WINSTON-SALEM, N.C. - ProKidney Corp. (NASDAQ:PROK), a company specializing in cellular therapies for chronic kidney disease, announced today the launch of a dual offering of its Class A ordinary shares, aiming to raise an aggregate of $125 million, excluding underwriting discounts and other related expenses. The offering includes an underwritten public offering and a concurrent registered direct offering.
Investment entities with ties to ProKidney's chairman and major stockholders have signaled their interest in participating in the offerings. However, these indications are not binding commitments, leaving the final allocation of shares to the discretion of the company and underwriters.
ProKidney has also proposed a 30-day option for underwriters to purchase an additional 15% of the shares sold in the public offering. The offerings are structured to proceed independently, with neither being contingent on the completion of the other.
The company intends to utilize the net proceeds from the offerings to fund clinical trial costs, research and development, investments in drug development platforms, pre-commercial and commercial activities, and its commercial manufacturing facility. Additional general corporate purposes cited include working capital, capital expenditures, and administrative expenses.
Jefferies, J.P. Morgan, and Guggenheim Securities are serving as joint book-running managers for the public offering, with PJT Partners (NYSE:PJT) acting as a co-manager and financial advisor to ProKidney.
ProKidney's lead product candidate, rilparencel, has been granted Regenerative Medicine Advanced Therapy (RMAT) designation and is currently in Phase 3 clinical trials to assess its potential to preserve kidney function in diabetic patients at risk of kidney failure.
The offerings are subject to customary closing conditions and market factors. The preliminary prospectus supplements for the offerings are available on the SEC's website and from the respective managing firms.
This news is based on a press release statement from ProKidney Corp. and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, ProKidney Corp. announced positive interim results from its Phase 2 REGEN-007 trial, testing the renal autologous cell therapy, rilparencel. The trial showed stabilization of kidney function in patients with chronic kidney disease caused by diabetes. In addition, BofA Securities revised upwards the earnings and revenue forecasts for ProKidney's cell therapy drug, REACT, due to new data suggesting increased market potential, now expecting peak sales to reach $1.8 billion.
Simultaneously, ProKidney has been assigned a Buy rating and a $6.00 price target by BTIG, emphasizing the drug's potential in treating severe diabetic chronic kidney disease. BTIG also anticipates positive outcomes from the Phase 2 REGEN-007 study, which will support the success of the subsequent Phase 3 PROACT 1 & 2 studies.
ProKidney has also expanded its executive team with two key appointments aimed at advancing its Phase 3 clinical program and preparing for future product commercialization. These are recent developments for the company, and it's crucial to note that these updates are based on press release statements from ProKidney and independent analysis from BofA Securities and BTIG.
InvestingPro Insights
As ProKidney Corp. (NASDAQ:PROK) embarks on raising capital through its dual offering, investors are evaluating the company's financial health and market performance. Notably, ProKidney's management has demonstrated confidence in the company's prospects by aggressively buying back shares. Additionally, the company maintains a stronger liquidity position, with cash reserves surpassing its debt load.
However, it is essential to consider that ProKidney's cash burn rate is elevated, which may be a factor as the company funds its clinical trials and research activities. Moreover, the firm's gross profit margins have been under pressure, and analysts do not expect profitability within this fiscal year. The company's net income is also projected to decline over the next twelve months.
On the market performance front, ProKidney's stock has experienced significant volatility. While the price has declined by 73.55% from its 52-week high, it has shown a strong recovery in the short term, with a 13.52% return over the last month and an impressive 91.59% return over the last three months. The company's market capitalization currently stands at $203.92 million, and its adjusted P/E ratio is -5.78, reflecting the market's expectations of future earnings growth.
For those interested in a deeper dive into ProKidney's financials and stock performance, there are additional InvestingPro Tips available, including insights on the company's return on assets and fair value estimates. Subscribers can access these tips and more by visiting https://www.investing.com/pro/PROK. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 13 additional InvestingPro Tips available, investors can gain a comprehensive understanding of ProKidney's investment potential.
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