Crinetics Pharmaceuticals Announces Proposed Public Offering of Common Stock

Rhea-AI Summary

Crinetics Pharmaceuticals (Nasdaq: CRNX), a clinical-stage pharmaceutical company focused on endocrine diseases and tumors, has announced a proposed public offering of common stock. The company aims to offer $400.0 million of shares, with an additional 30-day option for underwriters to purchase up to $60.0 million more. Leerink Partners and Morgan Stanley are acting as joint bookrunning managers.

The net proceeds will be used to fund research and development of clinical-stage product candidates, other research programs, pre-commercialization activities, and general corporate purposes. Crinetics may also consider using a portion for in-licensing, acquisitions, or investments in complementary businesses or technologies. The offering is subject to market conditions and there is no assurance of its completion or final terms.

Positive

• Potential to raise up to $460 million in capital through the public offering
• Funds to be used for research and development of clinical-stage product candidates
• Opportunity for expansion through potential acquisitions or investments in complementary businesses

Negative

• Potential dilution of existing shareholders' ownership
• Uncertainty regarding the completion and final terms of the offering
• Increased financial obligations and pressure to deliver results with the new capital

Insights

Financial Analyst

Crinetics Pharmaceuticals' proposed $400 million public offering of common stock, with an additional $60 million option for underwriters, is a significant capital-raising move. This offering could substantially bolster the company's financial position, potentially doubling its market cap of $4.14 billion.

The intended use of proceeds for research and development, pre-commercialization activities and general corporate purposes aligns with the company's clinical-stage focus. This capital infusion could accelerate product development and potentially bring therapies to market faster.

However, investors should note the dilutive effect on existing shareholders. The offering's size relative to the current market cap suggests a substantial increase in outstanding shares, which could pressure the stock price in the short term. Long-term value will depend on how effectively the company deploys this capital to advance its pipeline and create shareholder value.

The involvement of Leerink Partners and Morgan Stanley as joint bookrunners lends credibility to the offering, potentially attracting institutional investors. Overall, while dilutive, this move strengthens Crinetics' financial position and could catalyze growth if executed effectively.

Biotech Industry Specialist

This public offering signals a critical juncture for Crinetics Pharmaceuticals in its development trajectory. As a clinical-stage company focusing on endocrine diseases and tumors, securing substantial funding is important for advancing its pipeline.

The $400 million base offering, with a potential $60 million additional raise, provides significant runway for multiple clinical programs. This level of funding could support late-stage trials, which are typically the most capital-intensive phase of drug development.

Investors should pay attention to Crinetics' current cash position and burn rate to assess how this infusion extends their operational timeline. The mention of pre-commercialization activities suggests that the company may have promising candidates nearing market readiness.

The flexibility to use funds for in-licensing or acquisitions is noteworthy, indicating potential for pipeline expansion or technology acquisition. This could diversify risk and enhance long-term prospects.

While dilution is a concern, biotech investors often prioritize clinical progress and cash runway over short-term equity metrics. The market's reaction will likely hinge on investor confidence in Crinetics' pipeline and management's ability to efficiently allocate capital.

SAN DIEGO, Oct. 08, 2024 (GLOBE NEWSWIRE) -- Crinetics Pharmaceuticals, Inc. (Nasdaq: CRNX), a clinical-stage pharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for endocrine diseases and endocrine-related tumors, announced today that it intends to offer and sell, subject to market and other conditions, $400.0 million of shares of its common stock in a proposed underwritten public offering. In addition, Crinetics intends to grant the underwriters a 30-day option to purchase up to an additional $60.0 million of shares of common stock. All of the shares to be sold in the proposed offering are to be sold by Crinetics. There can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

Crinetics intends to use the net proceeds from the proposed offering, together with its existing cash, cash equivalents and investment securities, to fund research and development of its clinical-stage product candidates, other research programs, pre-commercialization activities and other general corporate purposes, which may include, among other things, capital expenditures or working capital. Crinetics may also use a portion of the remaining net proceeds, together with its existing cash, cash equivalents and investment securities, to in-license, acquire, or invest in complementary businesses, technologies, products or assets; however, it has no current commitments or obligations to do so.

