Vaxcyte Announces Pricing of $1.3 Billion Public Offering

Rhea-AI Summary

Vaxcyte (Nasdaq: PCVX) has announced the pricing of a $1.3 billion public offering of common stock and pre-funded warrants. The company is selling 10,194,175 shares of common stock at $103.00 per share and 2,427,184 pre-funded warrants at $102.999 each. The exercise price for the warrants is $0.001 per share. Vaxcyte has granted underwriters a 30-day option to purchase up to 1,893,203 additional shares. The offering is expected to close on September 6, 2024. Major financial institutions are acting as joint book-running managers for the offering.

Positive

• Substantial capital raise of $1.3 billion through public offering
• High share price of $103.00 indicates strong market valuation
• Potential for additional capital through underwriters' option to purchase extra shares

Negative

• Significant dilution of existing shareholders' ownership
• Increased outstanding shares may put downward pressure on stock price

Insights

Financial Analyst

Vaxcyte's $1.3 billion public offering is a significant capital raise that substantially bolsters the company's financial position. The pricing at $103 per share indicates strong investor confidence, especially considering it's a clinical-stage company without marketed products. This influx of capital should provide Vaxcyte with a robust runway to advance its vaccine pipeline, potentially accelerating development timelines and expanding research efforts. However, investors should note the dilutive effect on existing shareholders, with over 12.6 million new shares being issued. The inclusion of pre-funded warrants adds complexity to the capital structure but provides flexibility for certain investors. Overall, this offering strengthens Vaxcyte's position in the competitive vaccine development landscape.

Biotech Industry Expert

This substantial capital raise positions Vaxcyte favorably in the vaccine development arena. Their focus on high-fidelity vaccines for bacterial diseases addresses a critical medical need. The strong investor backing, evidenced by the $1.3 billion raise, suggests confidence in Vaxcyte's technology platform and pipeline potential. This funding could accelerate the development of their lead candidates, potentially bringing novel vaccines to market faster. However, it's important to note that Vaxcyte is still in clinical stages and success in vaccine development is never guaranteed. The involvement of multiple top-tier investment banks as joint book-running managers adds credibility to the offering and indicates broad institutional interest in Vaxcyte's prospects.

Market Strategist

Vaxcyte's successful $1.3 billion raise amid challenging market conditions for biotech companies is noteworthy. The pricing at $103 per share, likely near the current market price, suggests strong demand without excessive dilution. The inclusion of pre-funded warrants at $102.999 is an intelligent move, providing immediate capital while deferring some dilution. This substantial cash infusion should interest growth-focused investors, potentially driving near-term stock appreciation. However, the 30-day option for underwriters to purchase additional shares could create some selling pressure if exercised. Long-term, this financing solidifies Vaxcyte's position in the competitive vaccine market, potentially attracting strategic partnerships or acquisition interest from larger pharmaceutical companies.

SAN CARLOS, Calif., Sept. 04, 2024 (GLOBE NEWSWIRE) -- Vaxcyte, Inc. (Nasdaq: PCVX), a clinical-stage vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases, announced today the pricing of an underwritten public offering of common stock and pre-funded warrants. Vaxcyte is selling 10,194,175 shares of common stock and pre-funded warrants to purchase 2,427,184 shares of common stock in the offering. The shares of common stock are being sold at a public offering price of $103.00 per share, and the pre-funded warrants are being sold at a public offering price of $102.999 per pre-funded warrant. The exercise price of the pre-funded warrants is $0.001 per share. The aggregate gross proceeds to Vaxcyte from this offering are expected to be approximately $1.3 billion, before deducting underwriting discounts and commissions and other offering expenses, and excluding the exercise of any pre-funded warrants. All shares of common stock and pre-funded warrants to be sold in the offering will be offered by Vaxcyte. Vaxcyte has granted the underwriters a 30-day option to purchase up to an additional 1,893,203 shares of its common stock at the public offering price per share, less underwriting discounts and commissions.

The offering is expected to close on September 6, 2024, subject to the satisfaction of customary closing conditions.

BofA Securities, Jefferies, Leerink Partners, Goldman Sachs & Co. LLC, Evercore ISI, Guggenheim Securities and Mizuho are acting as joint book-running managers for the offering.

