Nektar Therapeutics Announces $30 Million Private Placement Financing with TCGX
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Insights
The private placement of $30 million in securities by Nektar Therapeutics to TCGX represents a strategic financial maneuver to strengthen the company's cash position. This capital infusion, at a significant premium to the recent average stock price, indicates investor confidence in Nektar's potential, particularly in its ongoing Phase 2b clinical trials for rezpegaldesleukin. The transaction's structure, utilizing pre-funded warrants, allows immediate capital increase while providing TCGX with future equity at a nominal exercise price, effectively a commitment to long-term investment.
From a financial perspective, this move extends Nektar's cash runway into the third quarter of 2026, which is crucial for a biotech company that requires substantial funding to advance clinical trials before generating revenue. The premium price also minimizes equity dilution relative to the amount raised, a positive signal to current shareholders. However, investors should be mindful of the potential dilutive effect once the warrants are exercised, despite the current non-dilutive appearance.
Rezpegaldesleukin's role as an agonistic T regulatory cell biologic indicates a significant advancement in auto-immune disorder treatments. By expanding functional T reg cells and engaging immunoregulatory pathways, it has the potential to address diseases with high unmet medical needs, such as atopic dermatitis and alopecia areata. The successful progression of rezpegaldesleukin through Phase 2b studies could disrupt the current treatment landscape and offer new therapeutic options for patients.
The financial commitment from TCGX underscores the therapeutic's promise and the anticipation of topline data in the first half of 2025. These data points will be critical in determining the drug's efficacy and safety profile, which, if positive, could lead to significant value creation for Nektar and its stakeholders.
The structuring of this private placement as a PIPE (private investment in public equity) and the use of pre-funded warrants are mechanisms that comply with the Securities Act of 1933, specifically under Section 4(a)(2) and Rule 506 of Regulation D. These exemptions allow Nektar to raise capital efficiently without the immediate need for a public offering and registration. It's important to note that the agreement includes a commitment to submit a registration statement for the underlying common stock, ensuring future compliance with securities laws once the warrants are exercised.
Investors should recognize that the legal framework for such transactions is designed to balance the company's need for capital with investor protection. The exemption from registration requirements, while lawful, requires the company to adhere strictly to the conditions set forth in the relevant securities laws, including selling only to accredited investors and providing necessary disclosures.
In the PIPE, Nektar is selling 25 million shares of its common stock, in the form of a pre-funded warrant, at a price of
The PIPE is expected to close on or before March 6, 2024, subject to customary closing conditions. Nektar has agreed to submit a registration statement filing for the underlying Common Stock no later than 90 days after the closing.
"We are pleased to bring on TCGX as a new high-quality, long-term investor in Nektar as we advance rezpegaldesleukin through our Phase 2b studies in atopic dermatitis and alopecia areata," said Howard Robin, President and Chief Executive Officer of Nektar Therapeutics. "We are on track to report topline data from these studies in the first half of 2025, which will represent significant inflection points for Nektar. Today's financing further bolsters our financial position and extends the company's cash runway well into the third quarter of 2026."
Rezpegaldesleukin is a novel agonistic T regulatory cell biologic that is designed to both dampen the inflammatory response and simultaneously restore immune balance by directly expanding functional T reg cells and engaging multiple immunoregulatory pathways.
The private placement is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act of 1933, as amended and Rule 506 of Regulation D of the Securities Act of 1933, as amended and in reliance on similar exemptions under applicable state laws.
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 jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Nektar Therapeutics
Nektar Therapeutics is a biotechnology company with a wholly owned R&D pipeline of investigational medicines in immunology and oncology as well as a portfolio of approved partnered medicines. Nektar is headquartered in
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements related to the expected completion of the private placement, expectations for reporting topline data for rezpegaldesleukin in the first half of 2025, and therapeutic potential of, and future development plans for, rezpegaldesleukin. These and other risks are discussed in Nektar's filings with the SEC, including, without limitation, its most recent Annual Report on Form 10-K, and its periodic reports on Form 10-Q and Form 8-K. Nektar intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terms such as, but not limited to, "may," "might," "advance," "will," "objective," "intend," "should," "could," "can," "would," "expect," "believe," "anticipate," "project," "target," "design," "estimate," "predict," "potential," "plan," "on track," or similar expressions or the negative of those terms. Such forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions, and uncertainties. Any forward-looking statements contained in this release represent Nektar's views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date. Except as required by law, Nektar explicitly disclaims any obligation to update any forward-looking statements.
Contact:
For Investors:
Vivian Wu of Nektar Therapeutics
(628) 895-0661
For Media:
David Rosen of Argot Partners
(212) 600-1902
david.rosen@argotpartners.com
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SOURCE Nektar Therapeutics
FAQ
What is the purpose of Nektar Therapeutics' private placement financing with TCGX?
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What is the price per share at which Nektar is selling its common stock in the private placement?
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What is rezpegaldesleukin and what are Nektar's plans for it?
