Precision BioSciences Announces $40.0 Million Offering of Common Stock and Warrants
- Precision BioSciences (DTIL) is conducting a public offering of 2,500,000 shares of common stock and warrants.
- The offering is priced at $16.00 per share, with total gross proceeds of $40.0 million before underwriting discounts.
- Investors like Perceptive Advisors, Janus Henderson Investors, Aquilo Capital Management, and LYFE Capital are participating in the financing.
- The underwriter has a 30-day option to purchase up to an additional 375,000 shares of common stock and warrants.
- The offering is expected to close soon.
- None.
The capital raise by Precision BioSciences through the public offering of shares and warrants is a strategic move to bolster its financial position. The offering price of $16.00 per share alongside warrants exercisable at $20.00 suggests a potential for investor upside if the stock performs well. The gross proceeds of $40 million provide a significant infusion of capital that can be allocated towards research and development, particularly in enhancing the ARCUS® platform. The participation of notable life sciences investors like Perceptive Advisors and Janus Henderson Investors indicates a vote of confidence in Precision's technology and future prospects.
However, it is crucial to monitor the dilutive effect of such an offering on existing shareholders. The immediate exercisability of warrants could lead to further dilution if the stock price appreciates past the $20.00 exercise price. Investors should assess the company's growth trajectory and the potential of its gene editing therapies to justify the dilution. The long-term value created by the deployment of these funds into Precision's pipeline will be a determining factor in the offering's success.
The gene editing sector is highly competitive and capital-intensive, with significant investments required for research and development. Precision BioSciences' ARCUS® platform represents a differentiated technology in the space of in vivo gene editing. The success of this platform and its therapies hinges on not only scientific efficacy but also on navigating regulatory pathways and achieving market penetration. The additional funds could accelerate the company's clinical programs and potentially shorten the time to market.
From a market perspective, the exercise price of the warrants at $20.00, a 25% premium over the offering price, could indicate management's confidence in the company's future performance. It's also indicative of the risk-reward balance that investors are willing to engage with in the biotech sector. The response from the market following the closure of this offering will provide insights into investor sentiment regarding Precision's valuation and its technology's commercial viability.
The offering includes a 30-day option for the underwriter to purchase additional shares and/or warrants, which is a common practice in public offerings to cover over-allotments. This 'greenshoe' option provides a mechanism for the underwriter to stabilize the stock price post-offering if necessary. The legal structuring of this deal, including the immediate exercisability of the warrants, is designed to attract investors while providing the company with a potential future capital source if the warrants are exercised.
It is important to note that the transaction must comply with securities regulations, including the registration requirements of the Securities Act of 1933. The company's disclosures and compliance will be under scrutiny to ensure that all material information is accurately presented to potential investors. Any deviation from regulatory standards could have legal repercussions and impact investor confidence.
In addition, Precision BioSciences has granted the underwriter a 30-day option to purchase up to an additional 375,000 shares of its common stock and/or warrants to purchase up to 375,000 shares of common stock, at the combined public offering price and less underwriting discounts and commissions. The offering is expected to close on or about March 5, 2024, subject to customary closing conditions. All shares of common stock and accompanying warrants to be sold in the offering will be sold by Precision. Precision intends to use the net proceeds of the offering to help fund ongoing and planned research and development, and for working capital and general corporate purposes.
Guggenheim Securities, LLC is acting as sole book-running manager for the offering.
The securities described above were offered by means of a prospectus supplement dated March 1, 2024, and accompanying prospectus dated June 15, 2023, forming part of Precision’s effective shelf registration statement (File No. 333-272540). The prospectus supplement and accompanying prospectus relating to this offering will be filed with the
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, the securities in this offering in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Precision BioSciences, Inc.
Precision BioSciences, Inc. is an advanced gene editing company dedicated to improving life (DTIL) with its novel and proprietary ARCUS® genome editing platform that differs from other technologies in the way it cuts, its smaller size, and its simpler structure. Key capabilities and differentiating characteristics may enable ARCUS nucleases to drive more intended, defined therapeutic outcomes. Using ARCUS, Precision’s pipeline is comprised of in vivo gene editing candidates designed to deliver lasting cures for the broadest range of genetic and infectious diseases where no adequate treatments exist.
Forward-Looking Statements
Certain statements contained in this press release, including those relating to the timing and size of the offering, the grant of the option to purchase additional shares of common stock and/or warrants, the anticipated total gross proceeds from the offering and other statements relating to the proposed offering, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with the consummation of the proposed offering, uncertainties related to market conditions, the satisfaction of customary closing conditions related to the proposed offering, the completion of the offering on the anticipated terms or at all, general economic conditions and other risks identified from time to time in the reports Precision files with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and the preliminary prospectus supplement and accompanying prospectus related to the proposed offering to be filed with the SEC, which are available at www.sec.gov. The forward-looking statements in this press release speak only as of the date of this document, and Precision undertakes no obligation to update or revise any of the statements. Precision’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240301968620/en/
Naresh Tanna
Vice President of Investor Relations
Naresh.tanna@precisionbiosciences.com
Source: Precision BioSciences, Inc.
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