Trevena Announces the Closing of $4 Million Concurrent Private Placement and Warrant Exercise
- None.
- None.
Insights
From a financial perspective, the recent capital raising activities by Trevena, Inc. are indicative of a strategic move to bolster its working capital and ensure sufficient funds for general corporate purposes. The issuance of common stock and warrants is a common practice for biopharmaceutical companies seeking to finance their operations without incurring debt. The aggregate gross proceeds of approximately $4 million, before fees and expenses, is a modest sum for the industry, suggesting that Trevena is likely focusing on near-term financial obligations rather than expansive growth initiatives.
Investors should note the potential dilutive effect of such offerings on existing shareholders. However, the exercise price of $0.70 per share for both the newly issued and the existing warrants is a critical figure. It reflects the market's valuation of the company at the time of the offering and provides a benchmark for future stock performance. The five-year expiration on the new warrants also indicates a long-term commitment from warrant holders, which could be perceived as a vote of confidence in the company's prospects.
Lastly, the potential to satisfy the conditions for a $10 million tranche under the Loan Agreement with R-Bridge Healthcare Investment Advisory is significant. It suggests that Trevena is actively managing its capital structure and is poised to secure more substantial funding, contingent on meeting certain conditions. The timing and receipt of this tranche will be a critical factor for the company's financial health and operational runway.
Biopharmaceutical companies like Trevena are heavily reliant on capital to fund research and development, particularly in the central nervous system (CNS) therapeutic area. The CNS market is highly competitive and capital-intensive, with long development cycles and significant regulatory hurdles. Trevena's decision to raise capital through a private placement and induced warrant exercise is a strategic maneuver to maintain momentum in its R&D efforts without the immediate pressure of revenue generation.
The focus on general corporate and working capital purposes indicates a need to maintain liquidity, which is crucial for a biopharmaceutical firm's survival, especially one that is pre-revenue or in the early stages of commercializing its products. The use of proceeds for these purposes may reassure investors that the company is taking steps to fortify its financial position in the short-term.
Furthermore, the partnership with H.C. Wainwright & Co. as the exclusive placement agent for the offerings underlines the importance of leveraging industry expertise in executing such financial operations. Their role likely contributed to the structuring and pricing of the offerings, which is essential for maximizing capital efficiency and minimizing shareholder dilution.
The securities sold in the private placement and the subsequent warrant exercise are subject to complex securities laws, specifically Section 4(a)(2) of the Securities Act of 1933 and Regulation D. These provisions allow for the sale of securities without public registration, provided they are offered to accredited investors. This approach can be faster and less costly than a public offering, but it limits the pool of potential investors and involves certain trade-offs, such as the lack of liquidity for the securities sold.
The commitment by Trevena to file registration statements for the resale of the unregistered securities is a critical legal step that will eventually provide liquidity to the investors by allowing them to sell their holdings in the open market. However, the timing of these filings and the effectiveness of the registration statements are subject to SEC review and approval, introducing a layer of regulatory uncertainty.
It is also important to recognize the legal implications of the induced warrant exercise, which involves a reduced exercise price and the issuance of new warrants. This strategy can be advantageous for the company in terms of immediate cash inflow but requires careful legal structuring to ensure compliance with existing agreements and securities regulations.
CHESTERBROOK, Pa., Dec. 28, 2023 (GLOBE NEWSWIRE) -- Trevena, Inc. (“Trevena” or the “Company”) (Nasdaq: TRVN), a biopharmaceutical company focused on the development and commercialization of novel medicines for patients with central nervous system (CNS) disorders, today announced that it has closed its previously announced offering for the issuance and sale of 2,779,906 shares of common stock (or pre-funded warrants in lieu thereof) of Trevena and warrants to purchase up to an aggregate of 2,779,906 shares of common stock of Trevena, at a purchase price of
Pursuant to a previously announced definitive agreement with respect to the immediate exercise for cash of certain existing warrants to purchase up to an aggregate of 2,934,380 shares of common stock issued in July 2022 and November 2022, the holder of such warrants exercised such warrants for cash at a reduced exercise price of
The warrants issued in the offerings have an exercise price of
H.C. Wainwright & Co. acted as the exclusive placement agent for the offerings.
The aggregate gross proceeds to the Company from the offerings were approximately
The securities sold in the private placement and the new warrants sold in the induced warrant exercise described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”) and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants sold in the offerings, have not been registered under the Act or applicable state securities laws. Accordingly, such securities may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The securities were offered only to “accredited investors” as such term is defined under Rule 501(a) of the Act. Pursuant to a registration rights agreement, the Company has agreed to file one or more registration statements with the SEC covering the resale of the unregistered securities issued in the private placement and the new warrants issued in the induced warrant exercise.
This press release shall not constitute an offer to sell or the 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 Trevena
Trevena, Inc. is a biopharmaceutical company focused on the development and commercialization of innovative medicines for patients with CNS disorders. The Company has one approved product in the United States, OLINVYK® (oliceridine) injection, indicated in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate. The Company’s novel pipeline is based on Nobel Prize winning research and includes three differentiated investigational drug candidates: TRV045 for diabetic neuropathic pain and epilepsy, TRV250 for the acute treatment of migraine and TRV734 for maintenance treatment of opioid use disorder.
For more information, please visit www.Trevena.com.
Cautionary Note Regarding Forward-Looking Information:
Any statements in this press release about the use of the net proceeds of the offerings, the filing of a registration statement by Trevena with the SEC covering the resale of the unregistered securities issued in the offerings, obtaining stockholder approval for the issuance of the shares of common stock issuable upon the exercise of the warrants, receiving the Tranche, future expectations, plans and prospects for the Company, including statements about the Company’s strategy, future operations, clinical development and trials of its therapeutic candidates, plans for potential future product candidates, commercialization of approved drug products and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “objective,” “predict,” “project,” “suggest,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “ongoing,” or the negative of these terms or similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, without limitation: obtaining stockholder approval for the issuance of the shares of common stock issuable upon the exercise of the warrants, the receipt of the Tranche under the Loan Agreement, continued economic and market stability, market and other conditions and other factors discussed in the Risk Factors set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC and in other filings the Company makes with the SEC from time to time. In addition, the forward-looking statements included in this press release represent the Company’s views only as of the date hereof. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, except as may be required by law.
For more information, please contact:
Investor Contact:
Dan Ferry
Managing Director
LifeSci Advisors, LLC
daniel@lifesciadvisors.com
(617) 430-7576
Company Contact:
Bob Yoder
SVP and Chief Commercial Officer
Trevena, Inc.
(610) 354-8840
FAQ
What did Trevena, Inc. (TRVN) announce?
How many shares of common stock were issued in the private placement?
What is the purchase price per share in the private placement?
Who acted as the exclusive placement agent for the offerings?
How does Trevena, Inc. (TRVN) intend to use the net proceeds from the offerings?
