Leap Therapeutics Announces $40 Million Private Placement
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Insights
Leap Therapeutics' recent private placement, which involves the sale of common stock and pre-funded warrants, represents a strategic financial move by the company to secure funding for its clinical programs. The transaction's pricing at $2.82 per share indicates a calculated approach to attract institutional investors without significantly diluting existing shareholders. The inclusion of reputable investors like Gilead Sciences suggests market confidence in Leap's pipeline, particularly its lead monoclonal antibody program, DKN-01.
The expected extension of the cash runway into Q2 2026 provides the company with a more stable financial platform to pursue its clinical trials. This is a positive signal to investors, as it reduces the immediate risk of cash shortfall and potential need for further dilutive fundraising in the near term. However, investors should consider the potential risks associated with the pre-funded warrants, which could lead to future dilution when exercised.
Leap Therapeutics' focus on expanding the DeFianCe clinical trial for DKN-01 in colorectal cancer and preparing for a Phase 3 trial in gastric cancer is a significant development in the immuno-oncology field. The decision to expand patient enrollment from 130 to 180 participants enhances the statistical power of the study, potentially leading to more robust data. Such data could be pivotal in determining the drug's efficacy and safety profile, which are critical factors for FDA approval and market adoption.
Investors should note the competitive landscape in immuno-oncology is fierce, with numerous players seeking to innovate in this space. Leap's success in clinical trials could position it well within this market, but any setbacks could adversely affect investor sentiment and the stock's performance. Long-term, the company's prospects hinge on the successful development and potential commercialization of its lead monoclonal antibody program.
The stipulation that the shares and warrants issued in this private placement are not registered under the Securities Act of 1933 and are subject to a subsequent registration for resale is a common legal framework for such transactions. This mechanism allows Leap to secure immediate funding while obligating them to facilitate future liquidity for the investors. It's important for stakeholders to understand that until the registration is complete, there are restrictions on the sale of these securities, which could impact their liquidity and market value.
Furthermore, the compliance with Nasdaq's 'Minimum Price' requirement ensures that the transaction adheres to marketplace rules, potentially mitigating legal risks associated with the offering. This compliance is a safeguard for both the company and its investors, ensuring that the offering meets established standards for equity transactions on the exchange.
Net proceeds, along with existing cash, cash equivalents, and marketable securities are expected to extend cash runway into Q2 2026 and enable expansion of DKN-01 DeFianCe clinical trial and development program
The private placement investors included new and existing investors, including Gilead Sciences, Inc., a life sciences-focused investor, Samsara BioCapital, 683 Capital Partners, LP, Laurion Capital Management, and Rock Springs Capital.
J.P. Morgan acted as the exclusive placement agent for the transaction.
Leap intends to use the net proceeds from the financing to fund the continued development of its lead monoclonal antibody program, DKN-01, by expanding the randomized controlled Part B of the DeFianCe Study in patients with second-line colorectal cancer from 130 to 180 patients, by enabling data to mature in the randomized controlled Part C of the DisTinGuish study in patients with first-line gastric cancer, and by manufacturing clinical trial material to permit Phase 3 readiness, and for working capital and general corporate purposes. The net proceeds from this financing, combined with existing cash, cash equivalents and marketable securities, are expected to fund Leap's operating and capital expenditures into the second quarter of 2026.
The shares of Common Stock and the pre-funded warrants to be sold in this financing, as well as the shares of Common Stock issuable upon exercise of the pre-funded warrants, have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state or other applicable jurisdiction's securities laws and may not be offered or sold in
This press release shall not constitute an offer to sell or a solicitation of an offer to buy Leap's Common Stock, pre-funded warrants, or any other security of Leap, nor shall there be any offer, solicitation, or sale of Leap's Common Stock, pre-funded warrants, or any other security of Leap in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The private placement is being conducted in accordance with applicable Nasdaq rules and was priced to satisfy the "Minimum Price" requirement (as defined in the Nasdaq rules).
About Leap Therapeutics
Leap Therapeutics (Nasdaq: LPTX) is focused on developing targeted and immuno-oncology therapeutics. Leap's most advanced clinical candidate, DKN-01, is a humanized monoclonal antibody targeting the Dickkopf-1 (
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are based upon current plans, estimates and expectations of the management of Leap that are subject to various risks and uncertainties that could cause actual results to differ materially from such statements. The inclusion of forward-looking statements should not be regarded as a representation that such plans, estimates and expectations will be achieved. Words such as "anticipate," "expect," "project," "intend," "believe," "may," "will," "should," "plan," "could," "continue," "target," "contemplate," "estimate," "forecast," "guidance," "predict," "possible," "potential," "pursue," "likely," and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements.
All statements, other than historical facts, including statements regarding the potential safety, efficacy, and regulatory and clinical progress of Leap's product candidates; the anticipated expansion of the DeFianCe study and timing for completion of clinical trials and release of clinical trial data and the expectations surrounding the outcomes thereof; Leap's future clinical or preclinical product development plans for any of Leap's product candidates; Leap's estimations of projected cash runway; the anticipated closing date of the private placement; the amount of proceeds to be received by Leap and Leap's intended use of proceeds from the private placement; and any assumptions underlying any of the foregoing, are forward-looking statements. Important factors that could cause actual results to differ materially from Leap's plans, estimates or expectations could include, but are not limited to: (i) Leap's ability to successfully execute its clinical trials and the timing of enrollment in and cost of such clinical trials; (ii) the results of Leap's clinical trials and pre-clinical studies; (iii) Leap's ability to successfully enter into new strategic partnerships for DKN-01 or any of its other programs and to maintain its ongoing collaborations with BeiGene, NovaRock and Adimab; (iv) whether any Leap clinical trials and products will receive approval from the
CONTACT:
Douglas E. Onsi
President & Chief Executive Officer
Leap Therapeutics, Inc.
617-714-0360
donsi@leaptx.com
Matthew DeYoung
Investor Relations
Argot Partners
212-600-1902
leap@argotpartners.com
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SOURCE Leap Therapeutics, Inc.
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