Aptevo Therapeutics Announces $3.0 Million Offering Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

Aptevo Therapeutics Inc. (NASDAQ:APVO) has announced a $3.0 million registered direct offering priced at-the-market under Nasdaq rules. The offering includes 9,090,910 shares of common stock or pre-funded warrants, along with warrants to purchase up to 18,181,820 additional shares. The purchase price is set at $0.33 per share and associated Common Warrant. Each share comes with two Common Warrants, exercisable at $0.33 per share upon stockholder approval, expiring in five years. The offering is expected to close around September 18, 2024. Roth Capital Partners is acting as the placement agent. Aptevo plans to use the net proceeds for clinical development of product candidates, working capital, and general corporate purposes. Additionally, the company will amend certain existing warrants from previous issuances, reducing their exercise price to $0.33 per share.

Positive

• Secured $3.0 million in gross proceeds through a registered direct offering
• Offering includes additional warrants, potentially increasing future capital if exercised
• Funds to be used for clinical development and working capital, supporting ongoing operations

Negative

• Offering price of $0.33 per share indicates a low valuation
• Significant dilution for existing shareholders due to the large number of new shares and warrants
• Amendment of existing warrants to lower exercise price further dilutes shareholder value
• Need for additional funding suggests potential cash flow issues

Insights

Financial Analyst

Aptevo's $3 million offering at $0.33 per share represents a significant dilution for existing shareholders, given the company's current market cap of around $5 million. This move, while providing necessary capital, signals financial strain. The inclusion of warrants at the same price further amplifies potential dilution. The amendment of previous warrants to a lower exercise price of $0.33 is particularly concerning, indicating a downward pressure on the stock price.

The use of proceeds for clinical development and working capital suggests ongoing cash burn without immediate revenue prospects. This financing strategy, while keeping the company afloat, raises questions about Aptevo's long-term viability and ability to bring its immune-oncology therapeutics to market without significant further dilution.

Biotech Industry Expert

Aptevo's reliance on frequent capital raises is typical for early-stage biotech companies, but the terms of this offering are unfavorable. The $0.33 price point and the 2:1 warrant ratio suggest weak investor confidence in the company's ADAPTIR™ and ADAPTIR-FLEX™ platforms. However, the focus on immune-oncology remains a hot area in biotech, which could attract future interest if clinical progress is demonstrated.

The need for stockholder approval for warrant exercises adds a layer of uncertainty to the deal. This offering buys Aptevo time, but puts pressure on management to show significant clinical progress in the near term to justify further investment and avoid a potential downward spiral in market valuation.

Market Sentiment Analyst

The market is likely to react negatively to this news. The pricing "at-the-market" under Nasdaq rules typically indicates a lack of premium and suggests investor enthusiasm. The involvement of "healthcare-focused and institutional investors" provides some credibility, but the terms are unfavorable for existing shareholders.

The amendment of previous warrants to a lower price is a red flag, potentially signaling a lack of confidence in maintaining higher stock prices. This move could trigger a sell-off from discouraged investors. However, if Aptevo can quickly demonstrate progress in its clinical pipeline using these funds, it might mitigate some negative sentiment. Traders should be cautious, as volatility is likely in the short term.

SEATTLE, WA / ACCESSWIRE / September 16, 2024 / Aptevo Therapeutics Inc. (NASDAQ:APVO), a clinical-stage biotechnology company focused on developing novel immune-oncology therapeutics based on its proprietary ADAPTIR™ and ADAPTIR-FLEX™ platform technologies, today announced that it has entered into securities purchase agreements with certain healthcare-focused and institutional investors to purchase (i) 9,090,910 shares of its common stock or pre-funded warrants in lieu thereof and (ii) warrants to purchase up to an aggregate of 18,181,820 shares of its common stock (the "Common Warrants") at a purchase price of $0.33 per share and associated Common Warrant in a registered direct offering priced at-the-market under Nasdaq rules. Each share of common stock is being offered together with two Common Warrants, each to purchase one share of common stock. The Common Warrants will have an exercise price of $0.33 per share, are exercisable upon stockholder approval, and will expire five years following the date stockholder approval.

The offering is expected to close on or about September 18, 2024, subject to customary closing conditions. Roth Capital Partners is acting as placement agent of the offering. Gross proceeds, before deducting placement agent fees and commissions and offering expenses, are expected to be approximately $3.0 million. The company intends to use the net proceeds from the offering for the continued clinical development of its product candidates, working capital, and other general corporate purposes.

