Bio-Path Holdings Announces $4.0 Million Private Placement Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

Bio-Path Holdings (NASDAQ:BPTH) has announced a $4.0 million private placement priced at-the-market under Nasdaq rules. The company will issue and sell 4,597,702 shares of common stock (or equivalents), along with series A and B warrants to purchase additional shares. The purchase price is set at $0.87 per share, with warrants exercisable at $1.00 per share. The offering is expected to close around October 10, 2024.

H.C. Wainwright & Co. is acting as the exclusive placement agent. Bio-Path intends to use the net proceeds for working capital and general corporate purposes. The securities are being offered under Section 4(a)(2) of the Securities Act and have not been registered. The company has agreed to file a resale registration statement for these securities.

Positive

• Secured $4.0 million in gross proceeds through private placement
• Priced at-the-market under Nasdaq rules, potentially indicating fair market value
• Inclusion of warrants may provide additional future funding if exercised

Negative

• Potential dilution for existing shareholders due to issuance of new shares and warrants
• Offering price of $0.87 per share suggests a low stock valuation
• Cancellation of previously issued warrants may indicate restructuring of prior agreements

Insights

Financial Analyst

This private placement is a significant financial move for Bio-Path Holdings, raising $4.0 million in gross proceeds. The deal structure, involving common stock and warrants, is complex but typical for small biotech companies seeking capital. The pricing at $0.87 per share is at-the-market, which is generally viewed positively as it doesn't involve a steep discount.

However, there are potential dilution concerns. The company is issuing 4,597,702 new shares, plus warrants for an additional 12,815,314 shares. This could significantly increase the share count if all warrants are exercised. The $1.00 warrant exercise price provides a slight premium to the current share price.

The cancellation of previously issued warrants is a positive, reducing potential dilution. The use of proceeds for working capital suggests the company needs funds for ongoing operations, which is common in pre-revenue biotech firms. Overall, while the financing provides needed capital, investors should be aware of the dilution risk and the company's cash burn rate.

Biotech Industry Expert

This financing deal reflects the challenging environment for small-cap biotech companies. Bio-Path's DNAbilize® platform, focusing on targeted nucleic acid cancer drugs, is in a cutting-edge area of oncology research. However, the need for frequent capital raises is typical in this sector, especially for companies with ongoing clinical trials.

The $4 million raised is relatively modest and may only provide a runway extension. Investors should closely monitor the company's burn rate and clinical trial progress. The success of Bio-Path's pipeline, particularly any positive data from ongoing trials, will be important for future financing options and potential partnerships.

The at-the-market pricing suggests there's some market interest in the company's potential, but the complex warrant structure indicates a need to provide additional incentives to investors. This deal structure balances immediate capital needs with potential future upside for investors willing to take on the risk of a small-cap biotech.

HOUSTON, Oct. 08, 2024 (GLOBE NEWSWIRE) -- Bio-Path Holdings, Inc. (NASDAQ:BPTH) (“Bio-Path” or the “Company”), a biotechnology company leveraging its proprietary DNAbilize® liposomal delivery and antisense technology to develop a portfolio of targeted nucleic acid cancer drugs, today announced that it has entered into definitive agreements for the issuance and sale of an aggregate of 4,597,702 shares of its common stock (or common stock equivalents in lieu thereof), series A warrants to purchase up to 6,407,657 shares of common stock and short-term series B warrants to purchase up to 6,407,657 shares of common stock at a purchase price of $0.87 per share of common stock (or per common stock equivalent in lieu thereof) and accompanying warrants in a private placement priced at-the-market under Nasdaq rules. The series A warrants and short-term series B warrants will have an exercise price of $1.00 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants (the “Stockholder Approval Date”). The series A warrants will expire five years from the Stockholder Approval Date and the short-term series B warrants will expire twenty-four months from the Stockholder Approval Date. The closing of the offering is expected to occur on or about October 10, 2024, subject to the satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The gross proceeds to the Company from the offering are expected to be approximately $4.0 million, before deducting the placement agent’s fees and other offering expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the warrants. The Company currently intends to use the net proceeds from the offering for working capital and general corporate purposes.

