Elicio Therapeutics Announces $7.0 Million Private Placement Financing

Rhea-AI Summary

Elicio Therapeutics, Inc. (Nasdaq: ELTX) has entered into a subscription agreement to sell 1,213,000 shares of its common stock at a purchase price of $5.81 per share in a private placement to GKCC, LLC, controlled by a member of Elicio’s Board of Directors. The gross proceeds of the private placement are expected to be approximately $7.0 million, with the net proceeds intended for the advancement of its development pipeline, as well as for working capital and general corporate purposes.

Financial Analyst

The private placement of 1,213,000 shares by Elicio Therapeutics at $5.81 per share, amounting to gross proceeds of approximately $7.0 million, represents a strategic capital infusion aimed at funding the company's development pipeline. This transaction is noteworthy as it involves an entity controlled by a board member, which may raise questions about potential conflicts of interest, but also implies a strong vote of confidence from within the company's leadership.

Financially, this move is expected to bolster Elicio's working capital, providing more flexibility in its operations and possibly extending its runway to achieve its research and development milestones. For investors, this could mean a dilution of current share value but also an opportunity for the company to potentially increase its market value through successful pipeline advancements. The fact that the securities have not been registered under the Securities Act indicates that they are subject to resale restrictions, which could influence their liquidity and marketability.

Medical Research Analyst

The allocation of proceeds towards the advancement of Elicio's immunotherapy pipeline is a critical component of this announcement. Immunotherapies represent a rapidly evolving field in oncology, with the potential to revolutionize cancer treatment. By channeling funds into research and development, Elicio is aiming to capitalize on this burgeoning market.

From a research perspective, the success of such therapies can be transformative for patients and can lead to significant market share in the oncology sector. However, the high costs associated with drug development and the inherent risks of clinical trials must be considered. The company's ability to navigate the complex regulatory landscape, including the commitment to file a registration statement for the resale of shares, will be crucial for its long-term success and for ensuring regulatory compliance.

Industry Analyst

The biotechnology sector is highly competitive, with many firms vying for a share of the lucrative cancer treatment market. Elicio's focus on novel immunotherapies places it within a niche that has seen significant investor interest due to the high potential for breakthrough therapies. The private placement could be interpreted as a strategic move to secure funding without the immediate pressures of public market fluctuations.

However, the involvement of an insider entity in the private placement may be scrutinized for governance implications and how it is perceived by the wider investment community could impact the company's reputation and investor relations. It is essential for stakeholders to monitor the deployment of the raised capital towards the stated objectives and the subsequent impact on Elicio's clinical trial progress and overall business trajectory.

BOSTON, Dec. 22, 2023 (GLOBE NEWSWIRE) -- Elicio Therapeutics, Inc. (Nasdaq: ELTX, “Elicio Therapeutics” or “Elicio”), a clinical-stage biotechnology company developing a pipeline of novel immunotherapies for the treatment of cancer, announced today that it has entered into a subscription agreement to sell 1,213,000 shares of its common stock at a purchase price of $5.81 per share in a private placement to GKCC, LLC. GKCC, LLC is an entity controlled by a member of Elicio’s Board of Directors. Gross proceeds of the private placement are expected to be approximately $7.0 million, before deducting expenses. The private placement is expected to close on December 22, 2023, subject to the satisfaction of customary closing conditions.

Elicio intends to use the net proceeds for the advancement of its development pipeline, as well as for working capital and general corporate purposes.

The securities being issued and sold in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws and may not be reoffered or resold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. As part of the subscription agreement, Elicio has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the "SEC") registering the resale of the shares of common stock issued in this private placement (the "Resale Shares").

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of the securities being offered 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 jurisdiction. Any offering of the Resale Shares under the resale registration statement will only be by means of a prospectus.

About Elicio Therapeutics

Elicio Therapeutics is a clinical-stage biotechnology company developing a pipeline of novel immunotherapies for the treatment of cancer. By combining expertise in immunology and immunotherapy, Elicio is engineering investigational Amphiphile (“AMP”) immunotherapies intended to precisely target and fully engage the lymph nodes, the site in our bodies where the immune response is orchestrated. Elicio is engineering lymph node-targeted AMPlifiers, immunomodulators, adjuvants, and vaccines for an array of aggressive cancers.

Cautionary Note on Forward-Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Elicio undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors, including, but not limited to, Elicio’s financial condition, including its ability to obtain the funding necessary to advance the development of ELI-002 and any other future product candidates, and Elicio’s ability to continue as a going concern; estimates regarding future revenue, expenses, capital requirements and need for additional financing; and statements regarding the expected timing for the closing of the private placement and the expected use of proceeds from the private placement.

New factors emerge from time to time, and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks are more fully discussed in the Current Report on Form 8-K that was filed with the SEC on June 2, 2023, under the heading “Risk Factors” in Elicio’s Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and September 30, 2023, and any subsequent reports and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Elicio as of the date of this release. Elicio does not undertake any obligation to update such forward-looking statements to reflect events or circumstances after the date of this release, except to the extent required by law.

Media Contact
Kristin Politi
LifeSci Communications
kpoliti@lifescicomms.com
973-495-5221

Investor Relations Contact
Heather DiVecchia
Elicio Therapeutics
IR@elicio.com
857-209-0153

FAQ

What is the recent announcement from Elicio Therapeutics, Inc. (ELTX)?

Elicio Therapeutics, Inc. (Nasdaq: ELTX) has entered into a subscription agreement to sell 1,213,000 shares of its common stock at a purchase price of $5.81 per share in a private placement to GKCC, LLC, controlled by a member of Elicio’s Board of Directors.

What is the purpose of the private placement?

The net proceeds of the private placement are intended for the advancement of Elicio's development pipeline, as well as for working capital and general corporate purposes.

What is the expected gross proceeds from the private placement?

The gross proceeds of the private placement are expected to be approximately $7.0 million.

What will Elicio Therapeutics use the net proceeds for?

Elicio intends to use the net proceeds for the advancement of its development pipeline, as well as for working capital and general corporate purposes.

What are the details about the resale of the shares of common stock issued in this private placement?

As part of the subscription agreement, Elicio has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the 'SEC') registering the resale of the shares of common stock issued in this private placement.