Innovate Biopharmaceuticals Announces Entry Into Securities Purchase Agreement to Fund Initiation of the First Phase 3 Celiac...
18 Marzo 2019 - 1:51PM
Innovate Biopharmaceuticals, Inc. (“Innovate” or the “Company”)
(Nasdaq: INNT), a clinical stage biotechnology company focused on
developing novel autoimmune and inflammation therapeutics,
announced that on March 17, 2019, it entered into an agreement (the
“Agreement”) with SDS Capital Partners II LLC and certain other
accredited investors (together, the “Purchasers”) providing for the
sale by the Company at a purchase price of $2.33 per share as
further described below of up to 4,291,845 shares (the “Shares”) of
its common stock (the “Common Stock”), up to 2,575,107
five-year term warrants with an exercise price as further described
below at a premium to the purchase price and up to 4,291,845
12-month term warrants at an exercise price of $4.00 (total of up
to 6,866,952 shares of Common Stock).
The Company intends to use the net proceeds from this
offering to fund initiation of the first Phase 3 clinical trial of
its lead program for celiac disease, INN-202, and for working
capital and general corporate purposes.
The 12 month warrants will be immediately exercisable at a
price of $4.00 per share for one year, and the five year warrants
will be exercisable beginning on the six month anniversary of their
issuance at a price equal to the greater of (a) 125% of the volume
weighted average price of the Common Stock for the 20 day period
prior to the closing date of the private placement and (b) the
closing price of the Common Stock immediately prior to the closing
date of the private placement. If the volume weighted average price
of our stock exceeds $5.25 for 10 consecutive days following their
issue dates, we will have the right to call the 12 month warrants
for cash exercise. The exercise prices of the warrants will be
subject to adjustment for, among other things, stock splits,
reverse splits, and similar capital transactions, and the warrant
holders will have certain rights on an as-exercised basis as
holders of Common Stock in the event of certain distributions and
fundamental transactions. The warrants will be exercisable on a
“cashless” basis only in certain circumstances.
The Agreement contains customary representations, warranties,
covenants, closing conditions and indemnification obligations. The
Agreement contains a 45 day prohibition on certain sales or
issuances of Common Stock or securities convertible or exchangeable
into Common Stock without the prior written consent of the
Purchasers, subject to certain exceptions. The Company has agreed
to file a registration statement for resale of the shares
underlying the warrants within 60 days of the date of the
Agreement.
The Shares are being issued pursuant to the Company’s shelf
registration statement declared effective by the Securities and
Exchange Commission on July 13, 2018 and a prospectus supplement
dated March 17, 2019 to the registration statement. The issuance of
the warrants is being made in reliance on the exemption provided by
Section 4(a)(2) of the Securities Act of 1933, as amended, for the
offer and sale of securities not involving a public offering and
Regulation D promulgated thereunder.
The closing of the sale of the Shares and the concurrent private
placement of warrants is expected to occur on March 18,
2018. There can be no assurance that we will close the
offering or the private placement, or with the respect to the
amount of proceeds to be received therefrom.
About Innovate Biopharmaceuticals, Inc. (Nasdaq:
INNT): Innovate is a clinical stage biotechnology company
focused on developing novel therapeutics for autoimmune and
inflammatory diseases. Innovate’s lead drug candidate, larazotide
acetate, has a mechanism of action that renormalizes the
dysfunctional intestinal barrier by decreasing intestinal
permeability and reducing antigen trafficking, such as gliadin
fragments in celiac disease, and bacterial toxins and immunogenic
antigens in nonalcoholic steatohepatitis (NASH). In several
diseases, including celiac disease, NASH, Crohn’s disease,
ulcerative colitis, irritable bowel syndrome (IBS), type 1 diabetes
mellitus (T1DM), chronic kidney disease (CKD), the intestinal
barrier is dysfunctional with increased permeability.
Forward Looking Statements This press release
includes forward-looking statements including, but not limited to,
statements related to the development of drug candidates, our
operations, business strategy, corporate updates and capital
raising activities. The forward-looking statements contained in
this press release are based on management’s current expectations
and are subject to substantial risks, uncertainty and changes in
circumstances. Actual results may differ materially from those
expressed by these expectations due to risks and uncertainties,
including, among others, those related to our ability to obtain
additional capital on favorable terms to us, or at all, including,
without limitation, to fund our current and future preclinical
studies and clinical trials and the success, timing and cost of our
drug development program and our ongoing or future preclinical
studies and clinical trials, including, without limitation, the
possibility of unfavorable new clinical and preclinical data and
additional analyses of existing data, as well as the risks that
prior clinical and preclinical results may not be replicated. These
risks and uncertainties include, but may not be limited to, those
described in our Quarterly Report on Form 10-Q filed with
the SEC on November 13, 2018, and in any subsequent
filings with the SEC. Forward-looking statements speak only as
of the date of this press release, and we undertake no obligation
to review or update any forward-looking statement except as may be
required by applicable law.
SOURCE: Innovate Biopharmaceuticals, Inc.
Contact: Jennifer K. Zimmons, Ph.D. Investor
Relations Tel: +1-917-214-3514 Email:
jzimmons@innovatebiopharma.com www.innovatebiopharma.com
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