TScan Therapeutics Announces $30 Million Registered Direct Offering at a 37% Premium

Rhea-AI Summary

TScan Therapeutics (NASDAQ: TCRX) has secured a $30 million registered direct offering through the sale of pre-funded warrants to Lynx1 Capital Management LP and its advised fund. The warrants, priced at $4.00 each, will allow the purchase of up to 7,500,000 shares of voting common stock at $0.0001 per share, representing a 37% premium to the last closing price and a 34% premium over the 10-day volume weighted average closing price.

The financing, expected to close around December 27, 2024, extends TScan's operational runway from Q4 2026 to Q1 2027. The transaction builds upon Lynx1's existing investment in TScan, demonstrating continued support for the company's development of TCR-T cell therapies for cancer treatment.

Positive

• Secured $30M financing at a 37% premium to market price
• Extended cash runway into Q1 2027
• Strong support from existing investor showing confidence in company
• No immediate dilution due to warrant structure

Negative

• Future dilution potential when warrants are exercised
• Reliance on single investor for significant funding

Insights

Financial Analyst

This $30 million registered direct offering represents a strategic financial move with several notable aspects. The 37% premium over the current stock price is particularly remarkable, as most offerings typically come at a discount. The structure using pre-funded warrants with a nominal $0.0001 exercise price effectively functions as delayed equity, providing immediate capital while minimizing immediate dilution.

The extension of cash runway into Q1 2027 significantly strengthens TScan's financial position, providing approximately 2.5 years of operational funding. This extended runway is important for a clinical-stage biotech company, allowing them to advance their TCR-T therapy pipeline without immediate financing pressure. The fact that existing investor Lynx1 Capital is leading this financing at a premium signals strong confidence in TScan's technology and execution capability.

The deal structure using pre-funded warrants is tax-efficient and provides flexibility in timing of share issuance. For a company with a market cap of about $155 million, securing $30 million on these terms is a strong vote of confidence from institutional investors.

Biotech Research Analyst

The premium-priced financing from a knowledgeable healthcare investor validates TScan's TCR-T cell therapy platform. TCR-T represents a next-generation approach beyond conventional CAR-T, targeting intracellular proteins and potentially expanding the range of targetable cancer antigens. The extended cash runway is particularly valuable given the complex and lengthy clinical development timeline typical for cell therapies.

For retail investors unfamiliar with the science: Think of TCR-T cells as highly specialized cancer-hunting cells that can recognize targets hidden inside cancer cells, unlike earlier therapies that could only see targets on the cell surface. This technology could potentially treat many more types of cancers than current cell therapies.

The substantial financial commitment from Lynx1 suggests confidence in upcoming clinical milestones and the broader platform potential. This financing provides important stability during the critical clinical development phase where many biotech companies often struggle to maintain adequate funding.

WALTHAM, Mass., Dec. 26, 2024 (GLOBE NEWSWIRE) -- TScan Therapeutics, Inc. (Nasdaq: TCRX), a clinical-stage biotechnology company focused on the development of T cell receptor (TCR)-engineered T cell (TCR-T) therapies for the treatment of patients with cancer, today announced that it has entered into a securities purchase agreement with Lynx1 Capital Management LP (Lynx1) and an investment fund advised by Lynx1 for the sale of approximately $30 million of pre-funded warrants to purchase up to an aggregate of 7,500,000 shares of its voting common stock at a price of $4.00 per pre-funded warrant, each exercisable to purchase one share of voting common stock at an exercise price of $0.0001 per share, representing a premium of 37% to the last closing price of TScan Therapeutics’ common stock, and a 34% premium over the 10-day volume weighted average closing price. The financing is expected to close on or about December 27, 2024, subject to customary closing conditions.

“Lynx1 has been a long-standing and supportive TScan shareholder. We are very appreciative of Lynx1’s continued support and commitment to our mission of delivering life-changing TCR-T cell therapies to patients with cancer, as evidenced by this additional and substantial investment in TScan at a 37% premium,” said Gavin MacBeath, Ph.D., Chief Executive Officer.

“We recently reaffirmed that our cash resources were expected to fund our operations into the fourth quarter of 2026. With the incremental $30M gross proceeds from the sale of these pre-funded warrants, we now expect our cash resources to fund the company’s operations into the first quarter of 2027,” said Jason A. Amello, Chief Financial Officer.

A registration statement on Form S-3 (File No. 333-268260) relating to these securities were filed with the Securities and Exchange Commission (the SEC) on November 9, 2022 and was declared effective by the SEC on May 16, 2023. A final prospectus supplement and accompanying prospectuses relating to the offering will be filed with the SEC. These documents will be available for free on the SEC’s website at http://www.sec.gov.

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 other 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 other jurisdiction.

About TScan Therapeutics, Inc.

TScan is a clinical-stage biotechnology company focused on the development of T cell receptor (TCR)-engineered T cell (TCR-T) therapies for the treatment of patients with cancer. The Company’s lead TCR-T therapy candidates are in development for the treatment of patients with hematologic malignancies to prevent relapse following allogeneic hematopoietic cell transplantation (the ALLOHA^TM Phase 1 heme trial). The Company has developed and continues to expand its ImmunoBank, the Company’s repository of therapeutic TCRs that recognize diverse targets and are associated with multiple HLA types, to provide customized multiplex TCR-T therapies for patients with a variety of cancers (the PLEXI-T^TM Phase 1 solid tumor trial). The Company is currently enrolling patients into both clinical programs.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These and other risks are discussed in TScan’s filings with the SEC, including, without limitation, its most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and its periodic reports on Form 8-K, as well as the risks identified in the registration statements and the preliminary prospectus supplement relating to the offering. TScan 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 TScan’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, TScan explicitly disclaims any obligation to update any forward-looking statements.

Contacts

Heather Savelle
TScan Therapeutics, Inc.
VP, Investor Relations
857-399-9840
hsavelle@tscan.com

Maghan Meyers
Argot Partners
212-600-1902
TScan@argotpartners.com

FAQ

What is the size and terms of TScan Therapeutics' (TCRX) December 2024 offering?

TScan Therapeutics secured a $30 million registered direct offering through pre-funded warrants priced at $4.00 each, allowing the purchase of 7,500,000 shares at $0.0001 per share, representing a 37% premium to the last closing price.

How long will TCRX's cash runway extend after the December 2024 financing?

With the additional $30 million from the offering, TScan's cash runway is expected to extend into the first quarter of 2027, extended from the previous projection of fourth quarter 2026.

Who is the primary investor in TCRX's December 2024 warrant offering?

Lynx1 Capital Management LP and an investment fund advised by Lynx1 are the investors in the warrant offering, continuing their existing investment relationship with TScan Therapeutics.

What premium does TCRX's December 2024 warrant offering represent?

The offering represents a 37% premium to the last closing price and a 34% premium over the 10-day volume weighted average closing price of TScan's common stock.