BOSTON and LONDON - Akari Therapeutics Plc (NASDAQ:AKTX), a biotech firm focused on autoimmune and inflammatory diseases, has announced the initial close of a private placement financing round, raising approximately $7.6 million. This capital influx comes from a combination of new and existing investors, reflecting confidence in Akari's strategic direction and its upcoming merger with Peak Bio, anticipated to finalize in the third quarter of 2024.
The private placement, agreed upon on May 29, 2024, involved the sale of approximately 4.03 million unregistered American Depository Shares (ADSs) and Series C Warrants to purchase an equivalent number of ADSs.
The warrants, valid for three years from the closing date, allow for cashless exercise, with most set at an exercise price of $1.76 per ADS, matching the Nasdaq closing price on May 29, 2024. However, warrants issued to Akari's Chairman Dr. Ray Prudo and Interim President and CEO Samir R. Patel, MD, are priced at $1.79 per ADS.
As of May 31, 2024, Akari received around $7.2 million in gross proceeds and issued warrants and ADSs accordingly. The remaining securities are expected to be sold within 90 days, pending payment. Paulson Investment Company LLC served as the exclusive placement agent for the financing.
The securities sold in this private placement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Akari's lead product, nomacopan, is a bispecific recombinant inhibitor targeting complement C5 activation and leukotriene B4 (LTB4) activity. The company is also conducting pre-clinical research on long-acting PAS-nomacopan for geographic atrophy (GA).
This press release statement contains forward-looking statements, including expectations regarding the private placement's proceeds and the merger with Peak Bio. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
Investors are reminded that this news is based on a press release statement and should be evaluated in the context of market conditions and other factors.
In other recent news, Akari Therapeutics witnessed a significant change in its executive team. Dr. Samir R. Patel was appointed as the interim CEO, following the departure of prior CEO and COO. The company also announced a merger with Peak Bio, which is expected to complete by the third quarter of 2024. The merger aims to strengthen the development of therapies in oncology and inflammation.
Simultaneously, Akari Therapeutics secured approximately $1.615 million through a private placement agreement with select current investors. The company plans to file a registration statement on Form S-3 with the Securities and Exchange Commission by the end of March 2024, facilitating the resale of the American Depository Shares acquired under the Purchase Agreement.
These recent developments, including the leadership transition, merger, and private placement, are part of Akari's strategic efforts to position itself for future growth and enhance shareholder value.
InvestingPro Insights
Akari Therapeutics (NASDAQ:AKTX) has recently made headlines with its private placement financing round, raising substantial capital amid challenging market conditions. As investors consider the potential of this biotech firm, certain metrics and InvestingPro Tips can provide a deeper understanding of the company's financial health and stock performance.
From a financial standpoint, Akari's market capitalization stands at $13.39 million, indicating its size relative to peers in the biotech sector. Notably, the company's price-to-earnings (P/E) ratio is currently negative at -0.5, reflecting investor concerns about profitability. The adjusted P/E ratio for the last twelve months as of Q1 2024 is also in the negative territory at -0.81, further underscoring the earnings challenges the company faces.
While Akari's financials show signs of strain, with an operating loss of $18.2 million in the same period, there are silver linings in the company's balance sheet. An important InvestingPro Tip highlights that Akari holds more cash than debt, which could provide some financial flexibility in the near term. Despite recent setbacks, the stock has experienced a strong return over the last month, with a 24.26% price total return.
Investors considering Akari Therapeutics should also note that analysts do not anticipate the company will be profitable this year, and the stock has not been profitable over the last twelve months. Moreover, the company's short-term obligations exceed its liquid assets, which could present liquidity challenges.
To gain a more comprehensive analysis of Akari Therapeutics, including a total of 11 InvestingPro Tips, investors may visit InvestingPro. For those interested in an annual or biannual Pro and Pro+ subscription, use the coupon code PRONEWS24 to receive an additional 10% off.
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