Disc Medicine Announces Proposed Public Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

Disc Medicine (NASDAQ: IRON) has announced a proposed public offering of $200.0 million of common stock and pre-funded warrants. The company will grant underwriters a 30-day option to purchase up to an additional $30.0 million of shares. The proceeds will fund research and clinical development of product candidates, support potential commercialization of bitopertin for EPP and XLP, and provide working capital.

The offering is being managed by joint book-runners Jefferies, Leerink Partners, Stifel, and Cantor. The securities will be offered through an automatic shelf registration statement previously filed with the SEC. The completion, size, and terms of the offering are subject to market conditions.

Positive

• Significant capital raise of up to $230 million to fund research and development
• Proceeds will support commercialization of bitopertin for EPP and XLP treatments
• Multiple established financial institutions acting as joint book-runners

Negative

• Potential dilution of existing shareholders through new stock issuance
• Uncertainty regarding final terms and completion of the offering
• Additional share offering may pressure stock price in the short term

Insights

Financial Analyst

The $200 million public offering announced by Disc Medicine, with an additional $30 million underwriter option, represents a substantial capital raise that warrants careful analysis. This financing move comes as the company advances its hematologic disease pipeline, particularly focusing on bitopertin for EPP and XLP treatments.

The offering's structure, combining common stock with pre-funded warrants, is strategically designed to appeal to different investor preferences. Pre-funded warrants are particularly attractive to institutional investors who may face ownership restrictions, as they provide flexibility in timing the actual share acquisition while securing the investment price.

The engagement of four major investment banks (Jefferies, Leerink Partners, Stifel and Cantor) as joint book-running managers suggests a coordinated effort to ensure broad market reach and successful placement. This multi-bank approach typically indicates a large-scale offering that requires extensive distribution capabilities.

For investors, key considerations include:

• Potential dilution impact on existing shareholders, though the exact magnitude depends on the pricing terms yet to be announced
• The company's strengthened balance sheet will support both research initiatives and commercial preparations for bitopertin
• The timing suggests confidence in the company's clinical programs and may indicate upcoming catalysts that require substantial funding

The automatic shelf registration (Form S-3) filed in August 2024 enables quick market access, indicating strategic preparation for this capital raise. While the offering will dilute existing shareholders, it provides important funding for advancing the company's pipeline and potential commercialization efforts, which could create long-term value if successfully executed.

WATERTOWN, Mass., Jan. 21, 2025 (GLOBE NEWSWIRE) -- Disc Medicine, Inc. (NASDAQ: IRON) (Disc), a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel treatments for patients suffering from serious hematologic diseases, today announced that it has commenced an underwritten offering of $200.0 million of shares of its common stock and, in lieu of common stock to certain investors that so choose, pre-funded warrants to purchase shares of its common stock. In addition, Disc intends to grant the underwriters a 30-day option to purchase up to an additional $30.0 million of shares of its common stock at the public offering price, less underwriting discounts and commissions. All of the securities being sold in the proposed offering are being offered by Disc. The proposed offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

Disc intends to use the net proceeds from the proposed offering to fund research and clinical development of its current or additional product candidates, to support the potential commercialization of bitopertin for erythropoietic protoporphyria (EPP) and X-linked protoporphyria (XLP), as well as for working capital and other general corporate purposes.

Jefferies, Leerink Partners, Stifel and Cantor are acting as joint book-running managers for the proposed offering.

The securities described above are being offered by Disc pursuant to an automatic shelf registration statement on Form S-3 (No. 333-281359) that was previously filed with the Securities and Exchange Commission (SEC) on August 8, 2024. This proposed offering is being made only by means of a prospectus supplement and an accompanying prospectus that form a part of the registration statement. A preliminary prospectus supplement and an accompanying prospectus related to the proposed offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to this proposed offering may also be obtained, when available, by contacting: Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, 2nd Floor, New York, NY 10022, by telephone at (877) 821-7388, or by email at prospectus_department@jefferies.com; Leerink Partners LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, MA 02109, (800) 808-7525 ext. 6105 or by email at syndicate@leerink.com; Stifel , Nicolaus & Company, Incorporated, Attention: Syndicate, One Montgomery Street, Suite 3700, San Francisco, California 94104, by telephone at (415) 364-2720 or by email at syndprospectus@stifel.com; or Cantor Fitzgerald & Co., Attention: Capital Markets, 110 East 59th Street, 6th Floor, New York, New York, 10022, or by email at prospectus@cantor.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, 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 that state or jurisdiction.

About Disc Medicine

Disc Medicine (NASDAQ: IRON) is a clinical-stage biopharmaceutical company committed to discovering, developing, and commercializing novel treatments for patients who suffer from serious hematologic diseases. We are building a portfolio of innovative, potentially first-in-class therapeutic candidates that aim to address a wide spectrum of hematologic diseases by targeting fundamental biological pathways of red blood cell biology, specifically heme biosynthesis and iron homeostasis.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, express or implied statements related to Disc’s expectations regarding the timing of the proposed offering, and the anticipated use of proceeds from the offering. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “seek,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release. These risks and uncertainties include fluctuations in Disc’s stock price, changes in market conditions, the completion of the public offering on the anticipated terms or at all, the expectation to grant the underwriter a 30-day option to purchase additional shares and other risks identified in our SEC filings, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and in the preliminary prospectus supplement related to the proposed offering we will file with the SEC. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. We disclaim any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Media Contact
Peg Rusconi
Deerfield Group
peg.rusconi@deerfieldgroup.com

Investor Relations Contact
Christina Tartaglia
Precision AQ
christina.tartaglia@precisionaq.com

FAQ

How much is Disc Medicine (IRON) planning to raise in its 2025 public offering?

Disc Medicine is planning to raise $200 million, with an additional $30 million option for underwriters, potentially totaling $230 million.

What will Disc Medicine use the proceeds from its 2025 stock offering for?

The proceeds will fund research and clinical development, support commercialization of bitopertin for EPP and XLP, and provide working capital for general corporate purposes.

Which investment banks are managing IRON's 2025 public offering?

The offering is being managed by Jefferies, Leerink Partners, Stifel, and Cantor as joint book-running managers.

What types of securities is IRON offering in its January 2025 public offering?

Disc Medicine is offering shares of common stock and pre-funded warrants to purchase shares of common stock.

How will IRON's 2025 public offering affect existing shareholders?

The offering may result in dilution of existing shareholders' ownership stakes and could potentially impact the stock price in the short term.