Circassia leads UK biotech funding success

Three separate fund-raising rounds - headed by Circassia's £275 million placing and open offer - give a further indication of the revival in the UK biopharma sector.

Circassia plans to the use the proceeds to fund the purchase of two companies - Sweden's Aerocrine and UK-based Prosonix - that will allow it to expand into asthma and other respiratory diseases such as chronic obstructive pulmonary disorder (COPD).

This week has also seen Brighton-based Enterprise Therapeutics announce a £4 million Series-A round that will be used to advance its chronic respiratory disease portfolio, as well as a $90 million Series B financing by Cambridge firm Kymab, a specialist antibody developer.

Aside from its value, Circassia's fund-raising is also remarkable in that it illustrates the company's willingness to follow the lead of other companies such as Shire and grow by acquisition, rather than relying on bringing forward its in-house projects.

The financing comes after the company raised £200 million via an initial public offering (IPO) on the London Stock Exchange (LSE) just over a year ago.

"These proposed acquisitions and associated fundraising significantly accelerate Circassia's strategy to become a self-sustaining specialty biopharmaceutical company focused on allergy and asthma," said the firm's chief executive Steve Harris.

It is paying £139 million for Aerocrine, which already has a commercial infrastructure in place to sell its Niox Mino exhaled nitric oxide (NO) monitoring device - used in asthma diagnosis and management - and up to £100 million for Prosonix.

Aerocrine's salesforce will be used for the launch of Cat-SPIRE, a cat allergy immunotherapy in phase III clinical testing, while Prosonix bolsters Circassia's pipeline with a portfolio of generic respiratory drugs in late-stage development and proprietary drugs in trials.

Cat-SPIRE is currently in a phase III registration study called CATALYST that is scheduled to report results in the first half of 2016, while Circassia has a follow-up products for grass pollen, ragweed pollen and house dust mite allergy in phase IIb testing.

Taken together, the deals will help transform Circassia into a "specialty biopharmaceutical company with two currently marketed products sold to allergy/asthma specialists and 12 products in development for allergy, asthma and COPD."

The combined company is in line to launch up to eight additional products by the end of 2021, said Circassia in a statement.

Steve Harris told the Financial Times that the latest fundraising is "a great advert for London", which has also hosted IPOs for Horizon Discovery, Redx Pharma and US firm Verseon in recent months.