TEL AVIV - Chemomab Therapeutics Ltd. (NASDAQ:CMMB), a biotech firm specializing in treatments for fibro-inflammatory diseases, has secured approximately $10 million through a private investment in public equity (PIPE) deal, the company announced on Thursday. The transaction is expected to extend the company's operational runway through early 2026.
The PIPE financing saw participation from both new and existing investors, including notable names such as HBM Healthcare Investments and Sphera Biotech Master Fund LP. Under the terms of the agreement, Chemomab will issue 4,188,867 American
Depositary Shares (ADSs) at a price of $1.235 per share, which aligns with the average Nasdaq share price over the past four trading days. Additionally, the company will offer pre-funded warrants to purchase up to 3,908,300 ADSs at the same price, with an exercise price of $0.0001 per ADS.
The closing of the PIPE is expected around July 26, 2024, subject to customary closing conditions. The funds raised are intended to support the development of Chemomab's lead drug candidate, CM-101, as well as for general corporate and working capital purposes.
Chemomab's CM-101 is a monoclonal antibody aimed at neutralizing CCL24 activity, a key driver in fibrosis and inflammation. The company has reported favorable safety profiles and tolerability in clinical and preclinical studies, with the potential to address multiple severe fibro-inflammatory conditions. Positive results from four clinical trials, including a Phase 2 study in primary sclerosing cholangitis and a Phase 2a liver fibrosis trial, have been previously announced by Chemomab.
Capital Markets Advisor Oppenheimer & Co. Inc., along with Maxim (NASDAQ:MXIM) Group and LifeSci Capital, served as advisors for the PIPE.
The securities offered in the PIPE have not been registered under the Securities Act of 1933 and may not be reoffered or resold in the United States absent registration or an applicable exemption from registration requirements.
Concurrently with the PIPE agreement, Chemomab and the investors have entered into a registration rights agreement, committing the company to file a registration statement with the SEC for the resale of the ADSs, including those issuable upon exercise of the pre-funded warrants.
In other recent news, Chemomab Therapeutics Ltd. reported positive results from a Phase 2 trial of its drug CM-101, demonstrating significant improvements in liver stiffness, a marker of disease progression.
The company has plans to engage with the FDA for an end-of-Phase 2 meeting and aims to initiate a Phase 3 trial in 2025. In addition, Chemomab has released findings that strengthen the link between the protein CCL24 and the severity of primary sclerosing cholangitis (PSC), a rare liver disease.
The company has also been granted an extension by Nasdaq to meet the exchange's minimum bid price requirement by November 4, 2024. Furthermore, Chemomab has secured a new patent from the European Patent Office for its monoclonal antibody CM-101, enhancing its intellectual property portfolio.
InvestingPro Insights
Chemomab Therapeutics Ltd. (NASDAQ:CMMB) has recently caught the attention of investors with a notable PIPE transaction aimed at funding the advancement of their lead drug candidate, CM-101. The company's financial maneuvers come at a time when the market is assessing its valuation and growth prospects. According to InvestingPro, Chemomab holds more cash than debt on its balance sheet, which is an encouraging sign for investors concerned about a company's financial stability. However, in line with the company's aggressive growth strategy, Chemomab is also quickly burning through cash, which underscores the importance of the recent capital infusion from the PIPE deal.
From a performance standpoint, Chemomab's stock has experienced significant returns over various periods, with a 25.66% return over the last week, a 38.6% return over the last month, and an impressive 115.48% return over the last three months. These metrics suggest that the company has been gaining positive momentum in the market. Yet, it's important to note that Chemomab is not profitable over the last twelve months, and analysts do not anticipate the company will be profitable this year. This is further substantiated by the company's negative P/E ratio of -0.91, indicating that investors are currently paying more for the stock than its earnings would justify.
Despite these challenges, the company's operational runway is now expected to extend through early 2026 thanks to the recent funding. Investors interested in detailed analysis and additional InvestingPro Tips can find 12 more tips on Chemomab at https://www.investing.com/pro/CMMB. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing an even deeper dive into the company's financials and potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.