Cellectar Biosciences Announces Exercise of Tranche B Warrants and Purchase of New Warrants for Approximately $19.4 million with the Potential to Raise Up to an Additional $73.3 Million

Rhea-AI Summary

Cellectar Biosciences (NASDAQ: CLRB) announced the exercise of Tranche B warrants and purchase of new warrants, generating approximately $19.4 million in gross proceeds. The transaction, led by Rosalind Advisors, includes new warrants with potential to raise up to an additional $73.3 million. The new warrants are structured in three tranches (A, B, and C) with exercise prices of $2.52, $4.00, and $5.50 per share, respectively.

The company plans to file an NDA for iopofosine I 131 to treat Waldenstrom's macroglobulinemia in Q4 2024, seeking priority review. Funds from the warrant exercises are expected to support Cellectar's path to commercialization. The company will file a resale registration statement for the new warrants within 30 days.

Positive

• Raised $19.4 million in gross proceeds from warrant exercises
• Potential to raise an additional $73.3 million from new warrants
• Planned NDA filing for iopofosine I 131 in Q4 2024
• Seeking priority review for iopofosine I 131
• Funds expected to support commercialization efforts

Negative

• Dilution of existing shareholders due to warrant exercises and potential future exercises
• New warrants not registered under Securities Act, limiting immediate tradability

Insights

Financial Analyst

Cellectar Biosciences' announcement of the exercise of Tranche B warrants and the purchase of new warrants is significant for several reasons. Firstly, the immediate gross proceeds of $19.4 million provide a substantial liquidity boost. This infusion of capital is critical for a biopharmaceutical company in the late stages of clinical development, as it supports ongoing R&D and operational expenses without the immediate need for additional debt or equity financing, which could dilute existing shareholders.

The potential to raise up to an additional $73.3 million through the new warrants is also notable. These funds, contingent upon specific milestones such as FDA actions and revenue targets, represent a significant future capital influx that hinges on the successful progress and commercialization of iopofosine I 131.

From an investment perspective, such a structured financing deal illustrates the company's strategic approach to leveraging its developmental milestones to secure funding. Investors should monitor key triggers such as the FDA's review timelines and market reactions to these milestones, as they will directly impact the exercise of these warrants and the subsequent capital inflows.

Market Research Analyst

The structured warrant exercise plan ties the company's future capital raise to specific regulatory and commercial achievements, which adds an interesting layer of predictability and risk for investors. The Tranche A, B and C warrants are pegged to critical milestones related to iopofosine I 131, including FDA goal dates, approval and revenue thresholds. This structure aligns the interests of the company and investors, as the success of the drug directly correlates with the company’s financial health.

For retail investors, the staggered trigger points at various stock price levels ($2.52, $4.00 and $5.50) offer a clear roadmap of the company's anticipated progress. The higher exercise prices for Tranche B and C warrants suggest the company's confidence in achieving significant market penetration and revenue generation post-approval.

This news could stimulate short-term buying interest among investors anticipating these milestones. However, the long-term outlook remains heavily dependent on the successful commercialization of iopofosine I 131.

Medical Research Analyst

The financial maneuvering around the Tranche B and new warrants is deeply tied to the clinical and regulatory progress of iopofosine I 131, a drug targeting Waldenstrom’s macroglobulinemia. The company’s commitment to file a New Drug Application (NDA) and seek priority review highlights its confidence in the drug’s clinical data.

For investors, this translates to a clear dependency on the drug’s success. The FDA’s assignment of a Prescription Drug User Fee Act goal date and potential approval are pivotal events that could significantly drive the company's valuation and stock price. The structured warrant system ensures that future capital is directly linked to these high-impact regulatory milestones, aligning financial and clinical outcomes.

In the biopharmaceutical sector, such strategic financial planning underscores the critical nature of clinical developments. Investors should closely follow the NDA filing and subsequent FDA communications as these will be important in determining the likelihood of warrant exercises and the company's near-term financial health.

FLORHAM PARK, N.J., July 22, 2024 (GLOBE NEWSWIRE) -- Cellectar Biosciences, Inc. (NASDAQ: CLRB), a late-stage clinical biopharmaceutical company focused on the discovery, development and commercialization of drugs for the treatment of cancer, today announced that the majority of Tranche B warrants issued under its September 2023 private placement have been exercised for Series E preferred stock, convertible into the company’s common stock, by the participants of the previous financing, led by Rosalind Advisors, in exchange for a reduced, as-converted common stock price of $2.52 and the purchase of new warrants. The exercised Tranche B warrants and newly purchased warrants will generate gross proceeds of approximately $19.4 million. The new warrants purchased by investors have the potential to generate up to an additional $73.3 million in gross proceeds, if exercised.

