RedHill Biopharma’s shares took a hit, dropping 21% to $1.46, after the company announced definitive agreements with institutional investors for the purchase and sale of 1.3 million American Depositary Shares (ADS) at $1.35 per ADS in a registered direct offering.
Stock Performance and Agreement Details
The company’s stock had already hit a 52-week low of $1.16 on July 11, and it has seen a significant decline of 96% over the past 12 months.
In addition to the direct offering, RedHill Biopharma also entered into a definitive agreement with a holder of its existing Class A warrants. This agreement allows the holder to exercise its warrants at a reduced exercise price of $1.35 per ADS, in exchange for new warrants.
Expected Closing and Proceeds
The closing of the offering and warrant exercises is anticipated to take place on or about Tuesday. The company expects to generate approximately $3.8 million in proceeds from these transactions.
Utilization of Proceeds
RedHill Biopharma plans to allocate the proceeds to areas such as general working capital, acquisitions, research and development, and general corporate purposes.
Additional Development Funding for Opaganib
In separate news, the company’s opaganib has received an additional $1.7 million in U.S. government funding. The funding was awarded through a Small Business Innovation Research grant to RedHill Biopharma’s development partner, Apogee Biotechnology. This announcement led to a brief increase in the company’s stock by up to 10% during premarket trading.