HCW Biologics Announces Pricing of $5.0 Million Follow-On Offering Priced At-The-Market Under NASDAQ Rules

Rhea-AI Summary

HCW Biologics (NASDAQ: HCWB) has announced the pricing of a $5.0 million follow-on offering at $7.45 per unit. Each unit includes one share of common stock (or pre-funded warrant) and two warrants to purchase common stock. The warrants have an exercise price of $7.45 per share, are immediately exercisable, and expire in five years.

The offering is expected to close around May 15, 2025, with Maxim Group LLC acting as sole placement agent. The company plans to use the proceeds for preclinical and clinical development of HCW9302, business development, patent portfolio expansion, and general corporate purposes. Additionally, HCWB has agreed to reduce the exercise price of certain existing warrants from $41.20 to $7.45 per share.

Positive

• Secured $5.0 million in additional funding for clinical development and operations
• Proceeds will support development of HCW9302 and business expansion initiatives
• Warrants provide potential for additional future funding at $7.45 per share

Negative

• Offering will cause immediate dilution for existing shareholders
• Significant warrant coverage (2 warrants per share) could lead to future dilution
• Reduction of existing warrant exercise price from $41.20 to $7.45 indicates potential pressure on stock price

Insights

Biotech Financial Analyst

HCW Biologics raising $5M through dilutive equity offering to fund clinical programs, signaling near-term cash needs.

HCW Biologics has announced a $5 million follow-on offering that reveals important signals about the company's current financial position. The offering consists of 671,140 units priced at $7.45 per unit, with each unit comprising one share (or pre-funded warrant) plus two warrants to purchase additional shares at $7.45. This pricing structure, being "at-the-market" under Nasdaq rules, indicates the company couldn't command a premium in this capital raise.

The structure of this deal is particularly noteworthy. The addition of two warrants per share creates potential for significant future dilution beyond the immediate 13.6% from the new shares alone. This suggests the company needed to offer generous sweeteners to attract investors. Additionally, the company has renegotiated existing warrants with an exercise price of $41.20, reducing it dramatically to $7.45 - an 82% reduction that highlights substantial share price deterioration since those warrants were issued.

The stated use of proceeds focuses on funding their lead candidate HCW9302 along with business development, patent expansion, and general corporate purposes. This relatively small raise of $5 million (before fees) suggests a strategic move to extend runway rather than a transformative funding event. For a clinical-stage biotech with multiple development programs, this amount typically provides limited operational runway, implying potential need for additional capital raises if clinical milestones aren't achieved soon. The company is pursuing novel immunotherapies targeting inflammation in age-related diseases, a promising but still early-stage therapeutic approach that requires substantial clinical validation.

MIRAMAR, Fla., May 13, 2025 (GLOBE NEWSWIRE) -- HCW Biologics Inc. (the “Company”), (NASDAQ: HCWB), a clinical-stage biopharmaceutical company focused on discovering and developing novel immunotherapies to lengthen health span by disrupting the link between inflammation and age-related diseases, today announced the pricing of its follow-on offering of an aggregate of 671,140 units at a purchase price of $7.45 per unit priced at-the-market under Nasdaq rules. Each unit consists of one share of common stock (or pre-funded warrant in lieu thereof) and two warrants, each to purchase one share of common stock. The warrants will have an exercise price of $7.45 per share, will be exercisable immediately upon issuance, and will expire on the five-year anniversary of the original issuance date. The shares of common stock (or pre-funded warrants) and the warrants comprising the units are immediately separable and will be issued separately in this offering. The closing of the offering is expected to occur on or about May 15, 2025, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as the sole placement agent for the offering.

The gross proceeds from the offering, before deducting the placement agent’s fees and other offering expenses, are expected to be approximately $5.0 million. The Company intends to use the net proceeds from this offering for funding preclinical and clinical development, including the clinical trials for HCW9302, business development and identifying compounds for out-licensing, collaborations, patent portfolio expansion, research and development, and general corporate purposes.

In addition, the Company has entered into a privately negotiated agreement with the holder of certain existing outstanding warrants to purchase up to 167,925 shares of common stock (the “Existing Warrants”) to reduce the exercise price of such Existing Warrants from $41.20 per share to $7.45 per share.

