This is unusual. First Flexion Therapeutics raises $75 million, then $90 million. Turns out demand for Flexion stock exceeded expectations—even in this COVID-19 depressed equity market.
On May 20, 2020 Flexion Therapeutics, Inc. announced that it planned to offer $75 million to public investors. The Burlington, Massachusetts-based biopharmaceutical company subsequently issued a second press release updating the offering to 9,230,770 shares at $9.75 per share, equating to about $90 million before underwriting discounts and commissions are factored in.
The company said that it expects net proceeds will be $84.3 million. Goldman Sachs & Co, LLC. and Credit Suisse will be joint book-running managers for the offering, with RBC Capital Markets acting as senior manager, and Raymond James and Needham & Company as co-managers. The underwriters also have the option to purchase up to 15% in additional shares of common stock, offered with the underwriting discount.
Flexion Therapeutics did not specify what the funds would be used for exactly, but the company’s only source of income currently comes from sales of Zilretta. Fundraising will help to keep candidates moving through the pipeline and to promote additional indications for Zilretta. Zilretta is a non-opioid intra-articular injectable therapy for osteoarthritis-related knee pain.
The FDA recently approved a label update for the drug, striking out language cautioning repeat administration of the medication and addition of safety data from the Phase III repeat administration trial. The company has an ongoing Phase II trial testing the drug for osteoarthritis of the shoulder. Additionally, a Phase I trial of the company’s new therapeutic for knee osteoarthritis, known as FX201, is currently underway. FX201 is an adenovirus-based gene therapy that has shown persistent suppression of inflammation through stimulation of interleukin-1 receptor antagonist (IL-1Ra) in preclinical studies.
Flexion Therapeutics is focused on developing novel therapies for musculoskeletal conditions, starting with osteoarthritis. The company’s stated core values are “focus, ingenuity, tenacity, transparency, and fun.”
