BCYC - Bicycle Therapeutics Boosts Balance Sheet To Navigate Data Desert

2024-05-24 12:59:33 ET

Summary

• Bicycle Therapeutics plc has just completed a $555 million private placement equity financing, giving the company approximately $1 billion in cash.
• The company retains partnerships with major pharmaceutical companies, including Roche, Novartis, Bayer, Ionis, and Cancer Research UK.
• Bicycle's lead asset, BT8009, is in a Phase 2/3 trial for metastatic urothelial cancer and has the potential to be a superior drug to Padcev in the bladder cancer setting.
• Bicycle is developing a drug class that it hopes might one day be comparable to antibody drug conjugates, one of the hottest properties in biotech today.
• It may take years before conclusive data is available, however, and upcoming catalysts don't offer much hope for share price upside, given their early-stage nature.

Investment Overview

I covered Bicycle Therapeutics plc ( BCYC ) in some detail in a July 2023 post for Seeking Alpha readers. At that time, the company was looking to complete a $200m offering of ADR shares. I gave the company a "Buy" rating, concluding as follows:

Investors will suffer some dilution when the issuance is complete, and Bicycle stock may drop a little further, but for a company with as many opportunities in play as Bicycle has, with a shot at a potential approval for drugs indicated for both ovarian and urothelial cancers for its wholly-owned assets leading the way, supported by credible, if inconclusive data, and plenty of assets set to enter the clinic in the coming years, it's not hard to be intrigued by the possibilities.

With its current market cap of $740m, plenty of funding in place, numerous partners pledging "biobucks" in the multi-billions, and with some crucial data readouts arriving this year, I would make Bicycle a high risk opportunity, but an opportunity nonetheless.

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