Praxis Precision Medicines, Inc. Announces Pricing of $150.0 Million Public Offering

Rhea-AI Summary

Praxis Precision Medicines, Inc. (NASDAQ: PRAX) announced the pricing of its underwritten public offering of 3,168,275 shares of its common stock at a public offering price per share of $35.50, with expected gross proceeds of approximately $150.0 million. The offering also includes pre-funded warrants to purchase up to an aggregate of 1,056,725 shares of common stock at a purchase price of $35.4999 per pre-funded warrant. The underwriters have been granted a 30-day option to purchase up to 633,750 additional shares of common stock at the public offering price.

Insights

Financial Analyst

Praxis Precision Medicines' recent public offering is a strategic move to raise capital, indicative of the company's efforts to fund its research and development activities, particularly for therapies targeting CNS disorders. The offering price of $35.50 per share, alongside the alternative of pre-funded warrants, is designed to attract a broad range of investors. The gross proceeds of $150 million, before expenses, signify a substantial influx of funds that can be channeled into ongoing clinical trials and operational expansions.

The decision to offer pre-funded warrants, essentially a right to purchase stock at a negligible exercise price, is a notable strategy to accommodate investors who may be subject to ownership limitations. This flexibility could widen the investor base and potentially stabilize the stock's market performance post-offering. The 30-day option granted to underwriters to purchase additional shares provides a buffer to cover over-allotments, potentially reducing the risk of stock price volatility following the offering.

It's essential to assess the dilutive impact of the offering on current shareholders. While the capital raise is positive for the company's financial health and long-term growth, existing shareholders might experience a reduction in their ownership percentage, which could affect the stock price in the short term. Investors will be closely monitoring how effectively Praxis deploys the raised capital towards advancing its pipeline, as this will be critical in determining the offering's long-term success and its impact on shareholder value.

Biotech Market Research Analyst

The CNS therapeutic space is highly competitive and research-intensive, with a significant unmet need for novel treatments. Praxis Precision Medicines' focus on genetic insights to address neuronal excitation-inhibition imbalance positions it within a niche but potentially high-reward area of the biopharmaceutical industry. The capital raised through this public offering is expected to support the progression of its clinical-stage assets, which could lead to breakthrough therapies if successful.

Investor sentiment in biotech is often driven by clinical trial results and regulatory milestones. With Praxis's therapies still in the clinical stage, the company's valuation and the success of the public offering may hinge on the perceived potential of its pipeline. A successful trial or FDA approval in the future could significantly enhance the company's market capitalization. Conversely, any setbacks in clinical development could have a disproportionately negative effect on the stock's performance.

Market trends indicate that precision medicine is a growing field with a strong interest from both the public and private sectors. Praxis's investment in this area may position it well for strategic partnerships or acquisitions. The funds from this offering could thus not only support internal growth but also make Praxis an attractive partner in the precision medicine landscape.

Medical Research Analyst

The therapeutic focus on CNS disorders by Praxis Precision Medicines is significant due to the complexity and the high burden of these conditions. The excitation-inhibition imbalance is a fundamental mechanism implicated in various neurological and psychiatric disorders, suggesting that Praxis's research could have broad applications if successful. The funding from the public offering may accelerate the development of their pipeline, which could include treatments for epilepsy, psychiatric disorders and other neurological conditions.

Understanding the scientific basis for Praxis's approach requires recognizing the importance of synaptic plasticity and neuronal network dynamics in CNS health and disease. By targeting these pathways, Praxis aims to develop therapies that could offer better efficacy or fewer side effects than existing treatments. The company's ability to translate genetic insights into viable therapies is crucial, as it will determine the clinical and commercial potential of their products.

From a research perspective, the allocation of the new capital towards advancing preclinical studies, scaling up clinical trials, or expanding into new indications will be critical. The company's research outcomes will be closely watched by the medical community and could have a significant impact on treatment paradigms for CNS disorders if their approach proves to be effective.

