Foghorn Announces Pricing of Registered Direct Offering of Common Stock and Pre-Funded Warrants
Foghorn Therapeutics (FHTX) has announced a registered direct offering of 12,743,039 shares of its common stock at $5.51 per share and pre-funded warrants for 7,220,794 shares at $5.5099 per warrant. This offering aims to raise approximately $110 million in gross proceeds. The closing is expected around May 22, 2024, pending customary conditions. Proceeds will be used for advancing preclinical and clinical programs and general corporate purposes. Jefferies, TD Cowen, and Evercore ISI are managing the offering. The securities are offered pursuant to an effective shelf registration statement filed with the SEC.
- Foghorn Therapeutics expects to raise approximately $110 million from the offering.
- Proceeds will be used to advance preclinical and clinical programs, potentially accelerating drug development.
- The involvement of reputable managers like Jefferies, TD Cowen, and Evercore ISI adds credibility to the offering.
- The issuance of new shares could lead to shareholder dilution.
- The stock offering price of $5.51 is relatively low, potentially indicating undervaluation.
- Offering expenses and underwriting discounts will reduce the net proceeds received by Foghorn.
Insights
Foghorn Therapeutics Inc. (FHTX) is executing a significant financial maneuver by offering
For investors, it's important to note that this direct offering increases the total shares outstanding, which may lead to stock dilution. While the immediate effect might be a decrease in the stock price, the raised capital is earmarked for advancing preclinical and clinical programs and covering general corporate expenses. This could benefit the company in the long run, assuming successful development and commercialization of its pipeline products.
From a valuation perspective, the offering price of
It's also worth considering the involvement of well-known book-running managers like Jefferies, TD Cowen and Evercore ISI, which can instill confidence in institutional investors about the offering's credibility and execution.
The use of proceeds from this offering is particularly noteworthy. The capital will support both preclinical and clinical programs, which suggests Foghorn is in a critical phase of development. For a biotech company, securing funding for these stages is often essential for eventual FDA approvals and market entry.
Investors should monitor how these funds are allocated across various development programs. The success of clinical trials and subsequent stages can significantly enhance the company's valuation and market position. However, biotech investments are inherently risky; the outcomes of these trials can be unpredictable and negative results could adversely affect stock performance.
Moreover, the focus on 'general corporate purposes' is a broad area that might cover everything from operational expenses to strategic investments. This flexibility can be positive, but it also requires trust in the management's decision-making capabilities to utilize the funds effectively.
Understanding the biotech landscape, where timelines for drug development are long and capital-intensive, is essential for investors. These funds could bridge the gap between discovery and commercialization, assuming the clinical programs progress as anticipated.
CAMBRIDGE, Mass., May 20, 2024 (GLOBE NEWSWIRE) -- Foghorn Therapeutics Inc. (“Foghorn”) (Nasdaq: FHTX) today announced the pricing of a registered direct offering of 12,743,039 shares of its common stock at a price of
Foghorn anticipates the total gross proceeds from the offering (before deducting the underwriting discounts and commissions and estimated offering expenses) will be approximately
Foghorn intends to use the net proceeds from this offering to advance its preclinical and clinical programs and for general corporate purposes.
Jefferies, TD Cowen and Evercore ISI are acting as joint book-running managers for the proposed offering.
The securities described above are being offered by Foghorn pursuant to a shelf registration statement on Form S-3 declared effective by the Securities and Exchange Commission (SEC) on March 14, 2022. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, 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. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC's website at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering, when available, may also be obtained by contacting: Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by e-mail at prospectus_department@jefferies.com or by telephone at (877) 821-7388; TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, NY 10017, by telephone at (855) 495-9846 or by email at TD.ECM_Prospectus@tdsecurities.com; or Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, by telephone at (888) 474-0200, or by email at ecm.prospectus@evercore.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, 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 of these securities under the securities laws of any such state or jurisdiction.
ABOUT FOGHORN
Foghorn® Therapeutics is discovering and developing a novel class of medicines targeting genetically determined dependencies within the chromatin regulatory system. Through its proprietary scalable Gene Traffic Control® platform, Foghorn is systematically studying, identifying and validating potential drug targets within the chromatin regulatory system. The Company is developing multiple product candidates in oncology.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements.” Forward-looking statements include statements related to the proposed offering, including the timing and size of the offering and the anticipated use of proceeds therefrom and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the uncertainties related to market conditions, the satisfaction of customary closing conditions related to the proposed public offering, and the completion of the public offering on the anticipated terms or at all, regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks relating to our clinical trials and other factors set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”), and the Company’s other filings with the SEC. Any forward-looking statement made in this press release speaks only as of the date on which it is made.
INVESTOR RELATIONS CONTACT
Greg Dearborn, Foghorn Therapeutics Inc. (Investors)
gdearborn@foghorntx.com
Peter Kelleher, LifeSci Advisors (Investors)
pkelleher@lifesciadvisors.com
Karin Hellsvik, Foghorn Therapeutics Inc. (Investors & Media)
khellsvik@foghorntx.com
MEDIA CONTACTS
Adam Silverstein, ScientPR (Media)
adam@scientpr.com
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