Moleculin Announces Pricing of $3.5 Million Registered Direct Offering and Concurrent Private Placement Priced At The Market Under Nasdaq Rules

Rhea-AI Summary

Moleculin Biotech (MBRX) has announced a $3.5 million registered direct offering and concurrent private placement priced at $1.07 per share. The deal includes the sale of 3,271,029 shares of common stock (or pre-funded warrants) and warrants to purchase up to 6,542,058 additional shares.

The warrants will have an exercise price of $1.07 per share, becoming exercisable upon shareholder approval, and will expire 5 years from the initial exercise date. Roth Capital Partners is serving as the exclusive placement agent.

The offering is expected to close around February 26, 2025. The company plans to use the net proceeds for working capital and general corporate purposes. The common stock offering is being conducted under an effective shelf registration statement, while the warrants are being issued through a private placement.

Positive

• Secured $3.5M in new funding
• 5-year warrant term provides long-term financing flexibility

Negative

• Potential significant dilution with 3.27M new shares plus 6.54M warrant shares
• Offering price represents current market conditions
• Additional shareholder approval required for warrant exercise

Insights

Biotech Financial Analyst

Moleculin Biotech's $3.5 million capital raise represents a significant financial maneuver for this late-stage pharmaceutical company, particularly given its current micro-cap status with a market capitalization of only $4.78 million. The structure of this offering reveals several critical insights for investors.

The at-market pricing of $1.07 per share is notable - typically, micro-cap biotech financings come at substantial discounts to market price. This suggests the institutional investor sees fair value at current levels, which is moderately positive. However, the dilution impact is substantial: the immediate issuance of 3.27 million shares represents a 73% increase in the company's outstanding shares, significantly diluting existing shareholders' ownership.

More concerning is the warrant structure. The accompanying warrants to purchase 6.54 million additional shares (2x the initial shares) represent potential future dilution that would more than triple the current share count if fully exercised. The requirement for shareholder approval before these warrants become exercisable indicates potential concerns about exceeding authorized share limits or Nasdaq listing requirements.

For a company describing itself as "late-stage," this relatively small financing raises questions about Moleculin's development timeline and cash runway. Late-stage clinical trials typically require substantially more capital than $3.5 million. The vague use of proceeds for "working capital and general corporate purposes" rather than specific clinical milestones suggests this may be more of a bridge financing to sustain operations while pursuing larger funding opportunities or partnerships.

The involvement of Roth Capital Partners, a boutique investment bank specializing in small-cap companies, is typical for financings of this size but doesn't necessarily signal broader institutional interest or validation of Moleculin's technology.

Looking at the company's pipeline targeting hard-to-treat tumors and viruses, this financing likely provides only enough runway for advancement of their programs. Investors should closely monitor subsequent announcements for evidence that this capital is being deployed effectively toward value-creating milestones rather than simply extending the corporate timeline.

For existing shareholders, this financing represents a significant ownership dilution with uncertain benefits, while new investors gain exposure to Moleculin's portfolio at a price point endorsed by at least one institutional investor, albeit with considerable risk given the company's micro-cap status and apparent ongoing cash needs.

HOUSTON, Feb. 25, 2025 /PRNewswire/ -- Moleculin Biotech, Inc., (Nasdaq: MBRX) ("Moleculin" or the "Company"), a late-stage pharmaceutical company with a broad portfolio of drug candidates targeting hard-to-treat tumors and viruses, today announced it has entered into a securities purchase agreement with an institutional investor for the purchase and sale of 3,271,029 shares of common stock (or pre-funded warrants in lieu thereof) in a registered direct offering and warrants to purchase up to 6,542,058 shares of common stock in a concurrent private placement (together with the registered direct offering, the "Offering") at a combined purchase price of $1.07 per share and accompanying warrants. The warrants issued pursuant to the concurrent private placement will have an exercise price of $1.07 per share, will be exercisable upon the receipt of shareholder approval following the date of issuance and will expire 5 years from the initial exercise date.

Roth Capital Partners is acting as the exclusive placement agent for the Offering.

