First Wave BioPharma, Inc. to Raise Approximately $4.0 Million of Gross Proceeds in Registered Direct Offering
First Wave BioPharma, Inc. announces a registered direct offering and concurrent private placement to raise approximately $4.0 million for working capital and general corporate purposes. The Company will sell 525,625 shares of common stock at $7.61 per share, with warrants to purchase additional shares at $7.48 per share.
From a financial perspective, the direct offering by First Wave BioPharma represents a strategic move to bolster its capital reserves. By issuing new shares and warrants, the company is raising approximately $4.0 million, which is a significant infusion of funds for a clinical-stage biopharmaceutical company. This capital is essential for maintaining operations, advancing clinical trials and ensuring the company can meet its short-term financial obligations.
Investors should note that direct offerings can dilute existing shareholders' equity, but they also provide companies with the necessary capital without incurring debt. The exercise price of the warrants at $7.48, which is slightly below the offering price of the shares, could be an incentive for investors to potentially participate in the company's growth. However, the impact on the stock's performance will depend on the market's perception of the company's potential to generate value from its GI disease therapies.
In the biotechnology sector, non-systemic therapies for GI diseases are an area of significant interest due to the large patient populations and unmet medical needs. First Wave BioPharma's focus on this segment indicates a targeted approach to address these conditions. The success of their clinical trials and subsequent FDA approval could lead to substantial market opportunities.
However, the competitive landscape in biotech is fierce and the company's ability to navigate clinical trials, regulatory hurdles and eventually commercialization will be critical. The raised capital might help accelerate their research and development, but the long-term success will hinge on their clinical outcomes and the ability to scale effectively.
For stakeholders, the timing and conditions of the securities offering are crucial. The immediate exercisability of the warrants provides a potential for short-term liquidity events, which might be attractive for some investors. However, the five-year term also suggests a longer-term commitment to the company's trajectory.
Investors should evaluate the company's pipeline, current cash burn rate and the potential of their GI therapies in the context of the broader healthcare market. While the gross proceeds seem modest, they could be sufficient for a clinical-stage company if managed efficiently. The decision by Roth Capital Partners to act as the exclusive placement agent might also signal confidence in the company's prospects, which is a factor investors could consider.
03/04/2024 - 08:00 AM
BOCA RATON, Fla., March 04, 2024 (GLOBE NEWSWIRE) -- First Wave BioPharma, Inc., (NASDAQ: FWBI), (“First Wave BioPharma” or the “Company”), a clinical-stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases, announced today that it has entered into a definitive securities purchase agreement with a certain institutional investor for the purchase and sale of 525,625 shares of the Company's common stock (or common stock equivalents) at a price of $7.61 per share in a registered direct offering.
In addition, in a concurrent private placement, the Company will issue to the investors warrants to purchase up to 525,625 shares of common stock. The warrants have an exercise price of $7.48 per share, will be exercisable immediately following the date of issuance and will have a term of five years following the date of issuance.
Roth Capital Partners is acting as the exclusive placement agent for the offering.
The gross proceeds to the Company from this offering are expected to be approximately $4.0 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 for working capital and general corporate purposes. The closing of the offering is expected to occur on or about March 6, 2024, subject to the satisfaction of customary closing conditions.
The shares in the offering described above are being offered by the Company pursuant to a 'shelf' registration statement on Form S-3 (File No. 333-256476) previously filed with the Securities and Exchange Commission (the 'SEC') and declared effective by the SEC on June 2, 2021. The offering is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement, relating to the offering that will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC's website at http://www.sec.gov or by contacting Roth Capital Partners, LLC at 888 San Clemente Drive, Newport Beach CA 92660, by phone at (800) 678-9147 or by accessing the SEC’s website, www.sec.gov.
This press release shall not constitute an offer to sell or the 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 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 First Wave BioPharma, Inc.
First Wave BioPharma is a clinical-stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases. The Company is currently advancing a therapeutic development pipeline with multiple late-stage clinical programs built around three proprietary technologies – Capeserod, a selective 5-HT4 receptor partial agonist which First Wave will develop for gastrointestinal (GI) indications; the biologic Adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients in cystic fibrosis and chronic pancreatitis patients with exocrine pancreatic insufficiency; and Niclosamide, an oral small molecule with anti-inflammatory properties for patients with inflammatory bowel diseases such as ulcerative colitis and Crohn’s disease. The Company announced that is currently in negotiations for a definitive agreement for a potential business combination with ImmunogenX, Inc. to develop its Phase 3-ready Latiglutenase, a potentially first-in-class, targeted, oral biotherapeutic for celiac disease. First Wave BioPharma is headquartered in Boca Raton, Florida. For more information visit www.firstwavebio.com.
Forward-Looking Statements
This press release may contain certain statements relating to future results which are forward-looking statements. These forward-looking statements are subject to risks and uncertainties including, among other things, the completion of the registered direct offering, the satisfaction of customary closing conditions related to the registered direct offering and the intended use of proceeds from the registered direct offering. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements, depending on factors including whether the sale of niclosamide, the potential transaction with ImmunogenX and any related financing or licensing transaction, or any other contemplated transaction, may be completed with different terms, in an untimely manner, or not at all; whether the Company will be able to realize the benefits of the proposed transactions described herein; the Company’s ability to integrate the assets and commercial operations contemplated to be acquired from ImmunogenX into the Company’s business; whether the closing conditions can be met or the definitive agreements can be executed for the sale of niclosamide, the transaction with ImmunogenX, any Related financing or licensing transaction, or any other contemplated transaction, whether results obtained in preclinical and nonclinical studies and clinical trials will be indicative of results obtained in future clinical trials; whether preliminary or interim results from a clinical trial will be indicative of the final results of the trial; whether the Company will be able to maintain compliance with Nasdaq’s continued listing criteria and the effect of a delisting from Nasdaq on the market for the Company’s securities; the size of the potential markets for the Company’s drug candidates and its ability to service those markets; the effects of the First Wave Bio, Inc. acquisition, the related settlement and their effect on the Company’s business, operating results and financial prospects; and the Company’s current and future capital requirements and its ability to raise additional funds to satisfy its capital needs. Additional information concerning the Company and its business, including a discussion of factors that could materially affect the Company’s financial results are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, under the heading “Risk Factors,” as well as the Company’s subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.
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What type of therapies does First Wave BioPharma specialize in?
First Wave BioPharma specializes in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases.
How many shares of common stock is the Company selling in the offering?
The Company is selling 525,625 shares of common stock (or common stock equivalents) at a price of $7.61 per share.
What is the exercise price of the warrants issued in the private placement?
The warrants issued in the private placement have an exercise price of $7.48 per share.
Who is acting as the exclusive placement agent for the offering?
Roth Capital Partners is acting as the exclusive placement agent for the offering.
How much is the gross proceeds expected to be from this offering?
The gross proceeds to the Company from this offering are expected to be approximately $4.0 million.
