CAMBRIDGE, Mass.– Axcella Therapeutics (Nasdaq: AXLA), a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using multi-targeted endogenous metabolic modulator (EMM) compositions, today announced that it has entered into a securities purchase agreement with investors in a registered direct offering of 20,847,888 shares of common stock (the “Shares”) at a purchase price of $1.64 per share, resulting in gross proceeds of $34.2 million, including $6.0 million received as the cancellation of indebtedness upon the conversion of unsecured subordinated convertible promissory notes held by Flagship Pioneering.
The offering closed on October 13, 2022. Since this offering was made without an underwriter or a placement agent, Axcella did not pay any underwriting discounts in connection with the transaction. Axcella intends to use the net proceeds from the offering together with existing cash and cash equivalents to advance the Long COVID program, including regulatory engagement and preparation for further clinical development; advance and complete enrollment of its EMMPACT Phase 2b clinical trial in non-alcoholic steatohepatitis (NASH); and for working capital and other general corporate purposes.
The Shares were offered pursuant to a shelf registration statement that was previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on June 12, 2020.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Shares, nor shall there be any sale of the Shares in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
“We believe investors were attracted by results from our Phase 2a Placebo Controlled Clinical Trial for Long COVID and positive interim data from our Phase 2b study of NASH. In addition to strong support from our largest current investors, this round of financing also included five investors who are new to Axcella as well as certain Directors and members of management of the company,” said Bill Hinshaw, CEO of Axcella.
Simultaneous with the financing, the company is appointing Robert Rosiello and Torben Straight Nissen to its Board of Directors, and Mr. Rosiello also will become Chairman of the Board. Mr. Rosiello is an Executive Partner of Flagship Pioneering, where he focuses on building capability to originate, manage, and grow new Flagship companies, and helps drive Flagship’s strategy, institution building, and growth initiatives. He came to Flagship after a thirty-year career at McKinsey advising CEOs and Boards of leading healthcare, technology and consumer companies. He also has experience managing through periods of change in a public company as CFO, and he has start-up Board experience through his previous service on the board of Flagship company Inari. Mr. Straight Nissen is a Senior Partner at Flagship Pioneering, where he is responsible for company creation in one of Flagship’s newest growth vectors, Preemptive Health and Medicine. He has provided executive and R&D leadership to biotech and pharmaceutical companies for more than twenty years. Prior to joining Flagship, Mr. Straight Nissen headed up Strategic Portfolio Management for Pfizer’s worldwide R&D organization where he oversaw Pfizer’s portfolio spanning discovery to Phase 2b across all major therapeutic areas.
“Axcella’s emerging leadership in therapeutics for Long COVID and NASH make it an exciting time for the company, and I look forward to working with the Axcella management team and Board as we advance the platform and continue to build value in the company,” said Mr. Rosiello.
“Axcella has generated impressive clinical data that demonstrate the potential to harness the power of EMMs to tackle prevalent chronic conditions and I believe the company is now well positioned to provide safe and convenient orally delivered 1st line treatments for diseases with large unmet medical needs, such as NASH and Long COVID,” said Mr. Straight Nissen. “I look forward to working with Bill and his team to bring these important products to patients and their families.”
With Mr. Rosiello and Mr. Straight Nissen joining the Board, David Epstein will step down as Chairman and from the Board. Mr. Epstein has been with the Company for five years and has seen the Company through important milestones with multiple phase 2 programs reporting positive data in large and unserved diseases and now wishes to focus on personal priorities. Mr. Epstein remains highly supportive of the Company and will continue as a consultant to the Company.