The securities described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the securities described above, including the shares of common stock underlying the warrants, may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Pursuant to a registration rights agreement, the Company has agreed to file a resale registration statement covering the securities described above.

In addition, effective on the closing of the private placement certain outstanding series A warrants to purchase up to an aggregate of 1,809,955 shares of the Company’s common stock series B warrants to purchase up to an aggregate of 1,809,955 shares of the Company’s common stock issued in June 2024 will be cancelled.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, 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 the registration or qualification under the securities laws of any such state or other jurisdiction.

About Bio-Path Holdings, Inc.

Bio-Path is a biotechnology company developing DNAbilize®, a novel technology that has yielded a pipeline of RNAi nanoparticle drugs that can be administered with a simple intravenous infusion. Bio-Path’s lead product candidate, prexigebersen (BP1001, targeting the Grb2 protein), is in a Phase 2 study for blood cancers, and BP1001-A, a drug product modification of prexigebersen, is in a Phase 1/1b study for solid tumors. The Company’s second product, BP1002, which targets the Bcl-2 protein, is being evaluated for the treatment of blood cancers and solid tumors, including lymphoma and acute myeloid leukemia. In addition, an IND application is expected to be filed for BP1003, a novel liposome-incorporated STAT3 antisense oligodeoxynucleotide developed by Bio-Path as a specific inhibitor of STAT3.

For more information, please visit the Company's website at www.biopathholdings.com.

Forward-Looking Statements

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the federal securities laws, including statements related to the completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of proceeds therefrom. These statements are based on management's current expectations and accordingly are subject to uncertainty and changes in circumstances. Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Any statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including market and other conditions, Bio-Path’s ability to regain and maintain compliance with Nasdaq’s continued listing requirements, Bio-Path’s ability to raise needed additional capital on a timely basis in order for it to continue its operations, have success in the clinical development of its technologies, the timing of enrollment and release of data in such clinical studies, the accuracy of such data, limited patient populations of early stage clinical studies and the possibility that results from later stage clinical trials with much larger patient populations may not be consistent with earlier stage clinical trials, the maintenance of intellectual property rights, that patents relating to existing or future patent applications will be issued or that any issued patents will provide meaningful protection of our drug candidates, the impact, risks and uncertainties related to global pandemics, including the COVID-19 pandemic, and actions taken by governmental authorities or others in connection therewith, and such other risks which are identified in Bio-Path's most recent Annual Report on Form 10-K, in any subsequent quarterly reports on Form 10-Q and in other reports that Bio-Path files with the Securities and Exchange Commission from time to time. These documents are available on request from Bio-Path or at www.sec.gov. Bio-Path disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:

Investors

Will O’Connor
Stern Investor Relations, Inc.
212-362-1200
will@sternir.com

Doug Morris
Investor Relations
Bio-Path Holdings, Inc.
832-742-1369

FAQ

What is the size and price of Bio-Path Holdings' (BPTH) recent private placement?

Bio-Path Holdings (BPTH) announced a $4.0 million private placement priced at $0.87 per share of common stock (or equivalent) and accompanying warrants.

When is the expected closing date for Bio-Path Holdings' (BPTH) private placement?

The closing of Bio-Path Holdings' (BPTH) private placement is expected to occur on or about October 10, 2024, subject to customary closing conditions.

How many shares and warrants are being issued in Bio-Path Holdings' (BPTH) private placement?

Bio-Path Holdings (BPTH) is issuing 4,597,702 shares of common stock (or equivalents), series A warrants for up to 6,407,657 shares, and series B warrants for up to 6,407,657 shares.

What is the exercise price and expiration of the warrants in Bio-Path Holdings' (BPTH) private placement?

The warrants in Bio-Path Holdings' (BPTH) private placement have an exercise price of $1.00 per share. Series A warrants expire five years from the Stockholder Approval Date, while series B warrants expire 24 months from that date.