Genelux Corporation Announces Pricing of Approximately $27.5 Million Underwritten Offering of Common Stock and Accompanying Warrants

Rhea-AI Summary

Genelux (Nasdaq: GNLX), an immuno-oncology company, has announced the pricing of an underwritten offering of 6,875,000 shares of common stock and accompanying warrants at $4.00 per share and warrant. Each warrant will have an exercise price of $5.25. The gross proceeds are expected to be approximately $27.5 million, with net proceeds providing working capital into Q1 2026. The funds will support the clinical development of Olvi-Vec, with Phase 3 trial results anticipated in H2 2025. The offering is expected to close around May 29, 2024. Guggenheim Securities and Newbridge Securities are managing the offering. A 30-day option for an additional 1,031,250 shares and warrants is also included.

Positive

• Gross proceeds from the offering expected to be $27.5 million.
• Net proceeds will provide working capital until Q1 2026.
• Funds to support continued clinical development of Olvi-Vec.
• Topline results of Phase 3 trial for Olvi-Vec expected in H2 2025.
• Securities offered under an effective shelf registration statement.

Negative

• Dilution risk with issuance of 6,875,000 shares and accompanying warrants.
• Underwriting discounts and commissions will reduce net proceeds.
• Warrants have a five-year expiration period, potentially affecting stock price.
• The offering is subject to customary closing conditions, adding uncertainty.

Financial Analyst

Genelux Corporation's recent announcement of a $27.5 million underwritten offering is a significant financial maneuver. The offering price set at 4.00 per share with accompanying warrants positions the company to raise substantial capital. This capital infusion is timely and critical, given that it aims to sustain operations into early 2026 and fund the ongoing clinical trials for Olvi-Vec, an investigational drug in late-stage development. The pricing strategy indicates management's confidence in the stock's valuation and the future upside potential reflected in the warrant exercise price of 5.25.

The timing of this offering is also strategic, aligning with the anticipated topline results from their OnPrime Phase 3 trial in the second half of 2025. This could potentially provide a positive momentum for the stock if the trial results are favorable, leading to increased investor interest and possibly higher stock prices.

However, it's important to note the dilutive effect on existing shareholders. Issuing new shares increases the total share count, potentially reducing the earnings per share (EPS) unless the capital raised leads to substantial growth in the company's profitability. Additionally, the risk of the ongoing clinical trials not meeting their endpoints could impact future valuation, making this a high-stakes situation for the company and its investors.

For retail investors, understanding the implications of share dilution and the potential upside from successful clinical trials is crucial. The outcome of the OnPrime Phase 3 trial will be a major catalyst for the stock.

Market Research Analyst

The structure of this underwritten offering, involving common stock and accompanying warrants, provides a compelling case for both immediate and long-term investment attractiveness. Warrants give investors a future opportunity to buy stock at a predefined price, which, in this case, is 5.25 per share. This mechanism is particularly attractive in high-growth sectors like biotech, where positive clinical results can significantly elevate stock prices.

The biotech sector is known for its volatility, primarily driven by clinical trial results and regulatory decisions. The fact that Genelux is in a late clinical stage with Olvi-Vec increases the risk-reward ratio for this offering. If the OnPrime Phase 3 trial yields positive results, the warrants offered now could provide substantial returns to investors who participate in this round.

It is also worth noting the role of underwriters like Guggenheim Securities and Newbridge Securities Corporation. Their involvement often signals credibility and a thorough vetting process, adding a layer of assurance for investors.

Retail investors should consider the potential for high returns balanced against the inherent risks of clinical trial outcomes and market reactions. Investing in biotech requires a tolerance for volatility but can pay off significantly if the company’s drugs receive positive trial results and subsequent market approval.

