Hepion Pharmaceuticals Announces $9.0 Million Public Offering

Rhea-AI Summary

Hepion Pharmaceuticals (NASDAQ:HEPA) has announced a $9.0 million public offering of 27,692,310 shares of common stock or pre-funded warrants. Each share or warrant comes with two common warrants: a series A and series B, both with an exercise price of $0.40 per share.

The combined offering price is $0.325 per common stock unit and $0.3249 for pre-funded warrant units. The proceeds will be used to repay certain debt and for general corporate purposes, including working capital, operating expenses, and capital expenditures.

The offering, managed by sole placement agent Laidlaw & Company (UK), is expected to close around January 23, 2025. The offering is made pursuant to an effective registration statement on Form S-1 and a related registration statement filed under Rule 462(b).

Positive

• Raising $9.0 million in gross proceeds
• Proceeds will help repay existing debt

Negative

• Significant dilution for existing shareholders with 27.7M new shares
• Offering price of $0.325 represents a discount to market price
• Additional potential dilution from exercise of series A and B warrants

Insights

Financial Analyst

Hepion Pharmaceuticals' $9.0 million public offering reveals significant financial pressures and carries substantial dilution risks for existing shareholders. The offering's structure is particularly complex, featuring both common stock and pre-funded warrants at $0.325 per share, alongside two series of warrants exercisable at $0.40.

The offering's terms are notably concerning:

• The $0.325 pricing represents a substantial discount to recent trading levels
• The 'best efforts' nature suggests challenges in securing firm commitments from institutional investors
• The dual-warrant structure, potentially allowing for up to 200% additional dilution if fully exercised, indicates aggressive financing terms

The use of proceeds for debt repayment signals immediate financial obligations that need addressing, while the timing and structure suggest financing alternatives were available. For a clinical-stage biotech developing NASH and HCC treatments, this type of financing often reflects capital market challenges and could impact the company's ability to advance its clinical programs without additional fundraising.

The involvement of Laidlaw & Company as the sole placement agent, rather than a larger investment bank and the 'best efforts' basis rather than a firm commitment, suggests institutional interest may be This financing approach typically indicates higher risk and could impact future capital raising capabilities.

EDISON, N.J., Jan. 22, 2025 (GLOBE NEWSWIRE) -- Hepion Pharmaceuticals, Inc. (NASDAQ:HEPA), a clinical stage biopharmaceutical company that has been developing a treatment for non-alcoholic steatohepatitis (“NASH”), hepatocellular carcinoma (“HCC”), and other chronic liver diseases, announced the launch of a “best efforts” public offering of 27,692,310 shares of common stock (or pre-funded warrants in lieu thereof) with each share of common stock (or pre-funded warrant) accompanied by (i) a series A common warrant to purchase one (1) common share at an exercise price of $0.40 per share and (ii) a series B common warrant to purchase one (1) common share at an exercise price of $0.40 per share. The combined offering price of each share of common stock together with the accompanying series A and series B common warrants is $0.325, and the combined offering price of each pre-funded warrant together with the accompanying series A and series B common warrants is $0.3249. The gross proceeds of the public offering are expected to be approximately $9.0 million before deducting placement agent fees and offering expenses and are expected to be used to repay certain indebtedness and for general corporate purposes, including working capital, operating expenses and capital expenditures. The closing of the public offering is expected to occur on or about January 23, 2025, subject to the satisfaction of customary closing conditions.

Laidlaw & Company (UK) Ltd. is acting as the sole placement agent for the offering.

This public offering is being made by the Company pursuant to a registration statement on Form S-1 (File No. 333-284052), which was declared effective by the United States Securities and Exchange Commission (“SEC”) on January 21, 2025, and a related registration statement that was filed with the SEC on January 21, 2025 pursuant to Rule 462(b) under the Securities Act of 1933, as amended (and which became automatically effective upon filing). The securities may only be offered by means of a prospectus. Copies of the prospectus may be obtained, when available, at the SEC’s website at www.sec.gov or from Laidlaw & Company (UK) Ltd., 521 5th Avenue, 12^th Floor, New York, NY 10175, or by telephone at (212) 953-4900, or by email at syndicate@laidlawltd.com.

This press release shall not constitute an offer to sell or a 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 Hepion Pharmaceuticals

Hepion’s primary asset, Rencofilstat, is a potent inhibitor of cyclophilins, which are involved in many disease processes. Rencofilstat has been shown to reduce liver fibrosis and hepatocellular carcinoma tumor burden in experimental disease models. In November 2021, the U.S. Food and Drug Administration (“FDA”) granted Fast Track designation for rencofilstat for the treatment of NASH. That was followed in June 2022 by the FDA’s granting of Orphan Drug designation to rencofilstat for the treatment of HCC.

In April 2024, Hepion announced that it was winding down its ASCEND-NASH clinical trial. This trial was designed as a Phase 2b, randomized, multi-center, double-blinded study with first patient screened in August 2022, to evaluate the safety and efficacy of Rencofilstat dosed for 12 months, with a target enrollment of 336 subjects. Enrollment was paused in April 2023, with 151 subjects randomized. To date, approximately 80 subjects have completed their Day 365 visits and are evaluable for both safety and efficacy. An additional 40 subjects will provide significant safety data for evaluation. These patients will be added to Hepion’s existing safety database.

Forward-Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimated,” and “intend,” among others. These forward-looking statements are based on Hepion Pharmaceuticals’ current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, our ability to complete the public offering, the satisfaction of customary closing conditions related to the offering, the anticipated use of proceeds therefrom, our ability to continue as a going concern; our compliance with Nasdaq listing standards, our need for additional financing; uncertainties of patent protection and litigation; risks associated with delays; uncertainties with respect to lengthy and expensive clinical trials, that results of earlier studies and trials may not be predictive of future trial results; uncertainties of government or third party payer reimbursement; limited sales and marketing efforts and dependence upon third parties; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. Hepion Pharmaceuticals does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in Hepion Pharmaceuticals’ Form 10-K for the year ended December 31, 2023, and other periodic reports filed with the Securities and Exchange Commission.

For further information, please contact:

Hepion Pharmaceuticals

info@hepionpharma.com

FAQ

What is the size and structure of Hepion Pharmaceuticals' (HEPA) January 2025 public offering?

Hepion's offering consists of 27,692,310 shares at $0.325 per unit, with each unit including one share (or pre-funded warrant) plus two warrants (Series A and B) exercisable at $0.40, targeting approximately $9.0 million in gross proceeds.

When will HEPA's January 2025 public offering close?

The public offering is expected to close on or about January 23, 2025, subject to customary closing conditions.

How will Hepion Pharmaceuticals use the proceeds from its January 2025 offering?

The proceeds will be used to repay certain indebtedness and for general corporate purposes, including working capital, operating expenses, and capital expenditures.

What is the exercise price of HEPA's Series A and B warrants in the January 2025 offering?

Both Series A and Series B common warrants have an exercise price of $0.40 per share.

Who is the placement agent for HEPA's January 2025 public offering?

Laidlaw & Company (UK) is acting as the sole placement agent for the offering.