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Kiora Pharmaceuticals Announces Private Placement of up to Approximately $45 Million

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Kiora Pharmaceuticals, Inc. has announced a securities purchase agreement with healthcare investors to raise up to $45 million in gross proceeds, including $15 million in upfront funding and up to an additional $30 million upon exercise of accompanying warrants. The financing includes participation from new healthcare-dedicated investors, and the company will issue an aggregate of 27,154,237 shares of its common stock and accompanying warrants. The financing will provide flexibility to fully fund KIO-104 for the treatment of non-infectious uveitis and potentially other rare inflammatory indications in the back of the eye.
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The recent announcement by Kiora Pharmaceuticals regarding its securities purchase agreement for an aggregate of up to approximately $45 million in total gross proceeds represents a significant financial development for the company. This capital infusion, including $15 million in upfront financing and the potential for an additional $30 million from warrant exercises, is poised to bolster Kiora's financial stability and provide the necessary resources to advance its clinical pipeline.

From a financial perspective, the involvement of healthcare-focused institutional investors signals a strong vote of confidence in Kiora's strategic direction and the potential of its therapeutic candidates. The commitment from investors such as ADAR1 Capital Management and Nantahala Capital Management, among others, suggests a positive market sentiment towards Kiora's niche in addressing orphan retinal diseases—a sector with high unmet medical needs and often attractive long-term commercial prospects.

Regarding the stock warrants, the tiered exercise prices and conditions based on clinical trial outcomes and stock performance metrics introduce a performance-based element to the financing, aligning investor returns with company milestones. The exercise of these warrants is contingent upon shareholder approval, adding a layer of corporate governance that can impact the timing and certainty of the additional funding.

Kiora's focus on developing treatments for orphan retinal diseases places it within a highly specialized segment of the biotechnology market. The financing's earmarking for the development of KIO-104 for non-infectious uveitis, a serious and chronic eye condition, suggests that Kiora is targeting conditions with limited treatment options, which could translate into both high market demand and premium pricing if the therapy reaches commercialization.

However, the biotech industry is characterized by long development timelines and significant regulatory hurdles. The reference to upcoming clinical trials, such as the Phase 2 trial of KIO-301 in patients with retinitis pigmentosa, emphasizes the critical nature of these milestones in determining Kiora's future. The success or failure of these trials will have a profound impact on the company's valuation and its ability to secure further funding or partnerships.

Investors and industry observers will be closely monitoring the announced full data from the ABACUS-2 trial and the planned Phase 2 trial for KIO-104, as these will provide crucial insights into the efficacy and safety of Kiora's drug candidates. Positive results could lead to significant appreciation in the company's stock value, whereas negative outcomes could jeopardize the company's financial position and investor confidence.

The structuring of the securities purchase agreement adheres to the Nasdaq's 'Minimum Price' rule, which is designed to protect shareholders from dilutive transactions. The pricing of the shares and warrants, as well as the conditions set for warrant exercises, demonstrate Kiora's compliance with exchange regulations and its commitment to maintaining corporate integrity.

The inclusion of pre-funded warrants is a strategic move that allows certain investors to secure their investment at a slightly lower price than the common stock, while still contributing to the company's capital. This instrument is particularly useful for investors who are confident in the company's prospects and wish to lock in their right to purchase shares at a predetermined price.

It is also noteworthy that the exercise of the accompanying warrants requires shareholder approval, which is a safeguard for existing shareholders against potential excessive dilution. The tiered structure of the warrants, with different exercise prices and expiration dates tied to specific clinical milestones, reflects a sophisticated financial instrument designed to balance investor interests with those of the company.

$15 million in upfront financing with the potential to receive up to an additional approximately $30 million in potential warrant exercise proceeds for an aggregate of up to approximately $45 million in total gross proceeds

Encinitas, California--(Newsfile Corp. - January 31, 2024) - Kiora Pharmaceuticals, Inc. (NASDAQ: KPRX) ("Kiora" or the "Company"), a clinical-stage biopharmaceutical company focused on developing therapeutics to improve sight in patients with severe vision loss due to inherited or age-related orphan retinal diseases, today announced that it has entered into a securities purchase agreement with healthcare focused institutional investor(s) to raise up to approximately $45 million in gross proceeds, including initial upfront funding of $15 million and up to an additional approximately $30 million upon exercise of accompanying warrants at the election of the investors.

The financing includes participation from new healthcare-dedicated investors, including ADAR1 Capital Management, Nantahala Capital Management, Rosalind Advisors, Stonepine Capital Management, and Velan Capital, among others.

"This financing, combined with our agreement with Théa Open Innovation, demonstrates the confidence in our team and development pipeline from healthcare-focused institutional investors and corporate partners," said Brian M. Strem, Ph.D., President and Chief Executive Officer. "The significantly strengthened balance provides us with flexibility to fully-fund KIO-104 for the treatment of non-infectious uveitis and potentially other rare inflammatory indications in the back of the eye."

Maxim Group LLC is acting the sole placement agent for the private placement.