WESTLAKE VILLAGE, Calif., May 24, 2024 (GLOBE NEWSWIRE) -- Genelux Corporation (Genelux) (Nasdaq: GNLX), a late clinical-stage immuno-oncology company, today announced the pricing of an underwritten offering of 6,875,000 shares of its common stock and accompanying warrants to purchase 6,875,000 shares of its common stock at a combined offering price of $4.00 per share and accompanying warrant, in each case before underwriting discounts and commissions. Each warrant will have an exercise price of $5.25 per share, will be immediately exercisable following the closing of the offering and will expire five years from the date of issuance. Gross proceeds to Genelux from the offering are expected to be approximately $27.5 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by Genelux. The net proceeds from the offering are expected to provide working capital into the first quarter of 2026 for general corporate purposes, including the continued clinical development of Olvi-Vec, with topline results of the OnPrime Phase 3 registrational trial anticipated in the second half of 2025. The offering is expected to close on or about May 29, 2024, subject to customary closing conditions. All of the securities are being sold by Genelux. In addition, Genelux has granted the underwriters a 30-day option to purchase up to an additional 1,031,250 shares of its common stock and accompanying warrants to purchase 1,031,250 shares of its common stock to cover over-allotments, if any.

Guggenheim Securities is acting as sole book-running manager for the offering. Newbridge Securities Corporation is acting as co-manager for the offering.

The securities were offered by Genelux pursuant to an effective shelf registration statement previously filed by Genelux with the U.S. Securities and Exchange Commission (SEC). A final prospectus supplement and accompanying prospectus related to the offering will be filed with the SEC, and will be available on the SEC's website located at www.sec.gov. When available, copies of the final prospectus supplement and the accompanying prospectus relating to the offering may also be obtained by contacting: Guggenheim Securities, LLC, Attention: Equity Syndicate Department, 330 Madison Avenue, 8^th Floor, New York, New York 10017, by telephone at (212) 518-9544, or by email at GSEquityProspectusDelivery@guggenheimpartners.com.

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 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.

About Genelux

Genelux is a late clinical-stage biopharmaceutical company focused on developing a pipeline of next-generation oncolytic immunotherapies for patients suffering from aggressive and/or difficult-to-treat solid tumor types. Genelux’s most advanced product candidate, Olvi-Vec (olvimulogene nanivacirepvec), is a proprietary, modified strain of the vaccinia virus. Olvi-Vec currently is being evaluated in OnPrime/GOG-3076, a multi-center, randomized, open-label Phase 3 registrational trial evaluating the efficacy and safety of Olvi-Vec in combination with platinum-doublet + bevacizumab compared with physician's choice of chemotherapy and bevacizumab in patients with platinum-resistant/refractory ovarian cancer. The core of Genelux's discovery and development efforts revolves around its proprietary CHOICE™ platform from which Genelux has developed an extensive library of isolated and engineered oncolytic vaccinia virus immunotherapeutic product candidates, including Olvi-Vec.

Forward-Looking Statements

This release contains or may imply "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not based on historical fact and include, but are not limited to, statements regarding anticipated gross proceeds, its ability to fund for general corporate purposes through the first quarter of 2026, the expected use of proceeds, timing related to topline results of the OnPrime Phase 3 registrational trial and anticipated closing date. Any forward-looking statements are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties related to completion of the public offering on the anticipated terms or at all, market conditions and satisfaction of customary closing conditions related to the proposed public offering. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in Genelux’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, and in other filings that Genelux makes with the SEC from time to time. There can be no assurance that any of the forward-looking information provided herein will be proven accurate. These forward-looking statements speak only as of the date hereof and Genelux undertakes no obligation to update forward-looking statements, and readers are cautioned not to place undue reliance on such forward-looking statements.

Contacts

Ankit Bhargava, MD
Allele Communications, LLC
genelux@allelecomms.com

Source: Genelux Corporation

FAQ

What is the combined offering price for Genelux 's common stock and warrants?

The combined offering price is $4.00 per share and accompanying warrant.

When will the offering of Genelux 's common stock and warrants close?

The offering is expected to close on or about May 29, 2024.

What are the gross proceeds expected from Genelux 's offering?

The gross proceeds are expected to be approximately $27.5 million.

What will the net proceeds from Genelux 's offering be used for?

The net proceeds will provide working capital into Q1 2026 and support the clinical development of Olvi-Vec.

When are the topline results of the Phase 3 trial for Olvi-Vec expected?

The topline results are anticipated in the second half of 2025.

What is the exercise price of the warrants issued by Genelux ?

Each warrant has an exercise price of $5.25 per share.

Who is managing Genelux 's underwritten offering?

Guggenheim Securities is acting as the sole book-running manager, with Newbridge Securities as the co-manager.

Is there an option to purchase additional shares and warrants in Genelux 's offering?

Yes, there is a 30-day option to purchase up to an additional 1,031,250 shares and warrants to cover over-allotments.