CAMBRIDGE, Mass. - Relay Therapeutics, Inc. (NASDAQ:RLAY), a clinical-stage precision medicine company, has announced the commencement of a $200 million underwritten public offering of its common stock. The company, which specializes in drug discovery utilizing computational and experimental technologies, also plans to offer the underwriters a 30-day option to purchase up to an additional 15% of the shares in the public offering.
The shares are to be sold by Relay Therapeutics directly, with Goldman Sachs (NYSE:GS) & Co. LLC, TD Cowen, Stifel, and BofA Securities serving as joint book-running managers. Raymond James is acting as the co-manager for the offering. The completion of the offering is contingent on market and other conditions, and no assurances can be given regarding the final terms or timing of the offering.
Relay Therapeutics has filed a shelf registration statement with the U.S. Securities and Exchange Commission (SEC), which is currently effective. A preliminary prospectus supplement and accompanying prospectus detailing the offering terms will be filed with the SEC and will be available from the managing firms.
This move comes as part of Relay Therapeutics' efforts to expand its drug discovery capabilities, particularly in the realm of targeted oncology and genetic diseases. The company's Dynamo® platform is designed to target proteins that have been challenging to drug or have not been adequately addressed in the past.
The proposed offering is strictly regulated, and the announcement made clear that the press release does not constitute an offer to sell or a solicitation of an offer to buy these securities. Additionally, the sale of these securities will not be permitted in any jurisdiction where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of that jurisdiction.
Investors are advised that this article is based on a press release statement, and they should consult the preliminary prospectus supplement and accompanying prospectus, among other SEC filings, for more detailed information about the offering and Relay Therapeutics. The company has cautioned that the press release contains forward-looking statements, which are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated.
In other recent news, Relay Therapeutics has reported encouraging interim data for its breast cancer treatment, RLY-2608. The treatment demonstrated a median progression-free survival of 9.2 months, surpassing the 5.5 months achieved with rival therapies. Analysts from TD Cowen reiterated a Buy rating for the company following the positive trial data.
However, the company also announced the termination of its collaboration with Roche (LON:0QQ6), halting further financial benefits or milestone payments. Analysts have adjusted their price targets for Relay Therapeutics in light of these developments. Barclays (LON:BARC) maintained an Overweight rating and raised the stock's price target to $17.00, while BofA Securities revised its price target to $20.00 and maintained a Buy rating. On the other hand, H.C. Wainwright reduced its price target to $18.00 but also maintained a Buy rating.
Relay Therapeutics reported a cash position of approximately $688 million as of the second quarter of 2024, expected to fund operations into 2026. The company plans to initiate a monotherapy solid tumor dose expansion cohort by the end of 2024, and a vascular malformations study in 2025. These are some of the recent developments in the company.
InvestingPro Insights
As Relay Therapeutics embarks on a significant capital-raising initiative, prospective investors can consider some key financial metrics and analyst insights. According to real-time data from InvestingPro, Relay Therapeutics holds a market capitalization of $1.29 billion, reflecting the market's valuation of the company. Despite a challenging environment, the company has managed to maintain a price/book ratio of 1.23 in the last twelve months as of Q2 2024, which may suggest that its assets are valued reasonably in relation to its stock price.
One of the InvestingPro Tips for Relay Therapeutics highlights that the company currently holds more cash than debt on its balance sheet, which could provide a cushion against market downturns and enable continued investment in its drug discovery platform. However, it's also noted that Relay is quickly burning through cash, a factor that investors should consider in light of the company's recent public offering announcement. This cash burn rate may be reflected in the company's gross profit margin, which stands at a negative 836.59%, indicating significant costs relative to revenue.
Moreover, Relay Therapeutics' stock has experienced considerable volatility, with a 1-week total price return showing an 8.1% decline. This volatility could be a point of consideration for investors looking for stability, especially since analysts have revised their earnings downwards for the upcoming period and do not anticipate the company will be profitable this year.
For those considering an investment in Relay Therapeutics, additional context is provided by InvestingPro, which lists over 10 tips that could further guide investment decisions. Access to these tips is available at https://www.investing.com/pro/RLAY, offering a more comprehensive view of the company's financial health and market position.
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