Pursuant to terms of the securities purchase agreement, Kiora will issue an aggregate of 27,154,237 shares of its common stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase up to an aggregate of 49,374,590 shares of its common stock at a combined purchase price of $0.5524 per share and accompanying warrants, in accordance with the "Minimum Price" requirement as defined in the Nasdaq rules. The exercise of the accompanying warrants (excluding the pre-funded warrants) are subject to shareholder approval and will consist of two tranches:

  • Tranche A warrants to purchase up to 24,687,295 shares of common stock at an exercise price of $0.6076 per share for an aggregate of up to approximately $15 million and will expire at the earlier of (i) 30 days following the announcement of full data (expected in Q2 2025) from the Company's Phase 2 clinical trial (ABACUS-2) of KIO-301 in patients with retinitis pigmentosa and the daily VWAP of the Company's common stock equaling or exceeding $1.1048 per share for 30 consecutive trading days following the announcement and (ii) five years from the date of shareholder approval of the warrants.

  • Tranche B warrants to purchase up to 24,687,295 shares of common stock at an exercise price of $0.6076 per share for an aggregate of up to approximately $15 million and will expire at the earlier of (i) 30 days following the announcement of topline data (expected in 2026) from the planned Phase 2 trial of KIO-104 in posterior non-infectious uveitis and the daily VWAP of the Company's common stock equaling or exceeding $1.3810 per share for 30 consecutive trading days following the announcement and (ii) five years from the date of shareholder approval of the warrants.

  • (ii) five years from the date of shareholder approval of the warrants.

In lieu of shares of common stock, certain investors are purchasing pre-funded warrants at a combined purchase price of $0.5523 per pre-funded warrant and accompanying warrants, which equals the purchase price per share of common stock and accompanying warrant, less the $0.0001 per share exercise price of each pre-funded warrant. The private placement is expected to close on or about February 5, 2024 subject to satisfaction of customary closing conditions.

Kiora intends to use the upfront net proceeds from the private placement to fund the Company's general business operations and ongoing activities related to expediting the development of KIO-104 for posterior non-infectious uveitis and other potential orphan inflammatory diseases. The aggregate net proceeds (assuming exercise of all accompanying warrants) are expected to be sufficient to fund subsequent, potentially pivotal, clinical trials and other work in the Company's ophthalmic programs.

The offer and sale of the foregoing securities are being made in a transaction not involving a public offering, and the securities have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws. Accordingly, the securities 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 such applicable state securities laws. The Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock purchased in the private placement and shares of common stock underlying the warrants.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be made by means of a prospectus.

About Kiora Pharmaceuticals

Kiora Pharmaceuticals is a clinical-stage biotechnology company developing and commercializing products for the treatment of orphan retinal diseases. KIO-301 is being developed for the treatment of retinitis pigmentosa, choroideremia, and Stargardt disease. It is a molecular photoswitch that has the potential to restore vision in patients with inherited and/or age-related retinal degeneration. KIO-104 is being developed for the treatment of posterior non-infectious uveitis. It is a next-generation, non-steroidal, immuno-modulatory, and small-molecule inhibitor of dihydroorotate dehydrogenase. In addition to news releases and SEC filings, we expect to post information on our website, www.kiorapharma.com, and social media accounts that could be relevant to investors. We encourage investors to follow us on Twitter and LinkedIn as well as to visit our website and/or subscribe to email alerts.

Forward-Looking Statements

Some of the statements in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These "forward-looking" statements include statements relating to, among other things, Kiora's ability to close the private placement and the timing thereof, any proceeds that may be received upon warrant exercises, the anticipated use of the net proceeds of the offering, the expected use of proceeds and the sufficiency of the proceeds from the private placement to fund specific programs, the development and commercialization efforts and other regulatory or marketing approval efforts pertaining to Kiora's development-stage products, including KIO-104, KIO-201 and KIO-301, as well as the success thereof, with such approvals or success may not be obtained or achieved on a timely basis or at all. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release, including, among other things, the ability to satisfy the closing conditions related to the offering ,the ability to conduct clinical trials on a timely basis, market and other conditions and certain risk factors described under the heading "Risk Factors" contained in Kiora's Annual Report on Form 10-K filed with the SEC on March 23, 2023 or described in Kiora's other public filings. Kiora's results may also be affected by factors of which Kiora is not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. Kiora expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions, or circumstances on which any such statement is based, except as required by law.

Contact Information:
Investors@kiorapharma.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/196432

FAQ

What is the purpose of the financing agreement announced by Kiora Pharmaceuticals, Inc. (KPRX)?

The purpose of the financing agreement is to raise up to $45 million in gross proceeds, including $15 million in upfront funding and up to an additional $30 million upon exercise of accompanying warrants.

Who are the participating investors in the financing agreement with Kiora Pharmaceuticals, Inc. (KPRX)?

The financing includes participation from new healthcare-dedicated investors, including ADAR1 Capital Management, Nantahala Capital Management, Rosalind Advisors, Stonepine Capital Management, and Velan Capital, among others.

What is the purpose of the securities purchase agreement entered into by Kiora Pharmaceuticals, Inc. (KPRX)?

The securities purchase agreement is aimed at raising up to $45 million in gross proceeds, including $15 million in upfront funding and up to an additional $30 million upon exercise of accompanying warrants.

How many shares of common stock will Kiora Pharmaceuticals, Inc. (KPRX) issue as part of the financing agreement?

Kiora Pharmaceuticals, Inc. will issue an aggregate of 27,154,237 shares of its common stock (or pre-funded warrants in lieu thereof) and accompanying warrants as part of the financing agreement.

What is the purpose of the financing for Kiora Pharmaceuticals, Inc. (KPRX)?

The financing will provide flexibility to fully fund KIO-104 for the treatment of non-infectious uveitis and potentially other rare inflammatory indications in the back of the eye.

Kiora Pharmaceuticals, Inc.

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