BOSTON - Inhibikase Therapeutics, Inc. (NASDAQ:IKT), a clinical-stage pharmaceutical company, has disclosed the pricing of a private placement financing valued at approximately $110 million. The funds raised before placement agent fees and other offering expenses are intended to propel the initiation of a Phase 2b trial in pulmonary arterial hypertension (PAH) and support general corporate functions.
The financing round was spearheaded by new investor Soleus Capital and saw participation from a consortium of new investors, including Sands Capital, Fairmount, Blackstone (NYSE:BX) Multi-Asset Investing, Commodore Capital, Perceptive Advisors, ADAR1 Capital Management, BSQUARED Capital, Nantahala Capital, Stonepine Capital Management, and Spruce Street Capital.
Inhibikase is offering 58,310,000 shares of common stock and pre-funded warrants to purchase up to 21,985,000 shares of common stock, in addition to Series A-1 and Series B-1 warrants. The purchase price for each share of common stock and accompanying warrants is $1.37, whereas each pre-funded warrant and accompanying warrants is priced at $1.369. The pre-funded warrants are exercisable at any time after issuance and will not expire.
The Series A-1 and Series B-1 Warrants are set to become exercisable based on specific regulatory milestones and have exercise prices of $1.37 and $1.49 per share, respectively. The transaction is expected to close on October 21, 2024, subject to standard closing conditions, with Jefferies acting as the lead placement agent and Maxim Group LLC as a co-placement agent.
Concurrent with the financing, board members Ms. Gisele Dion and Dr. Paul Grint will resign, and four new directors will join the board. Roberto Bellini, Amit Munshi, Arvind Kush, and David Canner will assume positions, with Mr. Bellini serving as Independent Chairperson of the Board.
The securities offered in the private placement have not been registered under the Securities Act or any state securities laws and may not be sold in the United States without registration or an exemption from registration requirements. Inhibikase has committed to filing a registration statement with the SEC for the resale of shares issued in the private placement and shares issuable upon the exercise of the pre-funded warrants and accompanying warrants within 30 days after the closing of the private placement.
Inhibikase specializes in developing Abelson Tyrosine Kinase inhibitor therapeutics for cardiopulmonary and neurodegenerative diseases. Its product pipeline includes risvodetinib for neurodegenerative diseases and IkT-001Pro, a prodrug of imatinib mesylate, for PAH.
This article is based on a press release statement from Inhibikase Therapeutics.
In other recent news, Inhibikase Therapeutics reported a net loss of $5.0 million for the second quarter, diverging from H.C. Wainwright's earlier estimate. Despite this, the company managed to raise $4 million in May, extending its cash runway to December 2024. The firm has adjusted its full-year 2024 earnings per share (EPS) forecast for Inhibikase to ($2.75), a decrease from the prior estimate of ($1.87), following the release of the company's second-quarter earnings report.
Furthermore, Inhibikase has completed enrollment for its Phase 2 trial of risvodetinib for Parkinson's disease, with top-line data expected in November. The company has also filed an Investigational New Drug (IND) application for a Pro drug formulation of imatinib mesylate for pulmonary arterial hypertension (PAH), intending to initiate clinical development later this year.
In addition, Inhibikase is exploring financial options for the risvo Multiple System Atrophy program and developing diagnostic tools. Despite financial constraints, the company plans to launch an open-label extension study for risdiplam in the near future. These developments represent recent progress in the company's operations.
H.C. Wainwright maintains a Buy rating on the stock, despite reducing the stock price target to $15.00 from the previous $23.00, reflecting a reassessment of the company's financial performance and future expectations.
InvestingPro Insights
As Inhibikase Therapeutics (NASDAQ:IKT) secures a substantial $110 million in private placement financing, it's crucial to examine the company's financial health and market position. According to InvestingPro data, IKT's market capitalization stands at a modest $8.88 million, reflecting its current status as a clinical-stage pharmaceutical company.
The recent financing round comes at a critical time for IKT. InvestingPro Tips reveal that the company is "quickly burning through cash" and "not profitable over the last twelve months." This context underscores the importance of the newly secured funds for advancing their clinical trials and supporting operations.
Despite these challenges, IKT maintains some financial strengths. An InvestingPro Tip indicates that the company "holds more cash than debt on its balance sheet," which could provide some financial flexibility as it pursues its ambitious clinical program in pulmonary arterial hypertension (PAH).
The company's revenue for the last twelve months as of Q2 2023 was reported at $0.08 million, with a significant revenue decline of 68.4% during this period. This aligns with the company's focus on research and development rather than current product sales, typical for clinical-stage biopharmaceutical firms.
It's worth noting that IKT's stock has shown volatility, with a 1-year price total return of 46.91%, contrasting with a 6-month return of -44.13%. This volatility reflects the high-risk, high-reward nature of investing in early-stage pharmaceutical companies.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing IKT's potential. There are 7 more InvestingPro Tips available for Inhibikase Therapeutics, providing a deeper dive into the company's financial health and market position.
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