CAMBRIDGE, Mass. – NeuroBo Pharmaceuticals, Inc. (NASDAQ: NASDAQ:NRBO), a biotech company specializing in cardiometabolic diseases, today detailed a financial move to bolster its capital by $20 million through a private placement and registered direct offering, with potential for an additional $50 million upon the full exercise of associated warrants.
These transactions, priced at-the-market under Nasdaq rules, involve the sale of 4,325,701 shares of common stock or equivalent pre-funded warrants, alongside 763,359 shares in a direct offering.
The offerings also include Series A and B warrants to purchase additional shares, with exercise prices set at $3.93 per share. The Series Warrants are exercisable post-stockholder approval, expiring at different intervals contingent on certain clinical milestones for NeuroBo's obesity treatment candidate, DA-1726.
H.C. Wainwright & Co. is the exclusive placement agent for these offerings, which are expected to close around June 25, 2024, subject to customary closing conditions. The initial proceeds will support general corporate activities and further clinical development of DA-1726. If the Series Warrants are fully exercised, the additional $50 million will fund the completion of the Phase 1 Part 3 clinical trial for DA-1726.
The securities offered in the private placement and the Series Warrants have not been registered under the Securities Act of 1933 and are being sold in transactions not involving a public offering. NeuroBo has committed to file a registration statement with the SEC for the resale of the private placement securities.
This financial strategy is part of NeuroBo's broader efforts to advance its portfolio, including DA-1241, a treatment candidate for Metabolic Dysfunction-Associated Steatohepatitis (MASH). DA-1726, an oxyntomodulin analogue, and DA-1241, a G-protein-coupled receptor 119 agonist, have shown promise in pre-clinical studies for their respective indications.
The information in this article is based on a press release statement from NeuroBo Pharmaceuticals, Inc.
In other recent news, NeuroBo Pharmaceuticals has made significant strides in the development of its drug candidate DA-1241. The company recently reported pre-clinical findings that indicate improved treatment effects for liver fibrosis when DA-1241 is combined with semaglutide. This data was presented at the European Association for the Study of the Liver Congress.
NeuroBo's CEO, Hyung Heon Kim, highlighted the therapeutic potential of DA-1241's mechanism and noted that enrollment for Part 1 of the Phase 2a clinical trial of DA-1241 was completed recently, with Part 2 enrollment underway.
In addition, Maxim (NASDAQ:MXIM) Group initiated coverage on NeuroBo Pharmaceuticals, assigning a Buy rating and citing the potential of the company's two promising drugs, DA-1726 and DA-1241. NeuroBo has also completed the first part of its Phase 2a clinical trial for DA-1241, a novel treatment candidate for metabolic dysfunction-associated steatohepatitis (MASH), with full trial data expected in the second half of this year.
Furthermore, NeuroBo announced the upcoming presentation of its research findings at two key scientific conferences, featuring pre-clinical data on its drug candidates DA-1241 and DA-1726, developed for MASH and obesity, respectively. These recent developments underline NeuroBo's active role in the cardiometabolic disease treatment landscape.
InvestingPro Insights
In light of NeuroBo Pharmaceuticals' recent financial endeavors to support their clinical developments, a look at the company's financial health and market performance provides a broader context for investors. The current market capitalization of NeuroBo stands at approximately $19.92 million, which reflects the company's valuation in the eyes of the market.
An InvestingPro Tip highlights that NeuroBo holds more cash than debt on its balance sheet, which is a positive sign for investors as it suggests the company has a cushion to fund operations and navigate through its clinical trials without the immediate need for additional financing. Additionally, the company's liquid assets exceed its short-term obligations, providing further financial stability in the near term.
Still, it is worth noting that NeuroBo is quickly burning through cash and has not been profitable over the last twelve months. The company also suffers from weak gross profit margins and a valuation that implies a poor free cash flow yield. These factors may raise concerns about the long-term sustainability of the company's financial position and its ability to deliver shareholder value.
Investors should also be aware that NeuroBo's stock price has often moved in the opposite direction of the market and has performed poorly over the last decade, with a significant fall in price over the last five years. This volatility and downward trend could indicate underlying challenges in the company's operations or market sentiment.
For those interested in a more comprehensive analysis, InvestingPro offers additional insights with a total of 9 InvestingPro Tips for NeuroBo, which can be found at https://www.investing.com/pro/NRBO. To access these valuable tips and metrics, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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