A shelf registration statement relating to the offered securities was filed with the Securities and Exchange Commission (SEC) and was automatically effective upon filing on May 24, 2024. A preliminary prospectus supplement and accompanying prospectus relating to the offering has been filed, and a final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website, located at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to this offering may be obtained, when available, from BofA Securities NC1-022-02-25, Attention: Prospectus Department, 201 North Tryon Street, Charlotte, North Carolina 28255-0001 or by email at dg.prospectus_requests@bofa.com; Jefferies LLC, Attention: Equity Syndicate Department, 520 Madison Avenue, New York, New York 10022, by telephone at 1-877-821-7388, or by email at Prospectus_Department@Jefferies.com; Leerink Partners LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, MA 02109, by email at syndicate@leerink.com or by phone at (800) 808-7525, ext. 6105; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by email at prospectus-ny@ny.email.gs.com or by phone at (866) 471-2526; Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, by telephone at 1-888-474-0200 or by email at ecm.prospectus@evercore.com; Guggenheim Securities, LLC, Attention: Equity Syndicate Department, 330 Madison Avenue, 8th Floor, New York, NY 10017, by telephone at (212) 518-9544, or by email at GSEquityProspectusDelivery@guggenheimpartners.com; and Mizuho Securities USA LLC, 1271 Avenue of the Americas, Third Floor, New York, NY 10021, or by email at Us-ecm@mizuhogroup.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 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 Vaxcyte

Vaxcyte is a vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases. The Company is developing broad-spectrum conjugate and novel protein vaccines to prevent or treat bacterial infectious diseases. VAX-31 is a Phase 3-ready 31-valent, carrier-sparing pneumococcal conjugate vaccine (PCV) being developed for the prevention of invasive pneumococcal disease (IPD) in adults and infants and is the broadest-spectrum PCV candidate in the clinic today. VAX-24, the Company’s 24-valent PCV candidate, is designed to cover more serotypes than any infant PCV on-market and is currently being evaluated in a Phase 2 infant study. Both VAX-31 and VAX-24 are designed to improve upon the standard-of-care PCVs by covering the serotypes in circulation that are responsible for a significant portion of IPD and are associated with high case-fatality rates, antibiotic resistance and meningitis, while maintaining coverage of previously circulating strains that are currently contained through continued vaccination practice.

Vaxcyte is re-engineering the way highly complex vaccines are made through modern synthetic techniques, including advanced chemistry and the XpressCF™ cell-free protein synthesis platform, exclusively licensed from Sutro Biopharma, Inc. Unlike conventional cell-based approaches, the Company’s system for producing difficult-to-make proteins and antigens is intended to accelerate its ability to efficiently create and deliver high-fidelity vaccines with enhanced immunological benefits. Vaxcyte’s pipeline also includes VAX-A1, a prophylactic vaccine candidate designed to prevent Group A Strep infections; VAX-PG, a therapeutic vaccine candidate designed to slow or stop the progression of periodontal disease; and VAX-GI, a vaccine candidate designed to prevent Shigella. Vaxcyte is driven to eradicate or treat invasive bacterial infections, which have serious and costly health consequences when left unchecked.

Contacts:

Patrick Ryan, Executive Director, Corporate Communications
Vaxcyte, Inc.
415-606-5135
media@vaxcyte.com

Jennifer Zibuda, Senior Director, Investor Relations
Vaxcyte, Inc.
860-729-8902
investors@vaxcyte.com

FAQ

What is the size of Vaxcyte's (PCVX) public offering announced on September 4, 2024?

Vaxcyte (PCVX) announced a $1.3 billion public offering of common stock and pre-funded warrants on September 4, 2024.

How many shares and pre-funded warrants is Vaxcyte (PCVX) selling in this offering?

Vaxcyte (PCVX) is selling 10,194,175 shares of common stock and pre-funded warrants to purchase 2,427,184 shares of common stock in this offering.

What is the price per share for Vaxcyte's (PCVX) common stock in this public offering?

The price per share for Vaxcyte's (PCVX) common stock in this public offering is $103.00.

When is the expected closing date for Vaxcyte's (PCVX) public offering?

The expected closing date for Vaxcyte's (PCVX) public offering is September 6, 2024, subject to customary closing conditions.