Ultragenyx Announces Proposed Public Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

Ultragenyx Pharmaceutical has announced a public offering of common stock and pre-funded warrants worth up to $350 million. An additional 30-day option allows underwriters to purchase up to $52.5 million more shares. The offering's completion is subject to market conditions. J.P. Morgan, Goldman Sachs, BofA Securities, and TD Cowen are managing the offering. A registration statement for these securities became effective on February 21, 2024. The offering will be conducted via a prospectus supplement and accompanying prospectus.

Positive

• Public offering could raise up to $350 million in capital.
• Underwriters have an option to purchase an additional $52.5 million in shares.
• Funds could support further development and commercialization of therapies for rare genetic diseases.

Negative

• Potential shareholder dilution from issuing new shares.
• Completion of the offering is subject to market conditions, implying uncertainty.
• Increased shares might lower earnings per share (EPS) in the short term.

Insights

Financial Analyst

Ultragenyx's public offering of $350 million in common stock and pre-funded warrants is an important move. For retail investors, it's important to understand the immediate and long-term financial implications. In the short term, this offering could lead to dilution of existing shares, which typically results in a temporary drop in share price as the market adjusts to the increased share count. However, it can also provide the company with much-needed capital to fund its operations, research and possibly acquisitions.

In the long term, the potential benefits are significant. If Ultragenyx can effectively use this capital to advance its pipeline of therapies for rare genetic diseases, it could drive substantial growth. This offering may also be a signal of the company's confidence in their upcoming milestones and prospects. It's a good sign that major players like J.P. Morgan and Goldman Sachs are involved, as they usually vet such moves thoroughly.

Overall, while there may be some short-term pain due to dilution, the long-term outlook could be positive if the funds are used wisely and lead to successful product developments.

Market Research Analyst

From a market perspective, Ultragenyx's announcement indicates a strategic move to leverage favorable market conditions. The involvement of prominent underwriters like J.P. Morgan, Goldman Sachs and BofA Securities suggests confidence in the market's appetite for Ultragenyx's shares. Investors should note this market confidence as it often bodes well for the offering's success and the stock's future performance.

This capital infusion could enable Ultragenyx to accelerate its commercialization efforts and broaden its product pipeline. In the competitive biopharmaceutical landscape, having sufficient capital is essential for sustaining R&D activities and navigating regulatory hurdles. It also positions the company to better handle potential setbacks.

Investors should watch for updates on how these funds are allocated. Effective use could mean significant advancements and potentially lucrative returns in a market that places a premium on innovative therapies for rare diseases.

Biotech Industry Expert

For those following the biotech sector, this offering hints at Ultragenyx's ongoing strategy to maintain a robust financial stance. Raising $350 million suggests the company is gearing up for intensive R&D activities, possibly including late-stage clinical trials or new product launches. Given the high costs associated with biopharmaceutical R&D, having a solid cash position is vital.

The offering of pre-funded warrants is particularly interesting. These instruments allow investors to lock-in a position in the company without immediately increasing the share count, which can be less dilutive in the short term. It reflects Ultragenyx's consideration for existing shareholders while still raising necessary funds.

Long-term success in the biotech industry often hinges on the ability to sustain R&D efforts and navigate the lengthy approval processes for new therapies. If Ultragenyx can effectively channel these funds, it could greatly enhance their competitive edge in the rare disease market.

NOVATO, Calif., June 12, 2024 (GLOBE NEWSWIRE) -- Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE), a biopharmaceutical company focused on the development and commercialization of novel therapies for serious rare and ultrarare genetic diseases, today announced that it has commenced an underwritten public offering of up to $350,000,000 of shares of its common stock and, in lieu of issuing common stock to certain investors, pre-funded warrants to purchase shares of its common stock. In addition, the company is expected to grant the underwriters of the offering an option for a period of 30 days to purchase up to an additional $52,500,000 of shares of common stock at the public offering price, less the underwriting discount.

The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed. J.P. Morgan, Goldman Sachs & Co. LLC, BofA Securities and TD Cowen are acting as joint book-running managers for the offering.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission and became automatically effective on February 21, 2024. This offering is being made solely by means of a prospectus supplement and accompanying prospectus. When available, copies of the preliminary prospectus supplement and the accompanying prospectus related to the offering may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by telephone at 866-803-9204, or by email at prospectus-eq_fi@jpmchase.com; Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ny.email.gs.com; BofA Securities, NC1-002-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attention: Prospectus Department, or by email at dg.prospectus_requests@bofa.com; and TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, NY 10017, by telephone at (855) 495-9846 or by email at TD.ECM_Prospectus@tdsecurities.com.

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 offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Ultragenyx

Ultragenyx is a biopharmaceutical company committed to bringing novel products to patients for the treatment of serious rare and ultrarare genetic diseases. The company has built a diverse portfolio of approved therapies and product candidates aimed at addressing diseases with high unmet medical need and clear biology for treatment, for which there are typically no approved therapies treating the underlying disease.

The company is led by a management team experienced in the development and commercialization of rare disease therapeutics. Ultragenyx’s strategy is predicated upon time- and cost-efficient drug development, with the goal of delivering safe and effective therapies to patients with the utmost urgency.

Forward-Looking Statements

Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the anticipated public offering, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve substantial risks and uncertainties that could cause the company’s clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties related to market conditions and the completion of the public offering on the agreed terms or at all, and the satisfaction of customary closing conditions related to the proposed public offering. Ultragenyx undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Ultragenyx in general, see Ultragenyx's Registration Statement on Form S-3 filed with the Securities and Exchange Commission on February 21, 2024, as may be amended from time to time, together with its preliminary prospectus supplement and accompanying prospectus, and the documents incorporated by reference therein, including its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2024, and its subsequent periodic reports filed with the Securities and Exchange Commission.

Contact Ultragenyx Pharmaceutical Inc.
Investors & Media
Joshua Higa
ir@ultragenyx.com

FAQ

What is the purpose of Ultragenyx's proposed public offering?

The purpose is to raise up to $350 million by offering common stock and pre-funded warrants.

How much additional capital can underwriters purchase in Ultragenyx's offering?

Underwriters have a 30-day option to purchase up to an additional $52.5 million in shares.

When did the registration statement for Ultragenyx's securities become effective?

It became automatically effective on February 21, 2024.

What is the total potential capital Ultragenyx can raise through the offering and additional shares?

Ultragenyx can raise up to $402.5 million, including the additional shares.

What are the joint book-running managers for Ultragenyx's offering?

J.P. Morgan, Goldman Sachs, BofA Securities, and TD Cowen are managing the offering.