BOSTON, Jan. 11, 2024 (GLOBE NEWSWIRE) -- Praxis Precision Medicines, Inc. (NASDAQ: PRAX), a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system (CNS) disorders characterized by neuronal excitation-inhibition imbalance, today announced the pricing of its underwritten public offering of 3,168,275 shares of its common stock at a public offering price per share of $35.50 and, in lieu of shares of common stock, pre-funded warrants to purchase up to an aggregate of 1,056,725 shares of common stock at a purchase price of $35.4999 per pre-funded warrant, which equals the public offering price per share of the common stock less the $0.0001 per share exercise price of each pre-funded warrant. The gross proceeds from the offering are expected to be approximately $150.0 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by Praxis. All shares and pre-funded warrants in the offering are being offered by Praxis. In addition, Praxis has granted the underwriters a 30-day option to purchase up to 633,750 additional shares of common stock at the public offering price, less the underwriting discount and commission. The offering is expected to close on or about January 16, 2024, subject to market conditions and the satisfaction of customary closing conditions.

Piper Sandler is acting as lead book-running manager for the offering. Truist Securities is also acting as a book-runner for the offering. H.C. Wainwright & Co. is acting as lead manager for the offering.

The offering is being made pursuant to a shelf registration statement on Form S-3, including a base prospectus, that was filed by Praxis with the Securities and Exchange Commission (SEC) on February 7, 2023 and declared effective by the SEC on February 9, 2023. A preliminary prospectus supplement related to the offering was filed with the SEC on January 10, 2024. The final prospectus supplement related to the offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Copies of the final prospectus supplement and the accompanying base prospectus relating to the offering, when available, may be obtained from: Piper Sandler & Co., 800 Nicollet Mall, J12S03, Minneapolis, MN 55402, Attention: Prospectus Department, by telephone at (800) 747-3924, or by email at prospectus@psc.com; or Truist Securities, Inc., Attention: Prospectus Department, 3333 Peachtree Road NE, 9th floor, Atlanta, GA 30326, email: TruistSecurities.prospectus@Truist.com, or by telephone: 1-800-685-4786.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 and other federal securities laws, including express or implied statements regarding Praxis’ future expectations, plans and prospects, including, without limitation, statements regarding the timing of the completion, and anticipated gross proceeds of the offering, as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “anticipate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or “would” and similar expressions that constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995.

The express or implied forward-looking statements included in this press release are only predictions and are subject to a number of risks, uncertainties and assumptions, including, without limitation: risks related to market conditions; uncertainties inherent in clinical trials; the expected timing of submissions for regulatory approval or review by governmental authorities; regulatory approvals to conduct trials; Praxis’ ongoing and planned preclinical activities, Praxis’ ability to initiate, enroll, conduct or complete ongoing and planned clinical trials and Praxis’ timelines for regulatory submissions; and other risks concerning Praxis’ programs and operations are described in additional detail in its Annual Report on Form 10-K for the year ended December 31, 2022, its Quarterly Reports on Form 10-Q and other subsequent filings made with the Securities and Exchange Commission. Although Praxis’ forward-looking statements reflect the good faith judgment of its management, these statements are based only on information and factors currently known by Praxis. As a result, you are cautioned not to rely on these forward-looking statements. Any forward-looking statement made in this press release speaks only as of the date on which it is made. Praxis undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

FAQ

What did Praxis Precision Medicines, Inc. (NASDAQ: PRAX) announce?

Praxis Precision Medicines, Inc. (NASDAQ: PRAX) announced the pricing of its underwritten public offering of 3,168,275 shares of its common stock at a public offering price per share of $35.50, with expected gross proceeds of approximately $150.0 million.

How many shares were offered in the public offering?

Praxis Precision Medicines, Inc. (NASDAQ: PRAX) offered 3,168,275 shares of its common stock in the public offering.

What is the purchase price of the pre-funded warrants?

The purchase price of the pre-funded warrants is $35.4999 per pre-funded warrant.

What is the 30-day option granted to the underwriters?

Praxis Precision Medicines, Inc. (NASDAQ: PRAX) has granted the underwriters a 30-day option to purchase up to 633,750 additional shares of common stock at the public offering price.

When is the offering expected to close?

The offering is expected to close on or before a specified date.