eFFECTOR Therapeutics Announces Closing of $15 Million Registered Direct Offering Priced At-The-Market Under Nasdaq Rules
eFFECTOR Therapeutics, Inc. (NASDAQ: EFTR) has completed a registered direct offering, selling 1,488,834 shares of its common stock and short-term warrants to purchase an additional 1,488,834 shares. The offering generated approximately $15 million in gross proceeds, with H.C. Wainwright & Co. acting as the exclusive placement agent. The Company plans to utilize the funds for general corporate and working capital purposes, including research and development.
The registered direct offering by eFFECTOR Therapeutics, Inc. represents a strategic capital raise aimed at bolstering the company's financial position. The gross proceeds of approximately $15 million, before fees and expenses, are significant for a biopharmaceutical company of eFFECTOR's size. The offering price of $10.075 per share, coupled with the immediate exercisability of the short-term warrants at $9.95 per share, suggests a confidence in the company's future prospects, as well as a willingness of the new healthcare-focused institutional investor to engage at a price close to market value.
From a financial perspective, the dual infusion of capital—initially from the share offering and potentially from the warrant exercises—provides eFFECTOR with a more robust balance sheet. This can be critical for funding ongoing research and development activities, which are essential for a company in the clinical stage of drug development. The use of a 'shelf' registration statement expedites the offering process, allowing for a timely capital increase to support the company's operations without significant delays.
For stakeholders, the immediate impact is the dilution of existing shares, which can affect the stock price. However, in the long-term, if the capital is deployed effectively towards advancing the company's STRIs, it could lead to value creation through potential clinical successes and partnerships. The key for investors is to monitor how efficiently the raised capital is utilized in the company's growth strategy.
Selective translation regulator inhibitors (STRIs) are an emerging class of therapeutics in oncology, with the potential to target specific cancer-causing proteins at the level of mRNA translation. eFFECTOR's focus on this area is indicative of their commitment to novel cancer treatments. The successful capital raise provides the necessary funds to advance their STRI candidates through the costly and time-consuming phases of clinical trials.
The R&D funding is crucial not only for the development of their existing drug pipeline but also for exploring new indications for their STRIs. The ability to progress through clinical milestones can significantly impact the company's valuation and attractiveness to potential partners or acquirers. For the medical community and patients, advancements in this therapeutic area could mean more effective and targeted cancer treatments, addressing unmet medical needs.
Given the high risk and high reward nature of biopharmaceutical R&D, the additional capital also serves as a risk mitigation tool, allowing eFFECTOR to navigate the uncertainties of clinical development without the immediate pressure of fundraising.
The biopharmaceutical sector is highly competitive, with many companies vying for investment to support their drug development programs. eFFECTOR's ability to secure a direct offering with a healthcare-focused institutional investor demonstrates market confidence in their strategic direction and the potential of their STRI technology. The offering's structure, including short-term warrants, reflects an investment mechanism tailored to attract capital while providing investors with an opportunity to increase their stake at a predetermined price.
Analyzing the broader market impact, this transaction could signal to other market participants that there is investor appetite for innovative oncology therapeutics. This could have a ripple effect, encouraging similar companies to pursue additional funding for their projects. However, eFFECTOR's future market performance will largely depend on its clinical trial outcomes and the competitive landscape of cancer therapies.
It is important for stakeholders to consider the implications of the capital raise in the context of the company's operational burn rate, pipeline progression and the potential for strategic collaborations or licensing deals that may arise as a result of enhanced financial stability.
01/29/2024 - 04:05 PM
SOLANA BEACH, Calif. and REDWOOD CITY, Calif., Jan. 29, 2024 (GLOBE NEWSWIRE) -- eFFECTOR Therapeutics, Inc. (NASDAQ: EFTR) (the “Company”), a leader in the development of selective translation regulator inhibitors (“STRIs”) for the treatment of cancer, today announced that it has closed its previously announced registered direct offering with a new healthcare focused institutional investor for the purchase and sale of an aggregate of 1,488,834 shares of its common stock (or common stock equivalents in lieu thereof) and short-term warrants to purchase up to an aggregate of 1,488,834 shares of its common stock at an offering price of $10.07 5 per share of common stock (or common stock equivalent in lieu thereof) and accompanying short-term warrant priced at-the-market under Nasdaq rules. The short-term warrants are exercisable immediately upon issuance, have an exercise price of $9.95 per share and expire three and one-half years from the date of issuance.
H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.
The gross proceeds to the Company from the offering were approximately $15 million , before deducting the placement agent’s fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from this offering, together with its existing cash and cash equivalents and short-term investments, for general corporate and working capital purposes, including funding its research and development. Upon the exercise in full for cash of the short-term warrants, if any, the Company would expect to receive approximately $15 million in additional gross proceeds.
The securities described above were offered and sold by the Company in a registered direct offering pursuant to a “shelf” registration statement on Form S-3 (File No. 333-267221) that was originally filed with the Securities and Exchange Commission (the “SEC”) on September 1, 2022 and became effective on September 9, 2022. The offering of such securities in the registered direct offering was made only by means of a base prospectus and prospectus supplement that forms a part of the effective registration statement. A prospectus supplement and the accompanying base prospectus relating to the registered direct offering was filed with the SEC and is available on the SEC’s website at www.sec.gov. Electronic copies of the prospectus supplement and the accompanying base prospectus may also be obtained from H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About eFFECTOR Therapeutics
Forward-Looking Statements
What is the ticker symbol for eFFECTOR Therapeutics, Inc.?
The ticker symbol for eFFECTOR Therapeutics, Inc. is EFTR.
How many shares were sold in the registered direct offering?
eFFECTOR Therapeutics, Inc. sold 1,488,834 shares of its common stock in the offering.
What was the offering price per share of common stock in the direct offering?
The offering price per share of common stock in the direct offering was $10.075.
Who acted as the exclusive placement agent for the offering?
H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.
What is the intended use of the net proceeds from the offering?
The Company intends to use the net proceeds for general corporate and working capital purposes, including funding its research and development.
