Phio Pharmaceuticals Announces Closing of $1.83 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

Phio Pharmaceuticals (NASDAQ: PHIO) has closed a $1.83 million registered direct offering of 610,000 common shares at $3.00 per share, along with concurrent private placement warrants for 1,220,000 shares at $3.00 exercise price, expiring in 24 months. Since December 2024, the company has raised total gross proceeds of approximately $12.08 million, including $9.15 million from offerings and $2.9 million from warrant exercises.

The funds will support working capital and development costs for PH-762's Phase 1b clinical trial treating cutaneous squamous cell carcinoma, melanoma, and Merkel cell carcinoma. Additionally, proceeds will advance development of PH-894, targeting BRD4 protein in solid tumors. H.C. Wainwright & Co. served as the exclusive placement agent for the offering.

Insights

Financial Analyst

The latest $1.83M registered direct offering by Phio Pharmaceuticals represents a critical financing milestone for this micro-cap biotech, bringing their total recent fundraising to $12.08M. This financing strategy, combining direct offerings with warrant exercises, demonstrates management's efforts to secure runway while minimizing market impact through at-the-market pricing.

The deal structure warrants careful analysis: The $3.00 per share price point, coupled with a 1:2 warrant coverage ratio, suggests significant dilution potential. With 1.22 million warrants issued at the same strike price, the company has effectively created a secondary dilution event that could materialize over the next 24 months if the stock trades above $3.00.

From a cash runway perspective, this financing appears strategically timed to support the critical Phase 1b trial of PH-762 in multiple skin cancers. However, given typical burn rates for clinical-stage biotechs, the $12.08M total raise may provide only 12-18 months of operational runway, suggesting additional financing needs could arise before reaching key clinical milestones.

The successful exercise of previous warrants at $5.45 is noteworthy, as it indicates some investor confidence in the company's potential. However, the lower pricing of this new offering at $3.00 reflects current market conditions and the company's need to ensure successful capital raising, albeit at the cost of greater dilution.

Raised approximately $12.08 million in gross proceeds since beginning of December 2024

Proceeds intended to be directed for development costs to be incurred in connection with PH-762 clinical activities

Marlborough, Massachusetts--(Newsfile Corp. - January 21, 2025) - Phio Pharmaceuticals Corp. (NASDAQ: PHIO), a clinical-stage biotechnology company that develops therapeutics using its INTASYL® siRNA gene silencing technology to make the body's immune cells more effective in killing cancer cells, today announced the closing of its registered direct offering previously announced on January 16, 2024, priced at-the-market under Nasdaq rules, for the purchase and sale of an aggregate of 610,000 shares of its common stock at a purchase price of $3.00 per share. In addition, in a concurrent private placement, the Company issued short-term unregistered warrants to purchase up to an aggregate of 1,220,000 shares of common stock. The short-term warrants have an exercise price of $3.00 per share, are exercisable upon issuance and will expire twenty-four months following the date of issuance.

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

The aggregate gross proceeds to the Company from this financing were $1.83 million, before deducting the placement agent fees and other offering expenses payable by the Company. The total gross proceeds raised by the Company in registered direct offerings and concurrent private placements since the beginning of December 2024 are approximately $9.15 million, before deducting placement agent fees and other offering expenses payable by the Company. Additional gross proceeds of approximately $2.9 million were raised from the exercise of warrants previously issued on July 12, 2024 having an exercise price of $5.45 per share.

Phio intends to use the net proceeds from these financings for working capital and other general corporate purposes, including to fund the remaining clinical activities for Phio's Phase 1b clinical trial of its lead product candidate, PH-762, for the treatment of patients with cutaneous squamous cell carcinoma, melanoma and Merkel cell carcinoma. Phio expects that the proceeds will allow it to continue development activities on its second clinical target, PH-894, which silences the BRD4 protein implicated in a number of solid tumors.

"Procurement of these funds provides a financial pathway to realizing the completion of the PH-762 Phase 1b clinical trial, a critical milestone for the development program," commented Robert Bitterman, Phio President and CEO. "We are also excited to be able to move the PH-894 program forward."

