Cue Biopharma Announces Pricing of $12.0 Million Public Offering

Rhea-AI Summary

Cue Biopharma (Nasdaq: CUE) has announced the pricing of a $12.0 million public offering. The offering includes 11,564,401 shares of common stock with warrants to purchase 2,891,100 additional shares, and pre-funded warrants to purchase 12,435,599 shares with warrants for 3,108,900 more shares. Each common stock share and warrant combination is priced at $0.50, while the pre-funded warrant and common stock warrant combination is priced at $0.499.

The offering is expected to close around September 30, 2024. Oppenheimer & Co. Inc. is the sole book-running manager, with Newbridge Securities as co-manager. The securities are being offered under a shelf registration statement filed with the SEC. This announcement does not constitute an offer to sell or a solicitation of an offer to buy these securities.

Positive

• Raised $12.0 million in gross proceeds through public offering
• Offering includes both common stock and pre-funded warrants, providing flexibility for investors
• Common stock warrants have a 5-year expiration, potentially providing long-term value

Negative

• Potential dilution of existing shareholders due to new share issuance
• Low offering price of $0.50 per share may indicate weak market sentiment
• Additional warrants could lead to further dilution if exercised

Insights

Financial Analyst

This $12 million public offering is a significant event for Cue Biopharma, given its current market cap of about $22.7 million. The offering substantially dilutes existing shareholders, with the company issuing 24 million new shares and warrants at a deeply discounted price of $0.50 per share, well below the current market price.

The use of pre-funded warrants alongside common stock suggests the company is trying to maximize capital raised while navigating around Nasdaq's minimum price requirements. This structure allows them to effectively price below $0.50 for some investors.

While the capital injection provides much-needed funds for the clinical-stage biotech, the significant dilution and low pricing point to potential financial distress. Investors should closely monitor the company's cash burn rate and clinical progress to assess its ability to reach value-creating milestones before requiring additional funding.

Biotech Research Analyst

Cue Biopharma's novel approach to selectively engaging disease-specific T cells holds promise in the competitive immunotherapy landscape. However, this financing round at such unfavorable terms raises concerns about the company's progress and investor confidence in its pipeline.

The inclusion of warrants with a five-year exercise period at $0.50 suggests management expects significant value creation in the medium term, possibly tied to clinical milestones. Investors should focus on upcoming data readouts from the company's lead programs, particularly in oncology, to gauge the potential for share price recovery.

This financing provides runway, but also increases pressure on the company to deliver compelling clinical results. The biotech sector's high cash burn rates make it important for Cue Biopharma to demonstrate clear progress in its novel T cell engagement platform to justify further investment and potential partnerships.

BOSTON, Sept. 26, 2024 (GLOBE NEWSWIRE) -- Cue Biopharma, Inc. (Nasdaq: CUE), a clinical-stage biopharmaceutical company developing a novel class of therapeutic biologics to selectively engage and modulate disease-specific T cells, today announced the pricing of an underwritten public offering of (i) 11,564,401 shares of its common stock and accompanying common stock warrants to purchase an aggregate of 2,891,100 shares of common stock and, (ii) to certain investors in lieu of common stock, pre-funded warrants to purchase 12,435,599 shares of common stock and accompanying common stock warrants to purchase an aggregate of 3,108,900 shares of common stock. Each share of common stock and accompanying common stock warrant are being sold together at a combined public offering price of $0.50, and each pre-funded warrant and accompanying common stock warrant are being sold together at a combined public offering price of $0.499. The aggregate gross proceeds of the offering are expected to be approximately $12.0 million, before deducting underwriting discounts and commissions and other offering expenses. Each pre-funded warrant will have an exercise price of $0.001 per share, will be exercisable immediately and will be exercisable until all of the pre-funded warrants are exercised in full. Each common stock warrant will have an exercise price of $0.50 per share, will be exercisable immediately and will expire five years from the date of issuance. The offering is expected to close on or about September 30, 2024, subject to satisfaction of customary closing conditions. All of the securities are being offered by Cue Biopharma.

Oppenheimer & Co. Inc. is acting as sole book-running manager for the offering. Newbridge Securities Corporation is acting as co-manager for the offering.

A shelf registration statement on Form S-3 (File No. 333-271786) relating to the securities to be offered in the public offering was filed with the Securities and Exchange Commission (the “SEC”) on May 9, 2023 and declared effective on May 26, 2023. The offering was made only by means of a prospectus supplement and accompanying prospectus that form a part of the registration statement. A preliminary prospectus supplement relating to and describing the terms of the offering has been filed with the SEC and may be obtained for free by visiting the SEC’s website at www.sec.gov. A final prospectus supplement relating to the offering will be filed with the SEC. When available, copies of the preliminary prospectus supplement and final prospectus supplement relating to the offering may also be obtained by contacting: Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 85 Broad Street, 26th Floor, New York, New York 10004, by telephone at (212) 667-8055, or by email at EquityProspectus@opco.com.

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

About Cue Biopharma
Cue Biopharma, a clinical-stage biopharmaceutical company, is developing a novel class of injectable biologics to selectively engage and modulate disease-specific T cells directly within the patient’s body. The company’s proprietary platform, Immuno-STAT™ (Selective Targeting and Alteration of T cells), and biologics are designed to harness the curative potential of the body’s intrinsic immune system through the selective modulation of disease-specific T cells without the adverse effects of broad systemic immune modulation.

Headquartered in Boston, Massachusetts, we are led by an experienced management team and independent Board of Directors with deep expertise in immunology and immuno-oncology as well as the design and clinical development of protein biologics.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, those regarding: the proposed public offering, including the satisfaction of customary closing conditions relating to the offering and the expected closing of the public offering. Forward-looking statements, which are based on certain assumptions and describe the company’s future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” or other comparable terms, although not all forward-looking statements contain these identifying words.

Cue Biopharma may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements, and you should not place undue reliance on its forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements Cue Biopharma makes as a result of various risks and uncertainties, including but not limited to the satisfaction of customary closing conditions related to the public offering, Cue Biopharma’s limited operating history, limited cash and a history of losses, Cue Biopharma’s ability to achieve profitability, potential setbacks in Cue Biopharma’s research and development efforts including negative or inconclusive results from its preclinical studies or clinical trials or Cue Biopharma’s ability to replicate in later clinical trials positive results found in preclinical studies and early-stage clinical trials of its product candidates and other risks and uncertainties described in the Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections of Cue Biopharma’s most recently filed Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q. Any forward-looking statement made by Cue Biopharma in this press release is based only on information currently available to Cue Biopharma and speaks only as of the date on which it is made. Cue Biopharma undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Investor Contact
Marie Campinell 
Senior Director, Corporate Communications
Cue Biopharma, Inc.
mcampinell@cuebio.com

Media Contact
Jonathan Pappas
LifeSci Communications
jpappas@lifescicomms.com

FAQ

What is the size of Cue Biopharma's (CUE) public offering announced on September 26, 2024?

Cue Biopharma announced a public offering with expected gross proceeds of approximately $12.0 million.

What is the pricing structure for Cue Biopharma's (CUE) public offering?

The offering includes common stock and warrants priced at $0.50 per combination, and pre-funded warrants with common stock warrants priced at $0.499 per combination.

When is Cue Biopharma's (CUE) public offering expected to close?

The public offering is expected to close on or about September 30, 2024, subject to customary closing conditions.

Who are the underwriters for Cue Biopharma's (CUE) public offering?

Oppenheimer & Co. Inc. is acting as the sole book-running manager, and Newbridge Securities is acting as co-manager for the offering.