FibroBiologics Announces $25 Million Financing

Rhea-AI Summary

FibroBiologics (NASDAQ: FBLG) has secured a $25 million financing through a Standby Equity Purchase Agreement (SEPA) with Yorkville Advisors Global's investment fund. The two-year agreement includes an initial $15 million advance in three $5 million tranches via convertible promissory notes, with the first tranche already funded. An additional $10 million in common stock sales is available subject to conditions.

The company plans to use the funds to complete its first-in-human trial for diabetic foot ulcers and IND-enabling studies for its psoriasis program. The remaining capital will support development of human longevity, multiple sclerosis, and cancer indications. FibroBiologics, a clinical-stage biotech company, holds 160+ patents focusing on therapeutics using fibroblasts and fibroblast-derived materials.

Positive

• Secured $25 million in financing through SEPA
• First $5 million tranche already received
• Funding supports multiple clinical programs including diabetic foot ulcers and psoriasis trials

Negative

• Dilutive financing through convertible notes and equity sales
• Additional $10 million subject to Yorkville's consent and conditions
• Requires shareholder approval for third tranche funding

Insights

Financial Analyst

This $25 million financing deal through a Standby Equity Purchase Agreement (SEPA) with Yorkville represents a significant capital injection for FibroBiologics, structured in a way that provides immediate liquidity while maintaining flexibility. The immediate $5 million tranche, followed by two additional $5 million tranches, creates a staged funding approach that aligns capital deployment with specific operational milestones.

Breaking down the structure: The initial $15 million through convertible promissory notes provides more favorable terms compared to traditional equity financing, while the remaining $10 million equity component offers future funding flexibility. For a company with a market cap of approximately $70 million, this financing represents about 35.7% of its current market value, indicating a substantial capital raise relative to its size.

The funding allocation towards completing first-in-human trials for diabetic foot ulcers and IND-enabling studies for psoriasis demonstrates a clear pathway to value creation milestones. This strategic deployment of capital across multiple programs (including human longevity, multiple sclerosis and cancer) helps diversify development risk while maintaining momentum across the pipeline.

Biotech Research Analyst

The financing structure strategically supports FibroBiologics' diverse therapeutic pipeline development. Their focus on fibroblast-based therapeutics, backed by 160+ patents, positions them uniquely in the regenerative medicine space. The prioritization of diabetic foot ulcers represents a smart market entry point - it's a significant unmet medical need with a clear regulatory pathway and commercial potential.

The staged funding approach aligns well with clinical development timelines:

• First-in-human trial for diabetic foot ulcers
• IND-enabling studies for psoriasis
• Advanced development in multiple sclerosis and cancer programs

This multi-indication strategy leverages their core fibroblast technology platform across various high-value therapeutic areas, potentially creating multiple value-generating opportunities from a single technology base.

HOUSTON, Dec. 23, 2024 (GLOBE NEWSWIRE) -- FibroBiologics, Inc. (Nasdaq: FBLG) ("FibroBiologics”), a clinical-stage biotechnology company with 160+ patents issued and pending with a focus on the development of therapeutics and potential cures for chronic diseases using fibroblasts and fibroblast-derived materials, announced that it has entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN LTD. (“Yorkville”), an investment fund managed by Yorkville Advisors Global, LP. The agreement allows FibroBiologics, subject to customary conditions, to sell up to $25 million in the aggregate of its common stock to Yorkville over the course of two years.

Yorkville agreed to advance to FibroBiologics the first $15 million available under the SEPA in three equal tranches to be evidenced by convertible promissory notes. The first tranche in the amount of $5 million was funded upon entry into the SEPA. Subject to the satisfaction of certain conditions, the second tranche of $5 million will fund after the filing of a registration statement covering the resale of the shares issuable to Yorkville under the promissory notes, and the third tranche of $5 million will fund following the effectiveness of the registration statement and receipt of shareholder approval in satisfaction of Nasdaq rules. FibroBiologics can sell an additional $10 million of its common stock to Yorkville, subject to Yorkville’s consent and other conditions, while the convertible promissory notes remain outstanding.

"The initial advances from this financing will allow us to complete our first-in-human trial for diabetic foot ulcers as well as IND-enabling studies for our psoriasis program," said Pete O'Heeron, Founder & Chief Executive Officer of FibroBiologics. “We expect to further develop our human longevity, multiple sclerosis, and cancer indications by utilizing the remaining capital available under the SEPA.”

For more information, please visit FibroBiologics' website or email FibroBiologics at: info@fibrobiologics.com. For more information on the SEPA, including important terms and conditions, please see FibroBiologics' filings with the Securities and Exchange Commission, including its Current Reports on Form 8-K filed with the Securities and Exchange Commission from time to time.

This communication shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities discussed herein, in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Cautionary Statement Regarding Forward-Looking Statements

This communication contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning the funding of the advances under the SEPA, FibroBiologics’ ability to sell additional shares under the SEPA, and FibroBiologics’ ability to complete clinical trials and IND-enabling studies and to develop its other programs and indications. These forward-looking statements are based on FibroBiologics' management's current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside FibroBiologics' management's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those set forth under the caption "Risk Factors" and elsewhere in FibroBiologics' annual, quarterly and current reports (i.e., Form 10-K, Form 10-Q and Form 8-K) as filed or furnished with the SEC and any subsequent public filings. Copies are available on the SEC's website, www.sec.gov. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (a) risks related to FibroBiologics' liquidity and its ability to maintain capital resources sufficient to conduct its business; (b) expectations regarding the initiation, progress and expected results of our R&D efforts and preclinical studies; (c) the unpredictable relationship between R&D and preclinical results and clinical study results; and (d) the ability of FibroBiologics to satisfy the conditions under the SEPA and related agreements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and FibroBiologics assumes no obligation and, except as required by law, does not intend to update, or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. FibroBiologics gives no assurance that it will achieve its expectations.

About FibroBiologics

Based in Houston, FibroBiologics is a clinical-stage biotechnology company developing a pipeline of treatments and potential cures for chronic diseases using fibroblast cells and fibroblast-derived materials. FibroBiologics holds 160+ US and internationally issued patents/patents pending across various clinical pathways, including disc degeneration, orthopedics, multiple sclerosis, psoriasis, wound healing, reversing organ involution, and cancer. FibroBiologics represents the next generation of medical advancement in cell therapy. For more information, visit www.FibroBiologics.com.

General Inquiries:
info@fibrobiologics.com

Investor Relations:
Nic Johnson
Russo Partners
(212) 845-4242
fibrobiologicsIR@russopr.com

Media Contact:
Liz Phillips
Russo Partners
(347) 956-7697
Elizabeth.phillips@russopartnersllc.com

FAQ

How much funding did FibroBiologics (FBLG) secure in December 2024?

FibroBiologics secured a $25 million financing agreement through a Standby Equity Purchase Agreement with Yorkville Advisors Global.

What are the main terms of FBLG's $25 million SEPA agreement?

The agreement includes $15 million in three equal $5 million tranches via convertible notes, plus potential for additional $10 million in common stock sales over two years, subject to conditions.

How will FibroBiologics use the SEPA funding?

The funding will be used to complete first-in-human trials for diabetic foot ulcers, IND-enabling studies for psoriasis, and development of human longevity, multiple sclerosis, and cancer programs.

What conditions must FBLG meet for the remaining SEPA tranches?

The second tranche requires filing a registration statement for share resale, while the third tranche needs registration statement effectiveness and shareholder approval per Nasdaq rules.