WORCESTER, Mass. - Mustang Bio , Inc. (NASDAQ:MBIO), a clinical-stage biopharmaceutical company, announced today the exercise of warrants for the purchase of approximately 16.9 million shares of common stock, expected to generate gross proceeds of around $4 million. The exercised warrants, priced at $0.237 per share, were originally issued in May 2024.
The transaction is set to close on or about October 25, 2024, subject to customary closing conditions. H.C. Wainwright & Co. is serving as the exclusive placement agent for the offering.
In addition to the warrant exercise, Mustang Bio will issue new unregistered warrants for the purchase of up to approximately 33.8 million shares of common stock. These new warrants will be exercisable at $0.27 per share upon stockholder approval, with half of them valid for five years and the other half for twelve months from the approval date.
The company plans to use the net proceeds for working capital and general corporate purposes. The new warrants and the shares of common stock issuable upon their exercise have not been registered under the Securities Act of 1933, as amended, and are being offered in a private placement under Section 4(a)(2) and Regulation D promulgated thereunder.
Mustang Bio has committed to file a registration statement with the Securities and Exchange Commission to cover the resale of the shares of common stock issuable upon the exercise of the new warrants.
This announcement follows Mustang Bio's strategy to leverage medical breakthroughs in cell therapies to potentially cure difficult-to-treat cancers. The company collaborates with top medical institutions to advance the development of CAR-T therapies. Mustang Bio was founded by Fortress Biotech, Inc. (NASDAQ:FBIO).
The information provided is based on a press release statement from Mustang Bio, Inc. and does not serve as an offer to sell or a solicitation of an offer to buy securities.
In other recent news, biopharmaceutical company Fortress Biotech has secured approximately $8 million from stock sales and private placements. The funds are expected to support operations such as research and development, clinical trials, and potential acquisitions. Concurrently, Fortress Biotech has entered into a new $50 million loan agreement with Oaktree Capital Management, further enhancing the company's capital flexibility.
The company has also reported a second-quarter revenue of $14.9 million, slightly surpassing consensus forecasts. In response to these developments, Roth/MKM analysts have raised Fortress Biotech's price target from $10.00 to $13.00, maintaining a Buy rating.
Fortress Biotech's subsidiary, Mustang Bio, has announced a stock offering and private placement expected to yield approximately $2.5 million. The company also reported positive results from a Phase 1/2 clinical trial of MB-106, a CAR T-cell therapy for a rare blood cancer. These developments, along with three major drug approvals anticipated in the near future, mark ongoing activities within Fortress Biotech.
InvestingPro Insights
As Mustang Bio, Inc. (MBIO) moves forward with its warrant exercise to raise capital, it's worth noting some key financial insights about its parent company, Fortress Biotech, Inc. (FBIO). According to InvestingPro data, FBIO's market capitalization stands at $48.1 million, reflecting its position as a small-cap biopharmaceutical company.
Despite FBIO's revenue growth of 31.68% over the last twelve months as of Q2 2024, the company faces significant financial challenges. An InvestingPro Tip highlights that FBIO is "quickly burning through cash," which aligns with Mustang Bio's recent efforts to raise funds through warrant exercises. This cash burn rate is a critical factor for investors to consider, especially in the context of biopharmaceutical companies that often require substantial capital for research and development.
Another InvestingPro Tip indicates that FBIO "suffers from weak gross profit margins." This is corroborated by the InvestingPro data showing a negative gross profit margin of -18.27% for the last twelve months as of Q2 2024. This financial metric underscores the challenges faced by both Fortress Biotech and its subsidiaries like Mustang Bio in achieving profitability in the competitive biopharmaceutical sector.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for FBIO, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.