Evaxion announces pricing of $10.8 million public offering

Rhea-AI Summary

Evaxion Biotech (NASDAQ: EVAX) has announced the pricing of a $10.8 million public offering, consisting of 3,997,361 American Depositary Shares (ADSs) and warrants to purchase up to 50% of the ADSs at $2.71 per ADS. Each ADS represents fifty ordinary shares, and the warrants will be exercisable immediately with a five-year expiration period.

Notable participants include MSD Global Health Innovation Fund, a Merck & Co. venture capital arm, along with healthcare-focused investment funds and participation from Evaxion's Board and Management. The offering is expected to close around January 31, 2025.

Lake Street Capital Markets and Jones are serving as exclusive placement agents. The proceeds will be used to advance the company's preclinical and clinical pipeline, continuing operating expenses, and working capital.

Positive

• Secured $10.8 million in funding through public offering
• Strategic investment from MSD Global Health Innovation Fund (Merck's VC arm)
• Board and Management participation in the offering demonstrates insider confidence
• Five-year warrant term provides potential additional future funding

Negative

• Potential dilution for existing shareholders through new ADS issuance
• Warrants could lead to additional future dilution if exercised

Insights

Financial Analyst

The $10.8M public offering by Evaxion represents a critical financing round with several noteworthy elements. The pricing at $2.71 per ADS (approximately 20% below current market price) reflects current market dynamics for small-cap biotechs, while the warrant coverage at 50% provides additional future funding potential through the 5-year exercise window.

The continued participation of MSD Global Health Innovation Fund (Merck's venture arm) following their December 2023 investment signals strong institutional validation of Evaxion's AI-Immunology platform. This strategic backing, combined with participation from healthcare-focused funds and internal stakeholders, demonstrates confidence in the company's technology and execution capability.

The offering structure, while dilutive, provides several advantages:

• Immediate capital injection for pipeline advancement
• Potential for additional $5.4M through warrant exercises
• Strengthened institutional ownership base
• Validation from strategic investor (Merck)

The insider participation from Board and Management adds another layer of confidence, aligning their interests with new investors. The proceeds allocation towards advancing preclinical and clinical pipeline indicates a focused approach to value creation, though investors should monitor the burn rate given the company's market cap of approximately $5.2M.

COPENHAGEN, Denmark, January 30, 2025 - Evaxion Biotech A/S (NASDAQ: EVAX) (“Evaxion”), a clinical-stage TechBio company specializing in developing AI-Immunology™ powered vaccines, today announced the pricing of a public offering of an aggregate of 3,997,361 of its American Depositary Shares (“ADSs”) and warrants to purchase up to 50% of the ADSs offered at a combined public offering price of $2.71 per ADS with one accompanying warrant for each two ADSs.

MSD Global Health Innovation Fund, a corporate venture capital arm of Merck & Co., Inc., Rahway, NJ, USA, who became an Evaxion shareholder in December 2023, is also participating in this offering along with healthcare-focused investment funds. There is also participation from Evaxion’s Board of Directors and Management.

The warrants will have an exercise price of $2.71 per ADS, will be exercisable immediately upon issuance and will expire five years following the date of issuance. Each ADS represents fifty ordinary shares of the company. The closing of the offering is expected to occur on or about January 31, 2025, subject to the satisfaction of customary closing conditions.

Lake Street Capital Markets, LLC and Jones are acting as the exclusive placement agents for the offering. The gross proceeds to the company from the offering are expected to be $10.8 million, before deducting the placement agent’s fees and other offering expenses payable by the company. The company intends to use the net proceeds of this offering to advance the company’s preclinical and clinical pipeline, and for continuing operating expenses and working capital.

The securities described above are being offered pursuant to a registration statement on Form F-1, as amended (File No. 333-283304), which was declared effective by the Securities and Exchange Commission (“SEC”), on January 29, 2025. The offering is made only by means of a prospectus forming a part of the effective registration statement relating to the offering.

A preliminary prospectus relating to the offering has been filed with the SEC and a final prospectus relating to the offering will be filed with the SEC. Electronic copies of the final prospectus, when available, may be obtained on the SEC’s website located at http://www.sec.gov and may also be obtained by contacting Lake Street Capital Markets, LLC at Attn: Syndicate Department, 920 Second Avenue South, Suite 700, Minneapolis, MN 55402, by calling (612) 326-1305, or by emailing syndicate@lakestreetcm.com or JonesTrading Institutional Services LLC (“Jones”) at Attn: Equity Capital Markets, 325 Hudson Street, 6^th Floor, New York, NY 10013, by emailing ecm@jonestrading.com.

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

Contact information 
Evaxion Biotech A/S
Mads Kronborg
Vice President, Investor Relations & Communication
+45 53 54 82 96
mak@evaxion.ai

About EVAXION
Evaxion Biotech A/S is a pioneering TechBio company based upon its AI platform, AI-Immunology™. Evaxion’s proprietary and scalable AI prediction models harness the power of artificial intelligence to decode the human immune system and develop novel immunotherapies for cancer, bacterial diseases, and viral infections. Based upon AI-Immunology™, Evaxion has developed a clinical-stage oncology pipeline of novel personalized vaccines and a preclinical infectious disease pipeline in bacterial and viral diseases with high unmet medical needs. Evaxion is committed to transforming patients’ lives by providing innovative and targeted treatment options.

Forward-looking statement 
This announcement contains forward-looking statements 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. The words “target,” “believe,” “expect,” “hope,” “aim,” “intend,” “may,” “might,” “anticipate,” “contemplate,” “continue,” “estimate,” “plan,” “potential,” “predict,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could,” and other words and terms of similar meaning identify forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including, but not limited to, risks related to: our ability the consummate the offering and satisfy the closing conditions of the offering; our financial condition and need for additional capital; our development work; cost and success of our product development activities and preclinical and clinical trials; commercializing any approved pharmaceutical product developed using our AI platform technology, including the rate and degree of market acceptance of our product candidates; our dependence on third parties including for conduct of clinical testing and product manufacture; our inability to enter into partnerships; government regulation; protection of our intellectual property rights; employee matters and managing growth; our ADSs and ordinary shares, the impact of international economic, political, legal, compliance, social and business factors, including inflation, and the effects on our business from other significant geopolitical and macro-economic events; and other uncertainties affecting our business operations and financial condition. For a further discussion of these risks, please refer to the risk factors included in our most recent Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission (SEC), which are available at www.sec.gov. We do not assume any obligation to update any forward-looking statements except as required by law. 

FAQ

What is the size and price of Evaxion's (EVAX) January 2025 public offering?

Evaxion's public offering consists of 3,997,361 ADSs priced at $2.71 per ADS, with warrants to purchase up to 50% of the ADSs, totaling $10.8 million in gross proceeds.

How will Evaxion (EVAX) use the proceeds from its $10.8M offering?

Evaxion plans to use the net proceeds to advance its preclinical and clinical pipeline, and for continuing operating expenses and working capital.

What are the terms of the warrants in EVAX's January 2025 offering?

The warrants have an exercise price of $2.71 per ADS, are immediately exercisable upon issuance, and will expire five years after issuance.

Who are the major investors in Evaxion's (EVAX) January 2025 public offering?

Major investors include MSD Global Health Innovation Fund (Merck's venture capital arm), healthcare-focused investment funds, and participation from Evaxion's Board of Directors and Management.

When is the expected closing date for EVAX's January 2025 public offering?

The offering is expected to close on or about January 31, 2025, subject to customary closing conditions.