BioXcel Therapeutics Announces Closing of $14 Million Registered Direct Offering

Rhea-AI Summary

BioXcel Therapeutics (BTAI) has successfully closed its previously announced registered direct offering, raising $14 million in gross proceeds. The offering included 4,000,000 shares of common stock (or equivalents) and accompanying warrants at a combined price of $3.50 per share.

The accompanying warrants allow purchase of up to 4,000,000 additional shares at an exercise price of $4.20 per share, exercisable immediately and expiring in five years. The purchaser has a two-week option to acquire an additional 4,000,000 shares and warrants at the same terms. Rodman & Renshaw served as the exclusive placement agent for this offering, which closed on March 4, 2025.

Insights

Financial Analyst

BioXcel's $14 million registered direct offering provides essential capital but comes with significant dilution considerations. At $3.50 per share, the offering price represents a 6.7% discount to the current trading price of $3.75. For a microcap company with a market value of approximately $16 million, this financing nearly matches the entire market capitalization.

The structure merits careful analysis. By issuing 4 million new shares, BioXcel is substantially diluting existing shareholders - essentially doubling the outstanding shares. The accompanying warrants (exercisable at $4.20) create additional potential dilution, though the exercise price sitting 12% above current market suggests some optimistic outlook.

Most concerning is the purchaser's two-week option to acquire another 4 million shares and warrants under identical terms. If exercised, this would triple the pre-offering share count, creating extraordinary dilution. This suggests urgent capital needs that couldn't be addressed through less dilutive means.

While the financing strengthens BioXcel's balance sheet and provides operational runway, the dilution magnitude creates a significant hurdle for shareholder value creation. The company must demonstrate substantial progress with its AI-driven neuroscience pipeline to overcome this dilution impact. The warrant overhang may also suppress share price in the near term as the market prices in potential future dilution.

Biotech Investment Specialist

This financing represents a critical lifeline for BioXcel's AI-driven neuroscience programs but carries substantial ownership implications. The $14 million raise significantly bolsters the company's ability to advance its pipeline, yet the financing structure reveals challenging market dynamics for small-cap biotech companies in the current environment.

The scale of this capital raise relative to BioXcel's $16 million market cap indicates this wasn't an opportunistic financing but rather a necessary move to sustain operations. Small biotechs with revenue typically maintain 12-24 month cash runways, and this substantial raise suggests previous reserves were depleting.

The inclusion of warrants with a $4.20 strike price reflects the current reality for pre-commercial biotechs - investors demand additional upside potential to offset development risks. The five-year warrant term provides ample time for potential value creation events like clinical data readouts or partnerships.

For existing shareholders, while significant dilution is unavoidable, the alternative of insufficient funding would likely be worse. BioXcel's AI approach to neuroscience drug development requires sustained investment to reach value-inflection points. This financing provides essential resources to pursue these milestones, though the company must now demonstrate accelerated progress to justify the dilutive impact.

NEW HAVEN, Conn., March 04, 2025 (GLOBE NEWSWIRE) -- BioXcel Therapeutics, Inc. (the “Company”) (Nasdaq: BTAI), a biopharmaceutical company utilizing artificial intelligence to develop transformative medicines in neuroscience, today announced the closing of its previously announced registered direct offering of 4,000,000 shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”) (or common stock equivalents in lieu thereof), and accompanying warrants (the “Accompanying Warrants”) to purchase up to 4,000,000 shares of Common Stock at a combined offering price of $3.50 per Share (or per common stock equivalent in lieu thereof) and Accompanying Warrant, for gross proceeds of approximately $14 million before deducting the placement agent's fees and other offering expenses (excluding the proceeds, if any, from the exercise of the Accompanying Warrants). The Accompanying Warrants have an exercise price of $4.20 per share of Common Stock, are exercisable at any time after the date of issuance, subject to certain ownership limitations, and expire five years from the date of issuance. The Company also granted the purchaser the option, exercisable at any time and from time to time, for two weeks after the closing of this offering to purchase up to an additional 4,000,000 Shares (or common stock equivalents in lieu thereof) and Accompanying Warrants to purchase an additional 4,000,000 shares of Common Stock from the Company, at a combined offering price of $3.50 per Share (or per common stock equivalent in lieu thereof) and Accompanying Warrant.

Rodman & Renshaw LLC acted as the exclusive placement agent for the offering. The offering closed on March 4, 2025.

The securities described above, including the securities issuable upon exercise of the option to purchase additional securities, were offered pursuant to a shelf registration statement on Form S-3 (File No. 333-275261) that was previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on November 13, 2023. The offering of such securities in the offering was made only by means of a prospectus supplement that forms a part of such effective registration statement. A prospectus supplement, which contains additional information relating to the offering, and the accompanying base prospectus were filed with the SEC and are available on the SEC’s website at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying base prospectus may also be obtained from Rodman & Renshaw LLC at 600 Lexington Avenue, 32nd Floor, New York, NY 10022, by telephone at (212) 540-4414, or by email at info@rodm.com.

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

About BioXcel Therapeutics, Inc.
BioXcel Therapeutics, Inc. (Nasdaq: BTAI) is a biopharmaceutical company utilizing artificial intelligence to develop transformative medicines in neuroscience. Its wholly owned subsidiary, OnkosXcel Therapeutics, LLC, is focused on the development of medicines in immuno-oncology. The Company’s drug re-innovation approach leverages existing approved drugs and/or clinically validated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications.

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release other than statements of historical fact should be considered forward-looking statements, including, without limitation, those regarding the intended use of proceeds from the offering. When used herein, words including “anticipate,” “believe,” “can,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking. All forward-looking statements are based upon the Company’s current expectations and various assumptions. The Company believes there is a reasonable basis for its expectations and beliefs, but they are inherently uncertain. The Company may not realize its expectations, and its beliefs may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements as a result of various important factors, including, without limitation, market and other conditions and the important factors discussed under the caption “Risk Factors” in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, and its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such factors may be updated from time to time in its other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While the Company may elect to update such forward-looking statements at some point in the future, except as required by law, it disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.

Contact Information

Corporate/Investors
BioXcel Therapeutics, Inc.
Erik Kopp
1.203.494.7062

Media
Russo Partners
David Schull
1.858.717.2310

Source: BioXcel Therapeutics, Inc.

FAQ

What are the key terms of BioXcel Therapeutics' (BTAI) March 2025 direct offering?

BTAI offered 4 million shares with warrants at $3.50 per combined unit, raising $14 million gross proceeds. Warrants are exercisable at $4.20 per share for 5 years.

How much additional capital could BTAI raise if all warrants from the March 2025 offering are exercised?

If all 4 million warrants are exercised at $4.20 per share, BTAI could raise an additional $16.8 million.

What is the expiration timeline for BTAI's March 2025 offering warrants?

The warrants expire five years from the issuance date of March 4, 2025.

What additional purchase options were granted to buyers in BTAI's March 2025 offering?

Buyers have a two-week option to purchase up to 4 million additional shares and warrants at $3.50 per combined unit.