CARLSBAD, Calif. - Lineage Cell Therapeutics (NYSE:LCTX), Inc. (NYSE American: LCTX), a biotech firm specializing in allogeneic cell therapies, has entered into definitive agreements for a registered direct offering, securing $30 million upfront with the potential for an additional $36 million upon the exercise of warrants. The agreements involve the sale of approximately 39.5 million common shares and accompanying warrants to certain healthcare-focused institutional investors and Broadwood Partners, L.P., an affiliate of Lineage board member Neal Bradsher.
The combined purchase price for each common share and corresponding warrant is set at $0.76. Warrants are exercisable at $0.91 per share, starting six months after issuance, and expiring on the earlier of three years after the exercise date or 90 days post-public disclosure of a phase 2 or 3 trial for OpRegen®. However, warrants issued to Broadwood will be exercisable later, either from the issuance date pending shareholder approval or six months after warrants are issued to other investors.
The offering to institutional investors is expected to close on or about November 21, 2024, contingent upon customary closing conditions. The closure of the offering to Broadwood is subject to obtaining shareholder approval in compliance with NYSE American rules and similar conditions.
Lineage anticipates approximately $24 million in gross proceeds from institutional investors and $6 million from Broadwood, before placement agent fees and offering expenses. If all warrants are exercised for cash, the gross proceeds could reach an additional $36 million. The net proceeds are intended for general corporate purposes, including working capital, research, and development.
The securities are offered pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) on March 7, 2024, and declared effective on May 14, 2024. H.C. Wainwright & Co. is the exclusive placement agent for the offering.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale in jurisdictions where such offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such jurisdiction.
The information in this article is based on a press release statement from Lineage Cell Therapeutics, Inc.
In other recent news, Lineage Cell Therapeutics, a clinical-stage biotechnology firm, has seen significant developments. Boral (OTC:BOALY) Capital, an independent analyst firm, has given a Buy rating to the company's stock, setting a price target at $3.00. This endorsement comes in light of the company's innovative approach to cell therapies for degenerative diseases and its promising potential in the biotechnology field.
Lineage Cell Therapeutics has reported a solid Q3 performance, with advancements in the OpRegen and OPC1 clinical programs, and significant developments in manufacturing capabilities for cell therapies. The company's Q3 financials revealed $32.7 million in cash, $3.8 million in revenue, and a reduced net loss to $3 million.
The company is also making strides with the FDA regarding the OPC1 program for spinal cord injuries and expects IND amendment review completion for OPC1 in Q1 2025. A partnership with Genentech on the OpRegen program for dry AMD (NASDAQ:AMD) indicates increased investment and commitment. Lineage Cell Therapeutics aims to demonstrate scalable GMP material production within the next year.
Despite some communication challenges with the FDA, the company remains optimistic about the future trajectory and potential validation of their technology through ongoing studies. The success of OpRegen could accelerate the development of other pipeline programs, including ReSonance. These are the recent developments from Lineage Cell Therapeutics.
InvestingPro Insights
Lineage Cell Therapeutics' recent $30 million registered direct offering comes at a crucial time for the company, as revealed by InvestingPro data. The company's revenue for the last twelve months as of Q3 2024 stood at $8.72 million, with a slight decline of 0.6% over the same period. This cash infusion could provide a much-needed boost to the company's operations and research initiatives.
InvestingPro Tips highlight that analysts anticipate a sales decline in the current year, which aligns with the company's decision to raise capital through this offering. Additionally, the tip indicating that Lineage Cell Therapeutics is not expected to be profitable this year underscores the importance of this funding for sustaining its research and development efforts.
On a positive note, another InvestingPro Tip reveals that the company's liquid assets exceed its short-term obligations, suggesting a relatively stable financial position despite the challenges. This could provide some reassurance to investors participating in the offering.
For readers interested in a more comprehensive analysis, InvestingPro offers 7 additional tips for Lineage Cell Therapeutics, providing a deeper understanding of the company's financial health and market position.
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