Genprex, a biotech based in Austin, Texas, just raised $25.5 million through two stock offerings. The company sold 7.62 million shares of common stock on Jan. 28, raising $8 million. And just last week, they closed the sale of another 5 million shares of common stock totaling an additional $17.5 million. Previously known as Convergen LifeSciences, they went pubic in IPO. Alliance Global Partners led the placement while Joseph Gunnar & Company served as a co-placement agent for both deals.
Funding Clinical Trials
The proceeds will power the commencement of two clinical trials involving the venture’s licensed gene therapy called Oncoprex. With only six employees, the Austin-based firm must hire more executives to execute on these studies. Three studies involve combination therapy treatments with existing therapies.
Oncoprex was granted fast track designation by the U.S. Food and Drug Administration (FDA) in January. The FDA action contributed to the small firm’s ability to raise funds.
IP Originates at University of Texas MD Anderson
Genprex’s product Oncoprex was licensed from the University of Texas MD Anderson Cancer Center. The product was designed to apply to cancer—the therapy involves the injecting of tumor suppressor genes that are wrapped in nanoparticles directly into a patient’s bloodstream.
Their initial target with Oncoprex is non-small cell lung cancer (NSCLC). They leveraged the two Phase I clinical trials conducted by MS Anderson as well as an ongoing Phase II study.
Additionally, they believe that their platform technologies could be applied to the fight against other cancer genes—alone and in combination with other cancer therapies to combat multiple types of cancer.
The company must develop a robust pipeline to maintain value. In addition to Oncoprex, the company inked a deal with the University of Pittsburgh for a gene therapy treatment for Type 1 and Type 2 diabetes.
At $4.78 per share, this venture faces considerable risks. In fact, like many pre-revenue biotech firms, they have incurred significant losses since their inception, including an accumulated deficit of approximately $14.9 million by the time they went public. That number has gone up. Their independent public accounting firm indicated, as they planned the public offering, that their financial condition raises substantial doubt as to their ability to be viable and that if they couldn’t raise more capital in a timely manner they wouldn’t be able to execute.
Moreover, gene therapy in the context of biopharma product development represents an incredible risk, speculative undertakings—a great deal of uncertainty is involved. As their therapy products are based on novel technologies, it isn’t very easy to predict if they will work as intended.
A Tragic Side Note
Founded in 2009 as Convergen LifeSciences, by 2011 the firm raised a $4.5 million state technology grant that triggered some controversy because the CEO at the time, David Nance, contributed $100,000 to (then) Gov. Rick Perry. Nance launched Convergen in 2009 just after leaving his CEO position at Introgen Therapeutics, which filed for bankruptcy after a failed effort to bring another cancer drug to market. Tragically, Nance left Convergen in 2016 due to a battle with cancer which he lost, losing his life that year.