Allogene Therapeutics Announces Pricing of $110 million Offering of Common Stock
Allogene Therapeutics (Nasdaq: ALLO), a clinical-stage biotech firm, announced a $110 million common stock offering, pricing 37,931,035 shares at $2.90 each. The offering, backed by mutual funds, institutional investors, and the company's board and executives, is expected to close by May 16, 2024. Managed by Goldman Sachs, the offering is under a shelf registration statement filed in March and declared effective by the SEC in April 2024. The proceeds will be used for continued development of their AlloCAR T™ products for cancer and autoimmune diseases.
- Allogene Therapeutics raised $110 million through its common stock offering.
- Offering price set at $2.90 per share indicates investor confidence.
- Backed by mutual funds, institutional investors, and the company's board and executives, indicating strong internal and external support.
- Proceeds to support the continued development of AlloCAR T™ products, which could drive future growth.
- The stock offering could lead to shareholder dilution due to the increase in the number of shares outstanding.
- The expected closing date of May 16, 2024, introduces a short-term risk if market conditions change.
- Gross proceeds are before deducting underwriting discounts, commissions, and expenses, reducing the net amount received.
Insights
The recent announcement by Allogene Therapeutics about the pricing of a $110 million common stock offering is a noteworthy development for investors. This move is a common strategy for companies, especially in biotech, to raise capital for ongoing and future projects. By offering 37,931,035 shares at a price of $2.90 per share, the company is tapping into the equity market to generate the necessary funds.
Key Insights:
The involvement of mutual funds and large institutional investors, along with healthcare specialists, suggests strong backing and confidence in the company's prospects. The participation of board members and executive management further underscores this confidence.
Implications:
While the influx of $110 million will bolster the company's balance sheet, it also means dilution for existing shareholders, as more shares will be in circulation. Investors should weigh this dilution against the potential benefits of the capital raised, which could be used for the development of their AlloCAR T™ products. Additionally, the pricing at $2.90 per share may indicate the current market sentiment towards the company's valuation.
It's also essential to note that this offering is part of a larger shelf registration filed earlier. This allows the company to issue new shares as needed, providing flexibility in their capital-raising efforts.
Overall, while the immediate dilution effect might concern some investors, the long-term benefits of having additional funds to advance their pipeline could outweigh these concerns. However, it's important for investors to monitor how effectively the company utilizes these proceeds.
Allogene Therapeutics' decision to raise $110 million through a common stock offering is a strategic move to secure funds necessary for furthering their research and development efforts, especially in the competitive field of allogeneic CAR T cell therapy. This technology, which involves using donor-derived immune cells modified to target cancer cells, represents a cutting-edge therapeutic approach with significant market potential.
Key Insights:
The price point of $2.90 per share reflects the prevailing market conditions and investor sentiment towards the biotech sector, which can be volatile. The anchoring by institutional investors and healthcare specialists indicates a substantial vote of confidence in the company's future prospects and its technology's potential.
Market Dynamics:
This equity offering underscores the inherent risks and opportunities in biotech investment. For retail investors, it is essential to understand that while such offerings can dilute existing holdings, they are also important for the sustained growth and development of pioneering technologies. The funds raised will likely be deployed towards clinical trials and possibly expanding the company's pipeline, which could, in turn, drive future valuations if successful.
Given the current competitive landscape in CAR T therapies, securing sufficient funding is critical for Allogene to maintain its position and progress. Investors should keep a close watch on subsequent announcements regarding the use of these funds and the progress of their clinical trials, as these will be key indicators of the company's trajectory.
Allogene Therapeutics' successful pricing of its $110 million common stock offering is a pivotal step in ensuring the company has the necessary resources to continue advancing its portfolio of allogeneic CAR T cell therapies. These therapies, designed to treat cancer and autoimmune diseases, are at the forefront of medical innovation.
Significance for R&D:
For biotech companies, securing substantial funding is important for covering the extensive costs associated with clinical trials and regulatory approvals. The $110 million raised will likely provide Allogene with a significant runway to advance its clinical programs, particularly as allogeneic CAR T cells represent a novel and highly anticipated approach in cancer treatment.
Clinical Implications:
Allogeneic CAR T cells offer several advantages over autologous therapies, including off-the-shelf availability, reduced production times and potentially lower costs. This funding will enable Allogene to further its research, possibly accelerating the timelines for bringing these therapies to market.
However, the biotech sector is inherently high-risk, with clinical outcomes and regulatory decisions being critical determinants of success. The involvement of healthcare specialists and institutional investors in this offering is a positive sign, suggesting confidence in the company's clinical strategy and potential.
Retail investors should remain informed about the progress of Allogene's clinical trials and regulatory milestones, as these will be key determinants of the company's future success and impact on stock performance.
SOUTH SAN FRANCISCO, Calif., May 13, 2024 (GLOBE NEWSWIRE) -- Allogene Therapeutics, Inc. (Nasdaq: ALLO), a clinical-stage biotechnology company pioneering the development of allogeneic CAR T (AlloCAR T™) products for cancer and autoimmune disease, today announced the pricing of an underwritten offering of 37,931,035 shares of its common stock at a price of
The offering is anchored by mutual funds and large institutional investors and includes leading healthcare specialists as well as certain members of the Allogene Board of Directors and Executive Management Team. The offering is expected to close on or about May 16, 2024, subject to customary closing conditions.
Goldman Sachs & Co. LLC is acting as sole book-running manager for the offering.
The securities described above are being offered by Allogene pursuant to a shelf registration statement (including a prospectus) filed on March 14, 2024 with the Securities and Exchange Commission (SEC), which was declared effective on April 25, 2024. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available for free on the SEC's website at http://www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus relating to the offering, when available, may be obtained from: Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, or by telephone at (866) 471-2526, or by email at prospectus-ny@ny.email.gs.com.
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 Allogene Therapeutics
Allogene Therapeutics, with headquarters in South San Francisco, is a clinical-stage biotechnology company pioneering the development of allogeneic chimeric antigen receptor T cell (AlloCAR T™) products for cancer and autoimmune disease. Led by a management team with significant experience in cell therapy, Allogene is developing a pipeline of “off-the-shelf” CAR T cell product candidates with the goal of delivering readily available cell therapy on-demand, more reliably, and at greater scale to more patients.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The press release may, in some cases, use terms such as "predicts," "believes," "potential," "proposed," "continue," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "will," "should" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements include statements regarding the completion and timing of the offering. Various factors may cause differences between Allogene’s expectations and actual results as discussed in greater detail in Allogene’s filings with the SEC, including without limitation in its Form 10-Q for the quarter ended March 31, 2024 filed on May 13, 2024. Any forward-looking statements that are made in this press release speak only as of the date of this press release. Allogene assumes no obligation to update the forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.
AlloCAR T is a trademark of Allogene Therapeutics, Inc.
Allogene Media/Investor Contact:
Christine Cassiano
EVP, Chief Corporate Affairs & Brand Strategy Officer
Christine.Cassiano@allogene.com
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