Sangamo Therapeutics Announces Pricing of $24.0 Million Registered Direct Offering
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The recent move by Sangamo Therapeutics to raise capital through a securities purchase agreement is a strategic financial decision that can have notable implications for the company's liquidity and future growth initiatives. The sale of common stock and warrants is a common method for biotech firms to secure funding without taking on debt. However, the offering price at $0.84 for each share and warrant, which is priced at-the-market under Nasdaq rules, signals a potential dilutive effect for current shareholders. The exercise price of $1.00 for the warrants, which is above the offering price, could be seen as an incentive for investors, but also suggests a management expectation of stock price appreciation.
From a financial perspective, the gross proceeds of approximately $24 million, before fees and expenses, provide a cash infusion that could support Sangamo's R&D efforts, particularly in the costly field of genomic medicine. Investors will be keen to monitor how effectively this capital is deployed, as it could lead to advancements in the company's pipeline or strategic partnerships. It is important to note that while such capital raises are essential for biotech companies, they also increase the company's outstanding shares, potentially diluting the value for existing shareholders in the short term. Long-term benefits, however, could materialize if the funds lead to successful product development and commercialization.
The biotechnology sector is highly competitive and capital-intensive, with companies like Sangamo Therapeutics often requiring substantial funding to advance their research and clinical trials. The decision to issue new shares and warrants is reflective of the ongoing need for liquidity to sustain operations and invest in innovation. The market's reaction to such offerings can vary, with immediate impacts on stock price and investor sentiment often hinging on the perceived value of the investment and confidence in the company's future prospects.
Given the exercise price is set at a modest premium to the offering price, this could be interpreted as a cautious yet optimistic valuation by the company. Investors typically look for a balance between the immediate dilution of their holdings and the potential for long-term growth fueled by the capital raised. The ability of Sangamo to translate these funds into tangible progress in their genomic medicine programs will be critical in maintaining investor confidence and justifying the dilution. Market analysts will closely follow Sangamo's subsequent performance metrics and pipeline updates to assess the impact of this capital raise on the company's market position.
For companies operating in the genomic medicine space, like Sangamo Therapeutics, funding is a lifeline that enables continued research and development in a field characterized by high costs and extended timelines. The issuance of warrants, alongside common stock, is a strategic move that not only provides immediate funding but also aligns investor interests with the company's success. The warrants' six-month lock-up period before becoming exercisable and the five-and-a-half-year expiration term offer insights into the company's operational horizon and expected timeline for achieving significant milestones.
Investors with an interest in the biotech sector often evaluate the potential risks and rewards of such investments. The specific terms of the warrants, including the exercise price, can be viewed as a gauge for future expectations. In Sangamo's case, the exercise price set at $1.00 may reflect a conservative but hopeful outlook on the company's ability to grow its stock value. The capital raised is likely earmarked for advancing their therapeutic pipeline, which could include preclinical studies, clinical trials, or scaling up manufacturing capabilities. The success of these endeavors will ultimately dictate the impact of this funding round on the company's valuation and its position within the genomic medicine industry.
The gross proceeds to Sangamo from the offering, before deducting the placement agents’ fees and other offering expenses, are expected to be approximately
Barclays and Cantor are acting as placement agents for the offering.
A shelf registration statement on Form S-3 relating to the offering of the securities described above was previously filed with the Securities and Exchange Commission (SEC) and subsequently declared effective by the SEC. The offering is being made solely by means of a prospectus. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. A copy of the final prospectus supplement and accompanying prospectus relating to the offering, when available, may be obtained by investors for free from: Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue,
This press release shall not constitute an offer to sell or the 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 any such state or jurisdiction.
About Sangamo Therapeutics
Sangamo Therapeutics is a genomic medicine company dedicated to translating ground-breaking science into medicines that transform the lives of patients and families afflicted with serious neurological diseases who do not have adequate or any treatment options. Sangamo’s zinc finger epigenetic regulators are ideally suited to potentially address devastating neurological disorders and Sangamo’s capsid discovery platform is expanding delivery beyond currently available intrathecal delivery capsids, including in the central nervous system. Sangamo’s pipeline also includes multiple partnered programs and programs with opportunities for partnership and investment.
Forward Looking Statements
This press release contains forward-looking statements regarding Sangamo's current expectations. These forward-looking statements include, without limitation, references to Sangamo's expectations regarding the completion of the offering and its anticipated use of net proceeds from the offering. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ include, but are not limited to, risks and uncertainties related to completion of the offering on the anticipated terms or at all; the effects of macroeconomic factors or financial challenges, including as a result of the ongoing overseas conflict, current or potential future bank failures, inflation and rising interest rates, on the global business environment, healthcare systems and business and operations of Sangamo and its collaborators, including the initiation and operation of clinical trials; and the satisfaction of customary closing conditions related to the offering. These and other risks and uncertainties are described more fully in the section captioned "Risk Factors" in the final prospectus supplement related to the offering to be filed with the Securities and Exchange Commission as well as Sangamo's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on March 13, 2024 and other filings. Forward-looking statements contained in this announcement are made as of this date, and Sangamo undertakes no duty to update such information except as required under applicable law.
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Investor & Media Inquiries
Louise Wilkie
ir@sangamo.com
media@sangamo.com
Source: Sangamo Therapeutics, Inc.
FAQ
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