Tenax Therapeutics, Inc. (NASDAQ: TENX), a pharmaceutical company in Phase 3 development, announced on Monday the completion of a substantial private placement, raising around $100 million.
The investment will advance the Phase 3 development program for oral levosimendan (TNX-103), a potential treatment for Pulmonary Hypertension Due to Heart Failure with Preserved Ejection Fraction (PH-HFpEF).
The company is now funded through the completion of the ongoing Phase 3 LEVEL study, including its open label extension. The investment will also enable Tenax to initiate a second global Phase 3 study, with plans to submit the protocol for FDA comments, aiming to expedite the process towards a New Drug Application (NDA) submission.
The private placement attracted significant interest, becoming oversubscribed and led by new investor BVF Partners LP. Other new participants included Venrock Healthcare Capital Partners, Vivo Capital, and Janus Henderson Investors, among others.
President and CEO Chris Giordano expressed confidence in levosimendan's potential to benefit patients with PH-HFpEF, a condition that severely limits daily activity and lacks FDA-approved therapies. Levosimendan has shown promise in improving exercise tolerance, a critical aspect of patient quality of life.
The LEVEL study is designed to measure the impact of levosimendan on exercise ability, using the six-minute walk distance (6MWD) test over 12 weeks. Previous studies have indicated an approximate 10% improvement in 6MWD, positioning levosimendan as the first drug to demonstrate exercise improvement in HFpEF patients, with or without PH.
The private placement comprised of common stock and pre-funded warrants, with accompanying warrants to purchase additional shares. The securities were offered under Section 4(a)(2) of the Securities Act of 1933 and Regulation D, without registration under the Securities Act or any state securities laws.
Tenax has agreed to file a registration statement for the resale of these shares with the SEC within 30 days post-closing.
Levosimendan, initially developed by Orion Corporation, is an innovative drug that acts as a potassium ATP channel activator and calcium sensitizer with multiple mechanisms of action. It has been authorized for use in hospitalized patients with acutely decompensated heart failure in over 60 countries outside the United States.
Tenax Therapeutics amended its 2022 Stock Incentive Plan, increasing the number of shares authorized for issuance under the plan by 400,000 to a total of 400,688 shares. This change was first approved by the Board of Directors in March and was later confirmed by stockholders at the annual meeting.
Tenax has also modified the employment agreement with its Chief Medical Officer, Dr. Stuart Rich, transitioning him to a part-time role and adjusting his annual base salary from a previous $333,900. Furthermore, the company's shareholders elected directors for a one-year term expiring in 2025 and ratified Cherry Bekaert LLP as the independent registered public accounting firm for the year ending December 31, 2024.
InvestingPro Insights
As Tenax Therapeutics, Inc. (NASDAQ: TENX) secures a significant investment to propel its Phase 3 development program forward, a glance at the company's financial health and market performance provides context for investors monitoring the situation. With a market capitalization of just under $8 million, Tenax is a smaller player in the pharmaceutical industry, reflecting a potential high-risk, high-reward scenario for investors.
An InvestingPro Tip highlights that Tenax holds more cash than debt on its balance sheet, which is a positive sign for the company's financial stability, especially considering the significant costs associated with clinical trials. Additionally, the company has seen a significant return over the last week, with a 38.7% increase in price total return, signaling a positive market reaction to recent developments.
InvestingPro Data reveals a challenging profitability outlook, with a negative P/E ratio of -0.22, indicating that the company is not currently making a profit. Moreover, the adjusted P/E ratio for the last twelve months, as of Q1 2024, is even lower at -0.78. The company's operating income, adjusted for the same period, stands at a loss of $10.6 million, further underscoring the financial hurdles it faces.
For investors interested in further details on Tenax's financial metrics and market performance, InvestingPro offers additional tips, providing a more in-depth analysis. Currently, there are 12 additional InvestingPro Tips available that cover various aspects of Tenax's business and stock performance, which can be accessed for more comprehensive investment considerations.
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