Celularity and Genting Leaders Comments on Closing $21 Million Financing Transactions
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Insights
The recent financing transactions by Celularity Inc. signal a robust vote of confidence from its largest investor and an existing lender. The infusion of $21 million is a strategic move to solidify the company's financial position. By repaying the outstanding amounts to Yorkville, Celularity has effectively reduced its debt obligations, which may improve its debt-to-equity ratio—a key metric that investors closely monitor. The commitment from both Dragasac and Resorts World Inc. to increase their financial stakes indicates potential long-term value in Celularity's operations and future growth prospects.
From a financial perspective, the allocation of fresh capital towards strengthening the balance sheet and providing working capital is a prudent approach. It suggests that Celularity is prioritizing financial stability and operational efficiency. This could have positive implications for the stock's performance as it may reduce volatility and enhance investor confidence. However, the terms of the private placement and the senior secured loan, such as interest rates and warrant exercise prices, will be crucial in assessing the long-term cost of capital and its impact on shareholder value.
Celularity’s strategic focus on cellular medicine, advanced biomaterial products and biobanking aligns with industry trends towards personalized medicine and regenerative therapies. The additional capital aimed at expanding these areas could enable Celularity to capitalize on the growing demand in both the United States and Asia. The biotechnology sector is known for its high research and development costs and the ability to secure funding is often a critical factor in a company's ability to innovate and bring products to market.
With the backing of significant players such as Dragasac and RWI, Celularity may have an advantage in scaling its operations and investing in research collaborations. The emphasis on growing operating revenue is a positive sign for potential investors, as it suggests a shift towards revenue generation and a move away from reliance solely on external funding. The market's reception to these financial moves will depend on Celularity's ability to execute its growth strategies and translate the capital infusion into tangible financial results.
The biotechnology industry is characterized by long development cycles and a high burn rate. Celularity's recent capital raise is significant as it provides the necessary runway to continue its research and development efforts in allogeneic cell therapies and biomaterial products without the immediate pressure of fundraising. The mention of repaying the pre-paid advance agreement also indicates a strategic move to avoid dilutive financing options that could devalue existing shares.
Additionally, the focus on operational revenue is indicative of Celularity's transition from a development-stage company to one that is beginning to commercialize its products. This is a critical phase for biotech companies, as it is often accompanied by increased scrutiny from regulatory agencies and the need for effective go-to-market strategies. The ability to generate revenue from advanced biomaterial products and biobanking businesses, alongside contract manufacturing operations, may serve as a diversification strategy, reducing the risk associated with the highly competitive and uncertain nature of cell therapy research.
Celularity closed two financing transactions on January 16, 2024, totaling
FLORHAM PARK, N.J., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Celularity Inc. (Nasdaq: CELU) (the “Company), a biotechnology company developing allogeneic cell therapies and biomaterial products, today announced that it closed two financing transactions totaling
As detailed in the Form 8-K filed by the Company, one of the two financing transactions is a securities purchase agreement with the Company’s largest investor, Dragasac Limited (“Dragasac”) providing for the private placement of shares of Celularity Class A common stock and accompanying warrants for an aggregate purchase price of approximately
According to Robert J. Hariri, M.D., Ph.D., Chairman, Chief Executive Officer, and founder, “These transactions are important in two fundamental ways. First, both Dragasac and RWI increased their existing financial stakes in Celularity, Dragasac through the
Tan Sri Lim Kok Thay, Chairman and Chief Executive of Genting Berhad, the parent company of Dragasac, commented, “We believe Celularity’s platform businesses in cellular medicine, advanced biomaterial products, and biobanking each have significant growth opportunities, both in the United States as well as in Asia, where there is a large and rapidly growing market for regenerative medicine. Having now improved Celularity’s balance sheet and provided additional working capital, we look for Celularity in 2024 to concentrate on growing its operating revenue and to capitalize on opportunities like those we see in the United States and Asia.”
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995, as well as within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are “forward-looking statements,” including those relating to future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intends,” “may,” “might,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and the negative of terms like these or other comparable terminology, and other words or terms of similar meaning. The forward-looking statements include express or implied statements regarding Celularity’s approach to cellular and regenerative medicine, its expected net sales, its ability to build and maintain sales momentum over prior periods, the advancement of its biomaterial pipeline and new product launches, the ability to expand its products into new markets and indications, its ability to position itself as a regenerative medicine innovator in the emerging science of aging and longevity, among others. Many factors could cause actual results to differ materially from those described in these forward-looking statements, including but not limited to the risk that the research collaboration with Regeneron is unsuccessful; the inherent risks in biotechnological development; the regulatory status of its biomaterial and cell therapy products; Celularity’s ability to develop and maintain sales and marketing capabilities, whether alone or with potential future collaborators; the risks associated with Celularity’s current liquidity as well as developments relating to Celularity’s competitors and industry, along with those risk factors set forth under the caption “Risk Factors” in Celularity’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 31, 2023, and other filings with the SEC. If any of these risks materialize or underlying assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Celularity does not presently know, or that Celularity currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, these forward-looking statements reflect Celularity’s current expectations, plans, or forecasts of future events and views as of the date of this communication. Subsequent events and developments could cause assessments to change. Accordingly, forward-looking statements should not be relied upon as representing Celularity’s views as of any subsequent date, and Celularity undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Celularity Investor Contact:
Carlos Ramirez, Senior Vice President
Celularity Inc.
Carlos.ramirez@celularity.com
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