The securities described above are being offered pursuant to a registration statement on Form S-1, as amended (File No. 333-287136), which was declared effective by the Securities and Exchange Commission (the “SEC”) on May 13, 2025. The offering is being made only by means of a prospectus which forms a part of the effective registration statement. A preliminary prospectus relating to the offering has been filed with the SEC. Electronic copies of the final prospectus, when available, may be obtained on the SEC’s website at www.sec.gov and may also be obtained by contacting Maxim Group LLC at 300 Park Avenue, 16th Floor, New York, NY 10022, Attention: Prospectus Department, or by telephone at (212) 895-3745 or by email at syndicate@maximgrp.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 HCW Biologics:

HCW Biologics Inc. (NASDAQ: HCWB) is a clinical-stage biopharmaceutical company developing proprietary immunotherapies to treat diseases promoted by chronic inflammation, especially age-related and senescence-associated diseases. The Company’s immunotherapeutics represent a new class of drug that it believes have the potential to fundamentally change the treatment of cancer and many other diseases and conditions that are promoted by chronic inflammation — and in doing so, improve patients’ quality of life and possibly extend longevity. Chronic inflammation, including inflammaging, is believed to be a significant contributing factor to the cause for senescence-associated diseases and conditions that diminish healthspan, including many types of cancer, autoimmune diseases, and neurodegenerative diseases, as well as indications that impact quality-of-life that are not life-threatening. The Company’s lead product candidate, HCW9302, was developed using the Company’s legacy TOBI™ (Tissue factOr-Based fusIon) platform. The Company has created another drug discovery technology, the TRBC platform, which is not based on Tissue Factor. The TRBC platform has the capability to construct immunotherapeutics that not only activate and target immune responses but are also equipped with receptors that specifically target cancerous or infected cells. This platform is such a versatile scaffold that it enables the creation of multiple classes of immunotherapeutic compounds: Class I: Multi-Functional Immune Cell Stimulators; Class II: Second-Generation Immune Checkpoint Inhibitors; Class III: Multi-Specific Targeting Fusions and Enhanced Immune Cell Engagers. These novel immunotherapeutics can be used to treat a wide range of disease indications, including oncology, autoimmune diseases, and improving quality of life conditions. The Company has constructed over 50 molecules using the TRBC platform, including HCW11-002, HCW11-018 and HCW11-027. Further preclinical evaluation studies are currently being conducted for these three molecules the Company has selected based on promising early data. The Company has two licensing programs in which it has licensed exclusive rights for some of its proprietary molecules.

Forward-Looking Statements

Statements in this press release contain “forward-looking statements” that are subject to substantial risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words and include, the statements on the closing of the offering and the satisfaction of closing conditions and use of proceeds in the offering, the Company’s ability to develop new immunotherapeutic treatments for non-oncology or oncology indications; the capabilities of the Company’s new platform and the effectiveness of new fusion proteins developed using the new platform. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ include, but are not limited to, the risks and uncertainties that are described in the section titled “Risk Factors” in the annual report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on March 28, 2025 and in other filings filed from time to time with the SEC. Forward-looking statements contained in this press release are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Company Contact:

Rebecca Byam
CFO
HCW Biologics Inc.
rebeccabyam@hcwbiologics.com

FAQ

What is the size and price of HCWB's May 2025 follow-on offering?

HCW Biologics priced a $5.0 million follow-on offering of 671,140 units at $7.45 per unit, with each unit containing one share (or pre-funded warrant) and two warrants.

How will HCW Biologics use the proceeds from its 2025 offering?

The proceeds will be used for preclinical and clinical development including HCW9302 trials, business development, patent portfolio expansion, research and development, and general corporate purposes.

What are the terms of HCWB's May 2025 offering warrants?

The warrants have an exercise price of $7.45 per share, are immediately exercisable upon issuance, and will expire five years from the issuance date.

Who is the placement agent for HCWB's 2025 follow-on offering?

Maxim Group LLC is acting as the sole placement agent for the offering.

What changes were made to HCWB's existing warrants in May 2025?

HCW Biologics agreed to reduce the exercise price of existing warrants for 167,925 shares from $41.20 to $7.45 per share.