Moleculin Announces Closing of up to $16.5 Million Public Offering

Rhea-AI Summary

Moleculin Biotech, Inc. (Nasdaq: MBRX) has closed a public offering of up to $16.5 million, including $5.5 million upfront and potential additional $11.0 million from warrant exercises. The offering comprises 2,466,368 shares of common stock (or equivalents) and two series of warrants at $2.23 per share. Series A warrants expire in 2 years or 60 days after positive MIRACLE trial interim data, while Series B warrants expire in 5 years or 6 months after final MIRACLE trial data. Both warrant series require shareholder approval for exercise. H.C. Wainwright & Co. acted as the exclusive placement agent. Moleculin plans to use the proceeds for advancing its drug portfolios, including Annamycin, through clinical development and preclinical studies.

Positive

• Raised $5.5 million in immediate funding
• Potential for additional $11.0 million from warrant exercises
• Funds to be used for advancing drug portfolios through clinical development and preclinical studies
• Engagement of reputable financial firms as placement agent and advisors

Negative

• Dilution of existing shareholders due to new share issuance
• Offering price of $2.23 per share may be below current market price
• Exercise of warrants subject to shareholder approval, introducing uncertainty
• Amendment of existing warrants to lower exercise price, potentially further diluting shareholders

Insights

Financial Analyst

Moleculin's $5.5 million upfront financing, with potential for an additional $11 million, is a significant capital injection for a Phase 3 clinical-stage biotech. The $2.23 per share pricing indicates investor interest, albeit at a discount. The inclusion of warrants suggests a structured deal to attract investors while managing dilution. The MIRACLE trial milestones tied to warrant exercise could provide additional funding if clinical results are positive, aligning investor interests with trial outcomes.

The amendment of previous warrants from $9.60 to $2.23 exercise price is notable, potentially indicating a significant drop in share price since December 2023. This could dilute existing shareholders but may be necessary to secure funding. The company's focus on using proceeds for clinical development and research sponsorship aligns with its stage and goals, but investors should monitor cash burn rate and potential future dilution.

Medical Research Analyst

Moleculin's diverse portfolio targeting hard-to-treat tumors and viruses shows promise, particularly with Annamycin in Phase 3. The MIRACLE trial is crucial, with interim data potentially triggering warrant exercises. The trial's design, focusing on complete remission rates and statistical significance in the primary efficacy endpoint, suggests a high bar for success but could lead to substantial rewards if met.

The company's strategy to advance multiple drug candidates simultaneously is ambitious but risky. Investors should closely monitor the progress of Annamycin and the two other drug portfolios mentioned. The continued sponsorship of research at MD Anderson and HPI indicates ongoing innovation efforts, which is vital in the competitive biotech landscape. However, the need for frequent financing rounds is typical for clinical-stage biotechs and underscores the importance of positive clinical results for Moleculin's long-term viability.

$5.5 million financing upfront with up to an additional $11.0 million of potential aggregate gross proceeds upon the exercise in full of milestone-linked warrants

HOUSTON, Aug. 19, 2024 /PRNewswire/ -- Moleculin Biotech, Inc., (Nasdaq: MBRX) ("Moleculin" or the "Company"), a Phase 3 clinical stage pharmaceutical company with a broad portfolio of drug candidates targeting hard-to-treat tumors and viruses, today announced the closing of its previously announced public offering of an aggregate of 2,466,368 shares of its common stock (or common stock equivalents in lieu thereof), Series A warrants to purchase up to 2,466,368 shares of common stock and Series B warrants to purchase up to 2,466,368 shares of common stock, at a combined public offering price of $2.23 per share (or per common stock equivalent in lieu thereof) and accompanying warrants.

The Series A warrants have an exercise price of $2.23, are exercisable immediately upon Shareholder Approval (as defined below) and will expire upon the earlier of (i) the 2 year anniversary of the date of Stockholder Approval (as defined below) and (ii) the 60^th day following the date the Company releases interim data for the first subject group from the MIRACLE trial whereby the complete remission rate for either doses of the Company's study drug is greater than placebo. The Series B warrants have an exercise price of $2.23, are exercisable immediately upon Shareholder Approval (as defined below) and will expire upon the earlier of (i) the 5 year anniversary of the date of Stockholder Approval (as defined below) and (ii) the 6 month anniversary following the date the Company releases final topline data from the MIRACLE trial and documented a statistically significant improvement in the primary efficacy endpoint. Pursuant to Nasdaq Listing Rule 5635(d), the exercise of the Series A warrants and Series B warrants is subject to shareholder approval (the "Shareholder Approval").

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering. Roth Capital Partners LLC and Maxim Group LLC acted as financial advisors.

