Erasca Announces Closing of Underwritten Offering of Common Stock and Full Exercise of the Underwriters’ Option to Purchase Additional Shares
Erasca, a clinical-stage oncology firm, announced the successful closing of an oversubscribed underwritten offering of 99,459,458 shares at $1.85 per share, including the full exercise of the underwriters' option for an additional 12,972,972 shares. This generated approximately $184 million in gross proceeds. The funds will be used for research, development of product candidates, and general corporate purposes. J.P. Morgan and BofA Securities managed the offering, which was conducted under a shelf registration statement with the SEC.
- Erasca successfully closed an oversubscribed offering of 99,459,458 shares.
- The offering included the full exercise of the underwriters' option for an additional 12,972,972 shares.
- The offering price was set at $1.85 per share.
- Gross proceeds from the offering were approximately $184 million.
- Funds will be directed towards research and development, product candidates, and general corporate purposes.
- J.P. Morgan and BofA Securities acted as joint book-running managers.
- The offering may lead to shareholder dilution due to the increased number of shares.
- The gross proceeds are subject to underwriting discounts, commissions, and other expenses, reducing the net funds available.
Insights
The completion of Erasca's underwritten offering of 99,459,458 shares at
For retail investors, the immediate influx of funds is a positive indicator of Erasca's financial health and its ability to sustain and potentially accelerate its R&D efforts in the highly competitive oncology market. However, the dilution of existing shares due to the sizable offering could exert downward pressure on the stock price in the short term. Investors should weigh the prospects of long-term gains from successful drug development against the short-term dilution effect.
The participation of prominent financial institutions like J.P. Morgan and BofA Securities as joint book-running managers underscores the credibility of the offering and boosts market confidence. Yet, it remains important for investors to monitor how effectively Erasca utilizes these funds towards achieving significant milestones in its clinical programs, as this will ultimately impact the stock's performance.
Erasca's substantial capital raise through this underwritten offering highlights strong investor interest and confidence in its potential to address RAS/MAPK pathway-driven cancers. This pathway is implicated in a significant percentage of human cancers, making it a critical target for novel therapies. The funds will primarily support ongoing and new R&D initiatives, which is essential for maintaining the momentum in clinical trials and product development.
From a market perspective, the continued investment in R&D signals Erasca's commitment to advancing its pipeline, which can differentiate it in the crowded oncology space. Investors should be aware that the success of these initiatives is contingent on positive clinical trial outcomes and subsequent regulatory approvals, which are inherently uncertain. Successful developments in this area could significantly enhance Erasca's market position and drive long-term value creation.
The decision to undertake a public offering, along with the oversubscription and full exercise of the underwriters' option, suggests robust demand for Erasca's shares. This could be interpreted as a bullish signal for future stock performance, provided the company meets its developmental milestones.
SAN DIEGO, May 21, 2024 (GLOBE NEWSWIRE) -- Erasca, Inc. (Nasdaq: ERAS), a clinical-stage precision oncology company singularly focused on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers, today announced the closing of an oversubscribed underwritten offering of 99,459,458 shares of its common stock, at a price of
Erasca intends to use the net proceeds from this offering, together with its existing cash, cash equivalents and marketable securities, to fund the research and development of its product candidates and other development programs and for working capital and other general corporate purposes.
J.P. Morgan and BofA Securities acted as joint book-running managers for the offering.
The securities described above were offered by Erasca pursuant to a shelf registration statement on Form S-3, including a base prospectus, that was previously filed with the Securities and Exchange Commission (SEC) and was declared effective on August 18, 2022. A prospectus supplement and accompanying prospectus relating to this offering have been filed with the SEC. Copies of the prospectus supplement and the accompanying prospectus relating to this offering may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; or BofA Securities, NC1-022-02-25 Attention: Prospectus Department, 201 North Tryon Street, Charlotte, NC, 28255-0001, or by email at dg.prospectus_requests@bofa.com. Electronic copies of the prospectus supplement and accompanying prospectus are available on the website of the SEC at http://www.sec.gov.
This press release shall not constitute an offer to sell or the 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 the registration or qualification under the securities laws of any such state or jurisdiction.
About Erasca
At Erasca, our name is our mission: To erase cancer. We are a clinical-stage precision oncology company singularly focused on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers. Our company was co-founded by leading pioneers in precision oncology and RAS targeting to create novel therapies and combination regimens designed to comprehensively shut down the RAS/MAPK pathway for the treatment of patients with cancer. We have assembled one of the deepest RAS/MAPK pathway-focused pipeline in the industry. We believe our team’s capabilities and experience, further guided by our scientific advisory board which includes the world’s leading experts in the RAS/MAPK pathway, uniquely position us to achieve our bold mission of erasing cancer.
Forward-Looking Statements
Erasca cautions you that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. The forward-looking statements are based on our current beliefs and expectations and include, but are not limited to: the anticipated use of proceeds from the offering. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in our business described in our prior filings with the SEC, including under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2023, and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Contact:
Joyce Allaire
LifeSci Advisors, LLC
jallaire@lifesciadvisors.com
Source: Erasca, Inc.
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