The securities described above are being offered pursuant to a registration statement on Form S-1 (File No. 333-281892), that was declared effective by the U.S. Securities and Exchange Commission ("SEC"), on September 16, 2024. The offering is being made solely by means of a prospectus. Copies of the accompanying prospectus relating to and describing the terms of the offering may be obtained, when available, at the SEC's website at www.sec.gov or by contacting Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660 or by email at rothecm@roth.com. This press release does not and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or other 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 other jurisdiction. Any offer, if at all, will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement.

The Company also has agreed to amend certain existing warrants that were previously issued in July 2024, April 2024 and November 2023 to purchase up to 11,822,774 shares of the Company's common stock and have exercise price of $0.515 per share, effective upon the closing of the offering, such existing warrants will have a reduced exercise price of $0.33 per share and shall become exercisable upon stockholder approval.

About Aptevo Therapeutics Inc.
Aptevo Therapeutics Inc. is a clinical-stage biotechnology company focused on developing novel immuno-oncology therapies for the treatment of cancer. Aptevo is seeking to improve treatment outcomes of cancer patients. For more information, please visit www.aptevotherapeutics.com.

Safe Harbor Statement
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including, without limitation, statements regarding the completion, timing, size and use of proceeds of the offering, the satisfaction of customary closing conditions related to the offering and any other statements containing the words "may," "continue to," "believes," "expects," "optimism," "potential," "designed," "promising," "plans," "will" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on Aptevo's current intentions, beliefs, and expectations regarding future events. Aptevo cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from Aptevo's expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement.

There are several important factors that could cause Aptevo's actual results to differ materially from those indicated by such forward-looking statements, including a deterioration in Aptevo's business or prospects; uncertainties related to market conditions, the satisfaction of customary closing conditions related to the offering and changes in regulatory, social, macroeconomic, and political conditions. For instance, actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the uncertainties inherent in the results of preliminary data and preclinical studies being predictive of the results of later-stage clinical trials, initiation, enrollment and maintenance of patients, and the completion of clinical trials, the availability and timing of data from ongoing clinical trials, the trial design includes combination therapies that may make it difficult to accurately ascertain the benefits of APVO436, expectations for the timing and steps required in the regulatory review process, expectations for regulatory approvals, the impact of competitive products, our ability to enter into agreements with strategic partners or raise funds on acceptable terms or at all and other matters that could affect the availability or commercial potential of Aptevo's product candidates, business or economic disruptions due to catastrophes or other events, including natural disasters or public health crises such as the coronavirus (referred to as COVID-19), geopolitical risks, including the current war between Russia and Ukraine, war between Israel and Hamas, and macroeconomic conditions such as economic uncertainty, rising inflation and interest rates, increased market volatility and decreased consumer confidence. These risks are not exhaustive, Aptevo faces known and unknown risks. Additional risks and factors that may affect results are set forth in Aptevo's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and its subsequent reports on Form 10-Q and current reports on Form 8-K. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from Aptevo's expectations in any forward-looking statement. Any forward-looking statement speaks only as of the date of this press release, and, except as required by law, Aptevo does not assume any obligation to update any forward-looking statement to reflect new information, events, or circumstances.

CONTACT:
Miriam Weber Miller
Aptevo Therapeutics
Email: IR@apvo.com or Millerm@apvo.com
Phone: 206-859-6628

SOURCE: Aptevo Therapeutics

View the original press release on accesswire.com

FAQ

What is the size and price of Aptevo Therapeutics' (APVO) latest offering?

Aptevo Therapeutics (APVO) announced a $3.0 million registered direct offering priced at $0.33 per share and associated Common Warrant.

When is the expected closing date for Aptevo Therapeutics' (APVO) new offering?

The offering is expected to close on or about September 18, 2024, subject to customary closing conditions.

How many new shares and warrants are being issued in Aptevo Therapeutics' (APVO) offering?

The offering includes 9,090,910 shares of common stock or pre-funded warrants, along with warrants to purchase up to 18,181,820 additional shares.

What will Aptevo Therapeutics (APVO) use the proceeds from the offering for?

Aptevo plans to use the net proceeds for clinical development of product candidates, working capital, and other general corporate purposes.