Leerink Partners and Morgan Stanley are acting as joint bookrunning managers for the proposed offering.

The securities described above are being offered by Crinetics pursuant to a shelf registration statement that became automatically effective upon its filing with the Securities and Exchange Commission (SEC). The proposed offering may be made only by means of a prospectus supplement and accompanying prospectus. A preliminary prospectus supplement and accompanying prospectus relating to this offering will be filed with the SEC. When available, copies of the preliminary prospectus supplement and the accompanying prospectus relating to this offering may be obtained from: Leerink Partners LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, MA 02109, by telephone at (800) 808-7525, ext. 6105, or by email at syndicate@leerink.com; or Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014, by email at prospectus@morganstanley.com. Electronic copies of the preliminary prospectus supplement and accompanying prospectus will also be available on the website of the SEC at www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Crinetics Pharmaceuticals

Crinetics Pharmaceuticals is a clinical stage pharmaceutical company focused on the discovery, development, and commercialization of novel therapeutics for endocrine diseases and endocrine-related tumors. Crinetics’ lead development candidate, paltusotine, is the first investigational once-daily, oral, selectively-targeted somatostatin receptor type 2 (SST2) nonpeptide agonist that has completed Phase 3 clinical development for acromegaly and is in Phase 2 clinical development for carcinoid syndrome associated with neuroendocrine tumors. Crinetics is also developing atumelnant (CRN04894), an investigational, first-in-class, oral ACTH antagonist, that is currently completing Phase 2 clinical studies for the treatment of congenital adrenal hyperplasia and Cushing’s disease. All of the company’s drug candidates are orally delivered, small molecule new chemical entities resulting from in-house drug discovery efforts, including additional discovery programs addressing a variety of endocrine conditions such as hyperparathyroidism, polycystic kidney disease, Graves’ disease (including thyroid eye disease), diabetes, obesity and GPCR-targeted oncology indications.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release are forward-looking statements, including statements relating to the offering, including the structure, timing, size and completion of the offering and the anticipated use of proceeds therefrom, and the grant of the option to purchase additional shares. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “upcoming” or “continue” or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, including the risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions related to the proposed public offering, the risks and uncertainties inherent in Crinetics’ business, including the risks and uncertainties described in the company’s periodic filings with the SEC. The events and circumstances reflected in the company’s forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Additional information on risks facing Crinetics can be found under the heading “Risk Factors” in Crinetics’ periodic filings with the SEC, including its annual report on Form 10-K for the year ended December 31, 2023 and quarterly report on Form 10-Q for the quarter ended March 31, 2024, and in the preliminary prospectus supplement related to the proposed offering to be filed with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by applicable law, Crinetics does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Contacts

Investors: 
Gayathri Diwakar
Head of Investor Relations
gdiwakar@crinetics.com
(858) 345-6340

Media:
Natalie Badillo
Head of Corporate Communications
nbadillo@crinetics.com
(858) 345-6075 

FAQ

How much is Crinetics Pharmaceuticals (CRNX) planning to raise in its public offering?

Crinetics Pharmaceuticals is planning to offer $400.0 million of common stock, with an additional option for underwriters to purchase up to $60.0 million more, potentially raising up to $460 million in total.

What will Crinetics Pharmaceuticals (CRNX) use the proceeds from the public offering for?

The company intends to use the net proceeds to fund research and development of clinical-stage product candidates, other research programs, pre-commercialization activities, and general corporate purposes. They may also consider using a portion for in-licensing, acquisitions, or investments in complementary businesses.

Who are the joint bookrunning managers for Crinetics Pharmaceuticals' (CRNX) proposed public offering?

Leerink Partners and Morgan Stanley are acting as joint bookrunning managers for the proposed public offering of Crinetics Pharmaceuticals.

Is the completion of Crinetics Pharmaceuticals' (CRNX) public offering guaranteed?

No, the completion of the offering is not guaranteed. The press release states that there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.