SAN FRANCISCO, CA – Olema Pharmaceuticals, Inc. (NASDAQ:OLMA), a biopharmaceutical company focused on the discovery and development of targeted therapies for women’s cancers, disclosed an unregistered exchange of equity securities in a recent SEC filing. The transaction involves the exchange of common stock for pre-funded warrants with three significant investment entities.
According to the filing dated January 10, 2025, Olema entered into agreements with Bain Capital Life Sciences Opportunities IV, L.P., entities affiliated with Paradigm BioCapital International Fund Ltd., and entities affiliated with BVF Partners L.P.
Collectively, these entities will exchange a total of 6,070,000 shares of Olema's common stock for an equal number of pre-funded warrants to purchase the company's common stock. The company's strong cash position relative to debt provides financial flexibility for its ongoing operations, though InvestingPro data indicates rapid cash burn remains a concern.
The pre-funded warrants have an exercise price of $0.0001 per share, are exercisable immediately, and may be exercised at any point until fully utilized. A stipulation within the warrant agreement restricts each holder from exercising warrants that would result in ownership exceeding 9.99% of the outstanding common stock, although this threshold can be adjusted up to 19.99% with prior notice to the company.
This exchange is being conducted under Section 3(a)(9) of the Securities Act, which allows for the exchange of securities without registration if certain conditions are met. The closing of the exchange is expected to take place on January 13, 2025. Post-transaction, the estimated outstanding shares of Olema's common stock will be 68,333,065.
The transaction details are outlined in the form of Exchange Warrant, which is included as Exhibit 4.1 in the SEC filing. The company also included forward-looking statements cautioning that the actual number of outstanding shares post-exchange could vary due to market conditions and other factors.
Investors and interested parties can find additional details regarding the risks associated with such forward-looking statements in Olema's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. The company has stated it will not undertake any obligation to update these statements unless required by law.
In other recent news, Olema Pharmaceuticals has been the focus of several positive analyst ratings following updates on clinical study data and promising preclinical findings. H.C. Wainwright reaffirmed its Buy rating for Olema Pharmaceuticals, citing significant upside potential based on the updated clinical study data from the Phase 1b/2 study of palazestrant combined with ribociclib for treating metastatic breast cancer.
TD Cowen also reiterated a Buy rating, encouraged by the Clinical Benefit Rate from a Phase II trial involving palbociclib and ribociclib. Jefferies maintained a Buy rating as well, highlighting the potential of the company's KAT6 inhibitor, OP-3136, which showed superior in vivo efficacy compared to Pfizer (NYSE:PFE)'s competing KAT6 inhibitor.
In addition, Goldman Sachs (NYSE:GS) maintained its Buy rating on Olema Pharmaceuticals, following the presentation of preclinical data for OP-3136 at the EORTC-NCI-AACR Symposium. The studies demonstrated OP-3136's anti-tumor activity, showing further improvement when used with endocrine therapy and CDK4/6 inhibitors.
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