WALTHAM, Mass. - Checkpoint Therapeutics , Inc. (NASDAQ:CKPT), a clinical-stage company focused on immunotherapy and targeted oncology, has announced a definitive agreement for a registered direct offering and a concurrent private placement. The transaction involves the sale of approximately 5.85 million shares at $2.05 per share, aiming to raise gross proceeds of around $12 million. This offering is priced at-the-market under Nasdaq rules and is expected to close on or about Wednesday, subject to customary conditions.
In the private placement, Checkpoint will also issue unregistered warrants to purchase an equivalent number of shares, exercisable at the same price, starting on the date stockholder approval is received. These warrants will be valid for five years following their issuance. H.C. Wainwright & Co. is serving as the exclusive placement agent for the offering.
The funds raised are intended for working capital and general corporate purposes. The shares of common stock (or equivalents) are being offered pursuant to a shelf registration statement that was declared effective by the Securities and Exchange Commission (SEC) on May 5, 2023. A final prospectus supplement describing the terms of the offering will be filed with the SEC.
Checkpoint Therapeutics, headquartered in Waltham, MA, is notably working on cosibelimab, an anti-PD-L1 antibody, and olafertinib, an EGFR inhibitor, both of which are being evaluated as potential treatments for various types of cancer. The company was founded by Fortress Biotech, Inc. (NASDAQ:FBIO).
This financial move comes as Checkpoint continues to develop its product candidates. The offering's details are available on the SEC's website, and electronic copies of the prospectus supplement can be obtained from H.C. Wainwright & Co.
In other recent news, Checkpoint Therapeutics has completed the resubmission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for their drug, cosibelimab. This resubmission follows a Complete Response Letter (CRL) from the FDA last year, which noted issues from a third-party manufacturing inspection, not the clinical data, safety, or labeling of cosibelimab. The company asserts that their resubmission strategy, agreed upon with the FDA, addresses all approvability deficiencies noted in the CRL.
Cosibelimab, an anti-programmed death ligand-1 (PD-L1) antibody, is intended for patients with metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC) who are unable to undergo curative surgery or radiation. The drug has shown promising results in studies for recurrent or metastatic cancers, with pivotal results demonstrating significant response rates in both metastatic and locally advanced cSCC.
The antibody is reported to potentially differentiate from other marketed PD-1 and PD-L1 antibodies due to its high affinity and sustained tumor occupancy, which may reactivate the immune response against tumors. Additionally, cosibelimab's functional Fc domain may induce antibody-dependent cell-mediated cytotoxicity (ADCC), potentially enhancing its efficacy.
InvestingPro Insights
As Checkpoint Therapeutics (NASDAQ:CKPT) embarks on its latest capital-raising effort, investors may find it worthwhile to consider key financial metrics and insights provided by InvestingPro. With a market capitalization of approximately $75.54 million, the company's financial health and growth prospects can be assessed through various lenses.
One of the notable InvestingPro Tips for Checkpoint is its cash position, which outweighs its debt on the balance sheet. This could provide some comfort to investors regarding the company's ability to manage its financial obligations in the short term. Additionally, the company's focus on immunotherapy and targeted oncology positions it as a niche player in the pharmaceutical industry, which can be a double-edged sword—offering the potential for significant rewards in the case of successful drug development, but also bearing the risk inherent in a highly specialized market.
InvestingPro Data further reveals that Checkpoint is trading at a high revenue valuation multiple, with a revenue of just $0.07 million in the last twelve months as of Q1 2024. This is coupled with a substantial gross profit margin decline of -53189.71% during the same period, emphasizing the challenges the company faces in achieving profitability. Moreover, the company's short-term obligations exceed its liquid assets, indicating potential liquidity risks that investors should be aware of.
For those looking to delve deeper into Checkpoint Therapeutics' financials and gain additional insights, InvestingPro offers more tips that can help in making informed investment decisions. Interested investors can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing access to an extended list of tips that could further guide investment strategies. Currently, there are 6 additional InvestingPro Tips available for Checkpoint Therapeutics.
In summary, while the direct offering and private placement aim to bolster Checkpoint's working capital and support its corporate purposes, potential investors should carefully consider the company's valuation, cash position, and the challenges it faces in profitability and liquidity. These factors, combined with the company's status as a niche player in the pharmaceutical industry, will play critical roles in its future financial performance.
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