KALA BIO Announces $12,500,000 Private Placement
KALA BIO, a clinical-stage biopharmaceutical company, announced a private placement agreement with institutional investors to sell 1,197,314 shares of common stock at $5.85 per share and 9,393 shares of Series H Preferred Stock at $585.00 per share, raising approximately $12.5 million before expenses.
The placement, led by SR One with participation from ADAR1 Capital Management and another life sciences-focused investor, is set to close around June 28, 2024, pending customary conditions. Net proceeds will fund the clinical development of KPI-012 for persistent corneal epithelial defects and general corporate purposes.
The securities are unregistered under the Securities Act of 1933 and will only be offered via a prospectus. KALA will file a registration statement with the SEC within 30 days post-closing for resale purposes.
- KALA BIO secures $12.5 million in gross proceeds through a private placement.
- The funding will advance the clinical development of KPI-012 for treating persistent corneal epithelial defects.
- The securities sold in the private placement are unregistered under the Securities Act of 1933.
- Shareholders may face dilution due to the issuance of new common and preferred shares.
Insights
The announcement of a $12.5 million private placement by KALA BIO is significant for investors. Private placements are often used by companies to raise capital more quickly than public offerings. This type of funding can dilute existing shareholders' equity, but it can also provide necessary funds for development projects.
The involvement of institutional investors like SR One and ADAR1 Capital Management adds credibility, suggesting confidence in the company's prospects. The price per share for common stock and preferred stock implies an assessed value that investors can use as a reference point.
From a financial perspective, this funding will likely help KALA BIO advance its clinical project, KPI-012, without the immediate pressures of revenue generation. However, this could also mean reliance on future successes, which is inherently risky in biotech due to regulatory and trial uncertainties.
Investors should note that the securities are not yet registered, which adds a layer of risk until the registration statement is filed. The issuance of preferred stock also suggests a structured approach to attract investment without immediately affecting common stockholders' voting power, but it could lead to future share dilution.
The move to raise $12.5 million through private placement is a strategic choice by KALA BIO. It reflects the company's need for substantial capital to push forward its clinical trials. This indicates that KALA is at a important phase in its development pipeline, particularly for KPI-012. The placement suggests that current cash reserves may not suffice for the planned undertakings.
The backing from renowned life sciences-focused investors emphasizes the market's optimism towards KALA's research direction. Such investors typically conduct thorough due diligence before committing funds, reinforcing the potential of KPI-012 to address a significant medical need — persistent corneal epithelial defect.
For retail investors, the endorsement by major institutions could be a positive signal, although it's important to consider the implications of dilution and the future performance metrics tied to the success of clinical trials and eventual regulatory approval.
ARLINGTON, Mass., June 27, 2024 (GLOBE NEWSWIRE) -- KALA BIO, Inc. (NASDAQ:KALA), a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the eye, today announced that it has entered into a securities purchase agreement with a select group of institutional accredited investors for the sale, in a private placement, of shares of its common stock and shares of its Series H Convertible Non-Redeemable Preferred Stock (the “Series H Preferred Stock”), for aggregate gross proceeds of approximately
The private placement was led by SR One with participation from ADAR1 Capital Management and another life sciences-focused investor.
In the private placement, KALA has agreed to sell 1,197,314 shares of its common stock at a price of
KALA intends to use the net proceeds from the private placement to advance the clinical development of KPI-012 for the treatment of persistent corneal epithelial defect, as well as for general corporate purposes.
The securities to be sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. KALA has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) registering the resale of the shares of common stock issued in the private placement and the shares of common stock issuable upon conversion of the Series H Preferred Stock issued in the private placement no later than the 30th day after the closing of the private placement.
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 securities of KALA 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 jurisdiction. Any offering of the securities under the resale registration statement will only be made by means of a prospectus.
About KALA BIO, Inc.
KALA is a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the eye. KALA’s biologics-based investigational therapies utilize KALA’s proprietary mesenchymal stem cell secretome (MSC-S) platform. KALA’s lead product candidate, KPI-012, is a human MSC-S, which contains numerous human-derived biofactors, such as growth factors, protease inhibitors, matrix proteins and neurotrophic factors that can potentially correct the impaired corneal healing that is an underlying etiology of multiple severe ocular diseases. KPI-012 is currently in clinical development for the treatment of persistent corneal epithelial defect (PCED), a rare disease of impaired corneal healing, for which it has received Orphan Drug and Fast Track designations from the U.S. Food and Drug Administration. KALA is also targeting the potential development of KPI-012 for the treatment of Limbal Stem Cell Deficiency and other rare corneal diseases that threaten vision and has initiated preclinical studies to evaluate the potential utility of its MSC-S platform for retinal degenerative diseases, such as Retinitis Pigmentosa and Stargardt Disease.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. Any statements in this press release about KALA’s future expectations, plans and prospects, including but not limited to statements about KALA’s expectations with respect to the expected closing of the private placement, the anticipated use of net proceeds from the private placement and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “likely,” “will,” “would,” “could,” “should,” “continue,” and similar expressions constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether the conditions for the closing of the private placement will be satisfied; market conditions and other factors discussed in the “Risk Factors” section of KALA’s Annual Report on Form 10-K, most recently filed Quarterly Report on Form 10-Q and other filings KALA makes with the SEC. These forward-looking statements represent KALA’s views as of the date of this press release and should not be relied upon as representing KALA’s views as of any date subsequent to the date hereof. KALA does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Investor Contact:
Taylor Steiner
taylor.steiner@precisionaq.com
212-362-1200
FAQ
What is the amount raised by KALA BIO in the private placement announced on June 27, 2024?
When is the expected closing date for KALA BIO's private placement?
How many shares of common stock did KALA BIO agree to sell in the private placement?
What is the price per share for KALA BIO's Series H Preferred Stock in the private placement?
Who led the private placement for KALA BIO?
What will KALA BIO use the net proceeds from the private placement for?
Will KALA BIO register the shares sold in the private placement?