The new warrants purchased by investors include Tranche A, B and C. The Tranche A warrants provide gross proceeds up to approximately $17.0 million based on the exercise price of $2.52, which was the closing market price of the Company’s common stock on July 19, 2024, and include a 10-trading-day trigger for exercise following Cellectar’s public announcement of the Food and Drug Administration (FDA) having assigned a Prescription Drug User Fee Act goal date for review of iopofosine I 131. The Tranche B Warrants provide gross proceeds up to approximately $32.9 million based on an exercise price of $4.00 per share, with a 10-trading-day trigger for investors to exercise upon FDA approval of iopofosine I 131. The Tranche C warrants provide gross proceeds up to approximately $23.5 million based on an exercise price of $5.50 per share, with a 10-trading-day trigger for investors to exercise following Cellectar reporting domestic quarterly revenue from iopofosine I 131 exceeding $10.0 million.

The new warrants have not been registered under the Securities Act of 1933, as amended, or applicable under state securities laws. Accordingly, the securities 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. As part of the transaction, the Company has agreed to file a resale registration statement on Form S-3 with the Securities and Exchange Commission within 30 days of the exercise date of the Tranche B warrants to register the resale of the shares of common stock underlying the new warrants.

The company expects to file an NDA for iopofosine I 131 for the treatment of Waldenstrom’s macroglobulinemia in the fourth quarter of 2024 and will be seeking a priority review. Funds generated from the execution of these warrants are expected to advance the company to commercialization.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor shall there be any sale of these securities in any state or 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 jurisdiction.

About Cellectar Biosciences, Inc.

Cellectar Biosciences is a late-stage clinical biopharmaceutical company focused on the discovery and development of proprietary drugs for the treatment of cancer, independently and through research and development collaborations. The company’s core objective is to leverage its proprietary Phospholipid Drug Conjugate™ (PDC) delivery platform to develop the next-generation of cancer cell-targeting treatments, delivering improved efficacy and better safety as a result of fewer off-target effects.

The company’s product pipeline includes lead asset iopofosine I 131, a small-molecule PDC designed to provide targeted delivery of iodine-131 (radioisotope), proprietary preclinical PDC chemotherapeutic programs and multiple partnered PDC assets.

For more information, please visit www.cellectar.com or join the conversation by liking and following us on the company’s social media channels: Twitter, LinkedIn, and Facebook.

Forward-Looking Statement Disclaimer

This news release contains forward-looking statements. You can identify these statements by our use of words such as "may," "expect," "believe," "anticipate," "intend," "could," "estimate," "continue," "plans," or their negatives or cognates. These statements are only estimates and predictions and are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes including our expectations regarding the CLOVER WaM pivotal trial. Drug discovery and development involve a high degree of risk. Factors that might cause such a material difference include, among others, uncertainties related to the ability to raise additional capital, uncertainties related to the disruptions at our sole source supplier of iopofosine, the ability to attract and retain partners for our technologies, the identification of lead compounds, the successful preclinical development thereof, patient enrollment and the completion of clinical studies, the FDA review process and FDA’s view of our data and other government regulation, our ability to maintain orphan drug designation in the United States for iopofosine, the volatile market for priority review vouchers, our pharmaceutical collaborators' ability to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, product pricing and third-party reimbursement. A complete description of risks and uncertainties related to our business is contained in our periodic reports filed with the Securities and Exchange Commission including our Form 10-K for the year ended December 31, 2023, and our Form 10-Q for the quarter ended March 31, 2024. These forward-looking statements are made only as of the date hereof, and we disclaim any obligation to update any such forward-looking statements.

Contacts

MEDIA:
Christy Maginn
Bliss Bio Health
703-297-7194
cmaginn@blissbiohealth.com

INVESTORS:
Chad Kolean
Chief Financial Officer
investors@cellectar.com

FAQ

How much did Cellectar Biosciences (CLRB) raise from the exercise of Tranche B warrants?

Cellectar Biosciences raised approximately $19.4 million in gross proceeds from the exercise of Tranche B warrants and purchase of new warrants.

What is the potential additional amount Cellectar Biosciences (CLRB) could raise from the new warrants?

The new warrants purchased by investors have the potential to generate up to an additional $73.3 million in gross proceeds if exercised.

When does Cellectar Biosciences (CLRB) plan to file an NDA for iopofosine I 131?

Cellectar Biosciences expects to file an NDA for iopofosine I 131 for the treatment of Waldenstrom's macroglobulinemia in the fourth quarter of 2024.

What are the exercise prices for the new warrants issued by Cellectar Biosciences (CLRB)?

The new warrants have three tranches with exercise prices of $2.52 (Tranche A), $4.00 (Tranche B), and $5.50 (Tranche C) per share.

What is the purpose of the funds raised by Cellectar Biosciences (CLRB) through these warrant exercises?

The funds generated from the execution of these warrants are expected to advance the company to commercialization of its drug candidate, iopofosine I 131.