RedHill Biopharma Announces $1.25 Million Registered Direct Offering at a Premium to Market Price
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The announcement of RedHill Biopharma's registered direct offering at a premium indicates a positive investor sentiment and a likely immediate impact on the company's liquidity position. The premium price of $0.58289 per ADS over the closing price on a recent trading day suggests a higher valuation of the company by the private investors involved, which can be interpreted as a vote of confidence in RedHill's future prospects.
Furthermore, the introduction of warrants with an exercise price of $0.75, which is higher than both the offering price and the recent closing price, could incentivize longer-term investment and potentially dilute current shareholders if exercised. This may also signal that investors are expecting the stock to perform well over the next five years. However, the dilution effect and the actual benefit to the company will depend on the future performance of the stock and the timing of the warrant exercises.
Investors should monitor the impact of this cash influx on RedHill's research and development activities, particularly if the funds are earmarked for specific projects or the advancement of the company's pipeline. The immediate increase in cash reserves could support ongoing clinical trials or the commercialization of new products, which would be a positive development for long-term growth.
RedHill Biopharma's strategic move to raise capital through a registered direct offering reflects a deliberate choice to bypass traditional public offerings, which could be indicative of a more targeted approach in attracting specific investors or circumventing the complexities and uncertainties of wider market conditions.
The offering's structure, with warrants attached, is a common mechanism to entice investment while providing potential upside to investors. It's important to note that the exercise price is set above the current trading price, which could suggest an anticipation of stock value appreciation. The market's reaction to such offerings can vary, but typically, a company's ability to raise funds at a premium is received positively, as it does not immediately erode shareholder value.
Analysing the historical performance of biopharmaceutical companies following similar capital raises, one could expect a period of volatility as the market digests the news and adjusts to the potential for future dilution. Stakeholders should consider the implications of this offering on RedHill's market capitalization and the potential for shifts in stockholder equity.
In the biopharmaceutical industry, the ability to secure funding at a premium is often a reflection of the underlying strength of a company's product pipeline and its management's ability to execute on strategic initiatives. RedHill Biopharma's successful capital raise could indicate that the private investors have confidence in the company's current and future projects, which may include advancing clinical trials or scaling up manufacturing capabilities for new drug entities.
The provision of warrants in the deal structure might also reflect an alignment of interests between RedHill and its investors, with the former securing immediate capital and the latter being granted the opportunity for future equity participation. This can be particularly important for biopharmaceutical companies where the timeline to product commercialization can be protracted and uncertain.
It is important for stakeholders to understand the balance between the immediate financial benefit to RedHill and the potential long-term effects of warrant exercises on share price and equity structure. This funding could be a pivotal moment for the company, potentially accelerating its growth trajectory if managed effectively.
No placement agent was used in connection with the offering.
The gross proceeds to the Company from the offering are expected to be
The securities described above are being offered by the Company pursuant to a "shelf" registration statement on Form F-3 (File No. 333-258259) previously filed with the Securities and Exchange Commission (the "SEC") on July 29, 2021, and declared effective by the SEC on August 9, 2021. The offering of the securities is made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the securities being offered 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.
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 RedHill Biopharma
RedHill Biopharma Ltd. (Nasdaq: RDHL) is a specialty biopharmaceutical company primarily focused on gastrointestinal and infectious diseases. RedHill promotes the gastrointestinal drugs Talicia®, for the treatment of Helicobacter pylori (H. pylori) infection in adults[1], and Aemcolo®, for the treatment of travelers' diarrhea in adults[2]. RedHill's key clinical late-stage development programs include: (i) opaganib (ABC294640), a first-in-class oral broad-acting, host-directed SPHK2 selective inhibitor with potential for pandemic preparedness, targeting multiple indications with a
More information about the Company is available at www.redhillbio.com / twitter.com/RedHillBio.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may discuss investment opportunities, stock analysis, financial performance, investor relations, and market trends. Such statements, including, but not limited to, statements regarding the completion of the offering, the satisfaction of customary closing conditions related thereto and the intended use of net proceeds from the offering, may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words and include statements regarding the risk that the Company will not regain or maintain compliance with the listing requirements of the Nasdaq Capital Market ("Nasdaq") to remain listed for trading on Nasdaq, the addition of new revenue generating products, out-licensing of the Company's development pipeline assets, timing of opaganib's development for Acute Radiation Syndrome, non-dilutive development funding from RHB-107 and its inclusion in a key platform study. Forward-looking statements are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, market and other conditions; the ability of the Company to satisfy all conditions precedent to the closing of the offering; the completion of the offering; the intended use of proceeds from the offering; the risk that the addition of new revenue generating products or out-licensing transactions will not occur; the risk that acceptance onto the RNCP Product Development Pipeline will not guarantee ongoing development or that any such development will not be completed or successful; the risk that the FDA does not agree with the Company's proposed development plans for opaganib for any indication; the risk that observations from preclinical studies are not indicative or predictive of results in clinical trials; the risk that the FDA pre-study requirements will not be met and/or that the Phase 3 study of RHB-107 in COVID-19 outpatients will not be approved to commence or if approved, will not be completed or, should that be the case, that we will not be successful in obtaining alternative non-dilutive development funding for RHB-107; the risk that HB-107's late-stage development for non-hospitalized COVID-19 will not benefit from the resources redirected from the terminated RHB-204 Phase 3 study; the risk, that the Phase 2/3 COVID-19 study for RHB-107 may not be successful and, even if successful, such studies and results may not be sufficient for regulatory applications, including emergency use or marketing applications, and that additional COVID-19 studies for opaganib and RHB-107 are likely to be required; risks and uncertainties associated with the risk that the Company will not successfully commercialize its products; as well as risks and uncertainties associated with (i) the initiation, timing, progress and results of the Company's research, manufacturing, pre-clinical studies, clinical trials, and other therapeutic candidate development efforts, and the timing of the commercial launch of its commercial products and ones it may acquire or develop in the future; (ii) the Company's ability to advance its therapeutic candidates into clinical trials or to successfully complete its pre-clinical studies or clinical trials or the development of a commercial companion diagnostic for the detection of MAP; (iii) the extent and number and type of additional studies that the Company may be required to conduct and the Company's receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings, approvals and feedback; (iv) the manufacturing, clinical development, commercialization, and market acceptance of the Company's therapeutic candidates and Talicia®; (v) the Company's ability to successfully commercialize and promote Talicia® and Aemcolo®; (vi) the Company's ability to establish and maintain corporate collaborations; (vii) the Company's ability to acquire products approved for marketing in the
Company contact:
Adi Frish
Chief Corporate & Business Development Officer
RedHill Biopharma
+972-54-6543-112
adi@redhillbio.com
Category: Financials
[1] Talicia® (omeprazole magnesium, amoxicillin and rifabutin) is indicated for the treatment of H. pylori infection in adults. For full prescribing information see: www.Talicia.com.
[2] Aemcolo® (rifamycin) is indicated for the treatment of travelers' diarrhea caused by noninvasive strains of Escherichia coli in adults. For full prescribing information see: www.aemcolo.com.
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SOURCE RedHill Biopharma Ltd.