BriaCell Therapeutics Announces Pricing of $5.5 Million Public Offering

Rhea-AI Summary

BriaCell Therapeutics (Nasdaq: BCTX) has announced the pricing of a $5.5 million public offering, consisting of 7,400,000 common shares and warrants. The combined offering is priced at $0.75 per share and associated warrant. The warrants, exercisable at $0.9375 per share, will be valid for five years upon issuance.

The offering, expected to close on December 13, 2024, is being managed by ThinkEquity as the sole book-running manager. The company plans to use the proceeds for working capital requirements, general corporate purposes, and advancing business objectives. The offering is made pursuant to a shelf registration statement on Form S-3 filed with the SEC.

Positive

• Secured $5.5 million in new funding
• Five-year warrant term provides long-term potential upside

Negative

• Significant shareholder dilution through 7.4 million new shares
• Offering price of $0.75 per share indicates potential discount to market price
• Additional dilution possible through 7.4 million warrant shares

Insights

Financial Analyst

This $5.5 million public offering represents significant dilution, with 7.4 million new shares priced at just $0.75 per share - a substantial discount to recent trading levels. The inclusion of warrants with a $0.9375 strike price could lead to additional future dilution if exercised. While the capital raise provides needed working capital, the pricing terms and size relative to the company's $38.8 million market cap signals challenging market conditions for raising funds. This financing appears to be done out of necessity rather than opportunity, suggesting potential cash burn concerns. The dilutive impact and below-market pricing will likely pressure the stock in the near term as the market digests this significant increase in share count.

Biotech Research Analyst

The need for this dilutive financing raises concerns about BriaCell's cash position and burn rate as they advance their immunotherapy pipeline. While the stated use of proceeds for "working capital requirements and advancement of business objectives" is vague, it suggests the company requires additional runway to reach key clinical milestones. The relatively small raise of $5.5 million may only provide operational runway, potentially necessitating additional future financings. The challenging terms of this offering indicate the company had financing options, which could reflect institutional investors' current view of the program's risk/reward profile or broader market skepticism toward early-stage biotech.

PHILADELPHIA and Vancouver, British Columbia, Dec. 11, 2024 (GLOBE NEWSWIRE) -- BriaCell Therapeutics Corp. (Nasdaq: BCTX, BCTXW) (TSX: BCT) (“BriaCell” or the “Company”), a clinical-stage biotechnology company that develops novel immunotherapies to transform cancer care, today announced the pricing of an underwritten public offering of 7,400,000 common shares and warrants to purchase 7,400,000 common shares at a combined public offering price of $0.75 per share and associated warrant. The warrants will have an exercise price of $0.9375 per share and will be immediately exercisable upon issuance for a period of five years following the date of issuance. All of the common shares and associated warrants in the offering are being offered by the Company. Total gross proceeds from the offering, before deducting underwriters discounts and other offering expenses, are expected to be approximately $5.55 million. The offering is expected to close on December 13, 2024, subject to satisfaction of customary closing conditions. The Company is relying upon the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply its standards to certain transactions involving eligible interlisted issuers on a recognized exchange, such as Nasdaq.

The Company intends to use the net proceeds from the offering for working capital requirements, general corporate purposes, and the advancement of business objectives.

ThinkEquity is acting as the sole book-running manager for the offering.

The securities described above are being offered and sold by the Company pursuant to a shelf registration statement on Form S-3 (File No. 333-276650), including a base prospectus, filed with the U.S. Securities and Exchange Commission (the “SEC”) on January 22, 2024 and declared effective on January 31, 2024. The offering is being made only by means of a written prospectus. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and can be accessed for free on the SEC’s website at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained, when available, from the offices of ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About BriaCell Therapeutics Corp.
BriaCell is a clinical-stage biotechnology company that develops novel immunotherapies to transform cancer care. More information is available at https://briacell.com/.

Forward-Looking Statements
This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will,” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on BriaCell’s current expectations and are subject to inherent uncertainties, risks, and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully under the heading “Risks and Uncertainties” in the Company’s most recent Management’s Discussion and Analysis, under the heading “Risk Factors” in the Company’s most recent Annual Information Form, and under “Risks and Uncertainties” in the Company’s other filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, all of which are available under the Company’s profiles on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. There can be no assurance that BriaCell will be able to complete the offering on the anticipated terms, or at all.  Forward-looking statements contained in this announcement are made as of this date, and BriaCell Therapeutics Corp. undertakes no duty to update such information except as required under applicable law.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

Company Contact:
William V. Williams, MD
President & CEO
1-888-485-6340
info@briacell.com

Media Relations:
Jules Abraham
CORE IR
julesa@coreir.com

Investor Relations Contact:
CORE IR
investors@briacell.com

FAQ

What is the size and price of BriaCell's (BCTX) December 2024 public offering?

BriaCell's public offering consists of 7,400,000 common shares and warrants priced at $0.75 per share and associated warrant, totaling approximately $5.5 million.

What are the terms of BCTX's warrants in the December 2024 offering?

The warrants have an exercise price of $0.9375 per share and will be exercisable immediately upon issuance for a five-year period.

How will BriaCell (BCTX) use the proceeds from the December 2024 offering?

BriaCell plans to use the net proceeds for working capital requirements, general corporate purposes, and the advancement of business objectives.

When is BCTX's December 2024 public offering expected to close?

The offering is expected to close on December 13, 2024, subject to customary closing conditions.