The gross proceeds from the offering, before deducting the placement agent's fees and other offering expenses payable by the Company, were approximately $5.5 million and up to an additional approximately $11.0 million in gross proceeds if the warrants are fully exercised for cash. The Company intends to use the net proceeds from this offering to advance Annamycin and its other two drug portfolios through clinical development, advance the remainder of the Company's existing portfolio through preclinical studies and into INDs or their equivalent, sponsor research at MD Anderson and HPI, and for working capital.

The securities described above were offered pursuant to a registration statement on Form S-1 (File No. 333-280951), which was declared effective by the Securities and Exchange Commission (the "SEC") on August 15, 2024. The offering was made only by means of a prospectus forming part of the effective registration statement relating to the offering. A final prospectus relating to the offering has been filed with the SEC. Electronic copies of the final prospectus may be obtained on the SEC's website at http://www.sec.gov and may also be obtained by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com.

The Company also has amended certain existing warrants to purchase up to an aggregate of 895,834 shares of common stock that were previously issued in December 2023 and have an exercise price of $9.60 per share such that the amended warrants have a reduced exercise price of $2.23 per share effective upon the closing of the offering, will be exercisable beginning on the effective date of Stockholder Approval of the issuance of the shares upon exercise of the warrants and will expire five years from the date of Stockholder Approval.

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 Moleculin Biotech, Inc.

Moleculin Biotech, Inc. is a Phase 3 clinical stage pharmaceutical company advancing a pipeline of therapeutic candidates addressing hard-to-treat tumors and viruses. The Company's lead program, Annamycin, is a next-generation anthracycline designed to avoid multidrug resistance mechanisms and to eliminate the cardiotoxicity common with currently prescribed anthracyclines. Annamycin is currently in development for the treatment of relapsed or refractory acute myeloid leukemia (AML) and soft tissue sarcoma (STS) lung metastases.

The Company is initiating the MIRACLE (Moleculin R/R AML AnnAraC Clinical Evaluation) Trial (MB-108), a pivotal, adaptive design Phase 3 trial evaluating Annamycin in combination with cytarabine, together referred to as AnnAraC, for the treatment of relapsed or refractory acute myeloid leukemia. Following a successful Phase 1B/2 study (MB-106), with input from the FDA, the Company believes it has substantially de-risked the development pathway towards a potential approval for Annamycin for the treatment of AML. This study is subject to appropriate future filings with potential additional feedback from the FDA and their foreign equivalents.

Additionally, the Company is developing WP1066, an Immune/Transcription Modulator capable of inhibiting p-STAT3 and other oncogenic transcription factors while also stimulating a natural immune response, targeting brain tumors, pancreatic and other cancers. Moleculin is also engaged in the development of a portfolio of antimetabolites, including WP1122 for the potential treatment of viruses, as well as certain cancer indications. 

For more information about the Company, please visit www.moleculin.com and connect on X, LinkedIn and Facebook.

Forward-Looking Statements

Some of the statements in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Although Moleculin believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Moleculin has attempted to identify forward-looking statements by terminology including 'believes,' 'estimates,' 'anticipates,' 'expects,' 'plans,' 'projects,' 'intends,' 'potential,' 'may,' 'could,' 'might,' 'will,' 'should,' 'approximately' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These forward-looking statements, include, but are not limited to, the anticipated use of proceeds therefrom and the receipt of Stockholder Approval. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under Item 1A. "Risk Factors" in our most recently filed Form 10-K filed with the Securities and Exchange Commission (SEC) and updated from time to time in our Form 10-Q filings and in our other public filings with the SEC. Any forward-looking statements contained in this release speak only as of its date. We undertake no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events.

Investor Contact:

JTC Team, LLC
Jenene Thomas
(833) 475-8247
MBRX@jtcir.com

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SOURCE Moleculin Biotech, Inc.

FAQ

What is the total value of Moleculin's (MBRX) recent public offering?

Moleculin's recent public offering is valued at up to $16.5 million, including $5.5 million in immediate funding and potential additional $11.0 million from warrant exercises.

How many shares and warrants were issued in Moleculin's (MBRX) August 2024 offering?

Moleculin issued 2,466,368 shares of common stock (or equivalents) and two series of warrants to purchase up to 2,466,368 shares each, totaling 4,932,736 potential additional shares.

What is the exercise price for the warrants in Moleculin's (MBRX) recent offering?

The exercise price for both Series A and Series B warrants in Moleculin's recent offering is $2.23 per share.

How does Moleculin (MBRX) plan to use the proceeds from its August 2024 public offering?

Moleculin plans to use the proceeds to advance Annamycin and other drug portfolios through clinical development, conduct preclinical studies, sponsor research at MD Anderson and HPI, and for working capital.