Eledon Pharmaceuticals Announces Pricing of $85 Million Underwritten Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

Eledon Pharmaceuticals announced the pricing of an $85 million underwritten offering, consisting of 18,356,173 shares of common stock at $3.65 per share and pre-funded warrants for 4,931,507 shares at $3.649 with a $0.001 exercise price. The offering, expected to close around October 30, 2024, includes participation from notable investors like BVF Partners LP, RA Capital Management, and others. The proceeds will be used to advance Eledon's pipeline and for working capital. Leerink Partners is acting as sole book-running manager, with Noble Capital Markets as financial advisor.

Positive

• Secured substantial $85 million in gross proceeds through offering
• Strong participation from prominent healthcare investors
• Immediate capital availability through pre-funded warrants structure

Negative

• Potential dilution for existing shareholders due to new share issuance
• Stock offering priced at $3.65 may impact market price

Insights

Financial Analyst

This $85 million capital raise represents a significant financing event for Eledon Pharmaceuticals, with shares priced at $3.65 and backed by notable healthcare investors. The deal structure includes both common stock (78.8%) and pre-funded warrants (21.2%), providing flexibility for certain investors while minimizing immediate dilution. The impressive roster of participating investors, including BVF Partners, RA Capital and Frazier Life Sciences, adds credibility to the raise and suggests strong institutional confidence in Eledon's pipeline. With a current market cap of about $150 million, this financing substantially bolsters the company's cash position and extends their operational runway. The pricing shows a relatively modest discount to recent trading levels, indicating healthy demand for the offering.

Market Research Analyst

The successful completion of this large financing round demonstrates strong market confidence in Eledon's potential, particularly notable given current challenging biotech market conditions. The participation of multiple tier-1 healthcare investors provides significant validation of the company's strategy and pipeline potential. The pre-funded warrant structure, commonly used in biotech financings, helps accommodate investors with ownership limitations while providing immediate capital access. This raise positions Eledon well against peers, with a strengthened balance sheet and expanded institutional shareholder base that could improve trading liquidity and market visibility going forward.

IRVINE, Calif., Oct. 29, 2024 (GLOBE NEWSWIRE) -- Eledon Pharmaceuticals, Inc. (“Eledon”) (NASDAQ: ELDN), today announced the pricing of its underwritten offering of (i) 18,356,173 shares of its common stock at a price of $3.65 per share and (ii) pre-funded warrants to purchase up to an aggregate of 4,931,507 shares of common stock at a price of $3.649 per pre-funded warrant. The pre-funded warrants will be immediately exercisable and will have an exercise price of $0.001 per share. The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, are expected to be approximately $85 million. All of the shares of common stock and pre-funded warrants in the offering are to be sold by Eledon. The offering is expected to close on or about October 30, 2024, subject to the satisfaction of customary closing conditions.

The financing includes participation from new and existing investors, including BVF Partners LP, RA Capital Management, Frazier Life Sciences, Blue Owl Healthcare Opportunities, First Light Asset Management, Sphera Healthcare, Woodline Partners LP, Nantahala Capital and T1D Fund: A Breakthrough T1D Venture.

Leerink Partners is acting as sole book-running manager for the offering. Noble Capital Markets Inc. is acting as financial advisor.

Eledon currently intends to use the net proceeds from this offering to advance its pipeline and for working capital and general corporate purposes.

The offering is being made pursuant to a registration statement on Form S-3 (File No. 333-282260), previously filed with the Securities and Exchange Commission (the “SEC”) on September 20, 2024 and declared effective on October 2, 2024. The offering is being made only by means of a prospectus and prospectus supplement that form a part of the registration statement. A preliminary prospectus supplement and final prospectus supplement relating to the offering will be filed with the SEC and available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and final prospectus supplement and the accompanying prospectus, once available, may also be obtained by contacting Leerink Partners LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, Massachusetts 02109, by telephone at (800) 808-7525, ext. 6105, or by email at syndicate@leerink.com.

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 state or 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 jurisdiction.

About Eledon Pharmaceuticals and tegoprubart

Eledon Pharmaceuticals, Inc. is a clinical stage biotechnology company that is developing immune-modulating therapies for the management and treatment of life-threatening conditions. Eledon’s lead investigational product is tegoprubart, an anti-CD40L antibody with high affinity for the CD40 Ligand, a well-validated biological target that has broad therapeutic potential. The central role of CD40L signaling in both adaptive and innate immune cell activation and function positions it as an attractive target for non-lymphocyte depleting, immunomodulatory therapeutic intervention. Eledon is building upon a deep historical knowledge of anti-CD40 Ligand biology to conduct preclinical and clinical studies in kidney allograft transplantation, xenotransplantation, and amyotrophic lateral sclerosis (ALS). Eledon is headquartered in Irvine, California.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties, including statements regarding Eledon’s expectations on the timing and completion of the offering and the anticipated use of proceeds therefrom. No assurance can be given that the offering will be completed on the terms described. Forward-looking statements are inherently uncertain and are subject to numerous risks and uncertainties, including market conditions, failure of customary closing conditions and the risk factors and other matters set forth in the final prospectus supplement and accompanying prospectus that will be included in the registration statement. Additional risks and uncertainties that could cause Eledon’s actual results to differ materially from the forward-looking statements contained herein are discussed in the company’s quarterly 10-Qs, annual 10-K, and other filings with the SEC, which can be found at www.sec.gov. Any forward-looking statements contained in this press release speak only as of the date hereof and not of any future date, and the company expressly disclaims any intent to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:

Stephen Jasper
Gilmartin Group
(858) 525 2047
stephen@gilmartinir.com

Media Contact:

Jenna Urban
Berry & Company Public Relations
(212) 253 8881
jurban@berrypr.com

Source: Eledon Pharmaceuticals

FAQ

How much did Eledon Pharmaceuticals (ELDN) raise in their October 2024 offering?

Eledon Pharmaceuticals raised approximately $85 million in gross proceeds through an underwritten offering of common stock and pre-funded warrants.

What is the price per share for Eledon's (ELDN) October 2024 stock offering?

The common stock was priced at $3.65 per share, while pre-funded warrants were priced at $3.649 per warrant.

How will Eledon Pharmaceuticals (ELDN) use the proceeds from their 2024 offering?

Eledon intends to use the net proceeds to advance their pipeline and for working capital and general corporate purposes.

Who are the major investors in Eledon's (ELDN) October 2024 offering?

Major investors include BVF Partners LP, RA Capital Management, Frazier Life Sciences, Blue Owl Healthcare Opportunities, and several other prominent healthcare investors.