migraine treatment, eptinezumab, an anti-CGRP monoclonal antibody. The stock offering is expected to close on July 18, the company said in its statement.

The stock acquisition occurred after the company announced on Tuesday that it was offering 15 million shares at $10 per share. That sent company stock up about 14 percent by lunch time on Thursday. Alder stock closed on Thursday at $10.13 per share, slightly above the offer price. Shares are up this morning, trading at $12.40 as of 10:38 a.m.

Alder stock has been on a rollercoaster ride over the past 12 months. Since a Sept. 21, 2016 high of $35.12, the stock has had its shares of ups and downs – although mostly downs.

Leerink Partners and Wells Fargo Securities acted as joint book-running managers for the offering. Needham & Company was a co-manager for the offering.

Alder said this morning that the proceeds from the stock sale will be used, along with available funds, to continue the clinical development of eptinezumab and support the Biologics License Application, as well as fund daily operations.

Eptinezumab is the company’s only product in the clinical stage of development. In June, the company announced eptinezumab hit the endpoint mark in a pivotal Phase III clinical trial. The Promise I trial met the primary endpoint of “highly statistically significant reductions in monthly migraine days,” the company said. While the company touted the reduction of migraine days, the benefits compared to placebo were less than what many investors had hoped to see, which caused a significant drop in stock prices.

The results showed that the 300 mg dose of eptinezumab reduced the number of monthly migraine days by 4.3 days from a baseline average of 8.6 days. Data also showed the 100 mg dose reduced migraine days by 3.9 days. In comparison though, placebo reduced migraine days by 3.2 days, about one day less than the high dose of eptinezumab.

Following the announced trial results, Randy Schatzman, president and chief executive officer of Alder Biopharmaceuticals, said the company remains on track to submit a BLA with the U.S. Food and Drug Administration in the second half of 2018. In addition to the Promise I trial, eptinezumab is being tested in another Phase III trial that focuses on chronic migraine.

Alder has had some financial difficulties. Earlier this week, analyst Brian Feroldi wrote in The Motley Fool that the company “lost more than $100 million in the first three months of the year alone.” At the end of the quarter, the company had a cash balance of $289 million, Feroldi said.

Adler is not the only company developing chronic migraine therapies using calcitonin gene-related peptides (CGRP) antagonists. Allergan (AGN) is also working on anti-CGRP migraine treatments to bolster its headache pain-management line helmed by Botox.

Migraine headaches impact about 12 percent of the U.S. population. About four million of those suffer from chronic migraines, meaning they are dealing with 15 migraines each month.

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