The closing of the Offering is expected to occur on or about February 26, 2025, subject to the satisfaction of customary closing conditions. The gross proceeds from the Offering are expected to be approximately $3.5 million before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes.

The common stock (or pre-funded warrants in lieu thereof) will be issued in a registered direct offering pursuant to an effective shelf registration statement on Form S-3 (File No. 333-280064) previously filed with the U.S. Securities and Exchange Commission (the "SEC"), under the Securities Act of 1933, as amended (the "Securities Act"), and declared effective by the SEC on July 1, 2024. The warrants will be issued in a concurrent private placement. A prospectus supplement describing the terms of the proposed registered direct offering will be filed with the SEC and once filed, will be available on the SEC's website located at http://www.sec.gov or by contacting Roth Capital Partners, LLC at 888 San Clemente Drive, Newport Beach CA 92660, by phone at (800) 678-9147.

The private placement of the warrants and the underlying shares will be made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and/or Regulation D thereunder. Accordingly, the securities issued in the concurrent private placement 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 of the Securities Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, 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 Moleculin Biotech, Inc.

Moleculin Biotech, Inc. is a Phase 3 clinical stage pharmaceutical company advancing a pipeline of therapeutic candidates addressing hard-to-treat tumors and viruses. The Company's lead program, Annamycin, is a next-generation anthracycline designed to avoid multidrug resistance mechanisms and to eliminate the cardiotoxicity common with currently prescribed anthracyclines. Annamycin is currently in development for the treatment of relapsed or refractory acute myeloid leukemia (AML) and soft tissue sarcoma (STS) lung metastases.

The Company is initiating the MIRACLE (Moleculin R/R AML AnnAraC Clinical Evaluation) Trial (MB-108), a pivotal, adaptive design Phase 3 trial evaluating Annamycin in combination with cytarabine, together referred to as AnnAraC, for the treatment of relapsed or refractory acute myeloid leukemia. Following a successful Phase 1B/2 study (MB-106), with input from the FDA, the Company believes it has substantially de-risked the development pathway towards a potential approval for Annamycin for the treatment of AML. This study is subject to appropriate future filings with potential additional feedback from the FDA and their foreign equivalents.

Additionally, the Company is developing WP1066, an Immune/Transcription Modulator capable of inhibiting p-STAT3 and other oncogenic transcription factors while also stimulating a natural immune response, targeting brain tumors, pancreatic and other cancers. Moleculin is also engaged in the development of a portfolio of antimetabolites, including WP1122 for the potential treatment of pathogenic viruses, as well as certain cancer indications.

For more information about the Company, please visit www.moleculin.com and connect on X, LinkedIn and Facebook.

Forward-Looking Statements

Some of the statements in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Forward-looking statements in this press release include, without limitation, closing of the offering and the use of proceeds. Although Moleculin believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Moleculin has attempted to identify forward-looking statements by terminology including 'believes,' 'estimates,' 'anticipates,' 'expects,' 'plans,' 'projects,' 'intends,' 'potential,' 'may,' 'could,' 'might,' 'will,' 'should,' 'approximately' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under Item 1A. "Risk Factors" in our most recently filed Form 10-K filed with the SEC and updated from time to time in our Form 10-Q filings and in our other public filings with the SEC. Any forward-looking statements contained in this release speak only as of its date. We undertake no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events.

Investor Contact:
JTC Team, LLC
Jenene Thomas
(908) 824-0775
MBRX@jtcir.com

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SOURCE Moleculin Biotech, Inc.

FAQ

What is the size and price of Moleculin Biotech's (MBRX) February 2025 offering?

The offering is $3.5 million with shares priced at $1.07, including 3,271,029 common shares and warrants for 6,542,058 additional shares.

When will the warrants from MBRX's 2025 offering become exercisable?

The warrants will become exercisable upon receiving shareholder approval after issuance, with a 5-year expiration from initial exercise date.

How does Moleculin (MBRX) plan to use the proceeds from its February 2025 offering?

MBRX intends to use the net proceeds for working capital and general corporate purposes.

What is the exercise price for the warrants in MBRX's February 2025 private placement?

The warrants have an exercise price of $1.07 per share.