The shares of common stock issued in the January 16, 2024 financing (but not the short-term warrants issued in the private placement or the shares of common stock underlying such short-term warrants) were offered by the Company pursuant to a "shelf" registration statement on Form S-3 (File No. 333-279557) filed with the Securities and Exchange Commission ("SEC") on May 20, 2024 and became effective on July 1, 2024. The registered direct offering of the shares of common stock were made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. The prospectus supplement and the accompanying prospectus relating to the shares of common stock offered in the registered direct offering have been filed with the SEC and are available at the SEC's website at www.sec.gov. Electronic copies of the prospectus supplement and the accompanying prospectus relating to the registered direct offering may also be obtained by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by telephone at (212) 856-5711 or e-mail at placements@hcwco.com.

The short-term warrants described above were issued in a concurrent private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Regulation D promulgated thereunder and, along with the shares of common stock underlying the short-term warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the short-term warrants and underlying shares of common stock 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 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.

About Phio Pharmaceuticals Corp.

Phio Pharmaceuticals Corp. (NASDAQ: PHIO) is a clinical-stage biotechnology company advancing its proprietary INTASYL siRNA gene silencing technology to eliminate cancer.  INTASYL can target and silence virtually any gene with high degree of specificity across a wide range of cell types and tissues. INTASYL is designed to enhance the ability of immune cells to more effectively kill tumor cells.  INTASYL has also demonstrated enhancement adoptive cell therapy. Notably, INTASYL is a self-delivering RNAi technology focused on immuno-oncology therapeutics without the need for formulation enhancements or manipulations to reach its target. 

Phio's lead clinical program, PH-762, is an INTASYL compound that silences PD-1. PH-762 is a potential non-surgical treatment for skin cancers. The on-going Phase 1b trial (NCT# 06014086) received FDA clearance for an Investigational New Drug Application to evaluate PH-762 in the treatment of cutaneous SCC, melanoma and Merkel cell carcinoma in second quarter of 2023. 

For additional information, visit the Company's website, www.phiopharma.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "intends," "believes," "anticipates," "indicates," "plans," "expects," "suggests," "may," "would," "should," "potential," "designed to," "will," "ongoing," "estimate," "forecast," "target," "predict," "could" and similar references, although not all forward-looking statements contain these words. Examples of forward-looking statements contained in this press release include, among others, the use of proceeds from the recent financings, the possibility that our INTASYL® siRNA gene silencing technology will make the body's immune cells more effective in killing cancer cells and statements regarding our commercial and clinical strategy, development plans and timelines and other future events.  

These statements are based only on our current beliefs, expectations and assumptions and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control.  Our actual results may differ materially from those indicated in the forward-looking statements as a result of a number of important factors, including, but not limited to, the impact to our business and operations by inflationary pressures, rising interest rates, recession fears, the development of our product candidates, results from our preclinical and clinical activities, our ability to execute on business strategies, our ability to develop our product candidates with collaboration partners, and the success of any such collaborations, the timeline and duration for advancing our product candidates into clinical development, the timing or likelihood of regulatory filings and approvals, the success of our efforts to commercialize our product candidates if approved, our ability to manufacture and supply our product candidates for clinical activities, and for commercial use if approved, the scope of protection we are able to establish and maintain for intellectual property rights covering our technology platform, our ability to obtain future financing, market and other conditions and those identified in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q under the caption "Risk Factors" and in other filings the Company periodically makes with the SEC. Readers are urged to review these risk factors and to not act in reliance on any forward-looking statements, as actual results may differ from those contemplated by our forward-looking statements. Phio does not undertake to update forward-looking statements to reflect a change in its views, events or circumstances that occur after the date of this release, except as required by law.  

Contact:
Phio Pharmaceuticals Corp. 
Jennifer Phillips: jphillips@phiopharma.com 
Corporate Affairs  

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/237986

FAQ

How much did Phio Pharmaceuticals (PHIO) raise in their January 2024 offering?

Phio Pharmaceuticals raised $1.83 million in gross proceeds through a registered direct offering of 610,000 shares at $3.00 per share in January 2024.

What are the terms of PHIO's January 2024 warrant offering?

The warrants allow purchase of up to 1,220,000 shares at $3.00 per share, are exercisable immediately, and expire 24 months from issuance.

How will PHIO use the proceeds from their January 2024 financing?

The proceeds will fund PH-762 Phase 1b clinical trial development costs and advance the development of PH-894, their second clinical target.

What is the total amount raised by PHIO since December 2024?

PHIO has raised approximately $12.08 million in total gross proceeds since December 2024, including $9.15 million from offerings and $2.9 million from warrant exercises.

What cancers is PHIO's PH-762 clinical trial targeting?

PH-762 Phase 1b clinical trial targets cutaneous squamous cell carcinoma, melanoma, and Merkel cell carcinoma.