GAITHERSBURG, Md. - Cartesian Therapeutics, Inc. (NASDAQ: RNAC), a biotech firm specializing in mRNA cell therapy for autoimmune diseases, announced today it has secured a private investment in public equity (PIPE) financing deal expected to yield approximately $130 million in gross proceeds. The transaction is anticipated to close by Wednesday, subject to customary closing conditions.
The PIPE deal attracted a mix of new and existing investors, including HBM Healthcare Investments, Invus, Schooner Capital, Surveyor Capital, and prominent mutual fund managers. Cartesian Therapeutics is issuing over 3.5 million shares of common stock and nearly 3 million shares of Series B Non-Voting Convertible Preferred Stock, both priced at $20.00 per share.
The preferred stock can be converted into common stock pending stockholder approval and adhering to ownership limitations.
Funds from this financing round are earmarked for advancing the company's pipeline programs, which include Descartes-08, an mRNA CAR-T therapy currently in Phase 2b clinical trials for generalized myasthenia gravis, and Phase 2 for systemic lupus erythematosus. Additionally, Cartesian plans to allocate the proceeds for general corporate purposes and working capital.
Leerink Partners and TD Cowen take the lead as placement agents, with Needham & Company also engaged in the financing. The securities sold through this PIPE financing have not been registered under the Securities Act of 1933 and are subject to certain resale restrictions.
In conjunction with the PIPE agreement, Cartesian Therapeutics has agreed to file a registration statement with the SEC to permit the resale of the common stock underlying the preferred shares and the common stock sold in the PIPE financing.
This announcement follows Cartesian's recent progress in its clinical-stage pipeline, which also includes Descartes-15, an innovative anti-BCMA mRNA CAR-T therapy.
The information shared in this article is based on a press release statement from Cartesian Therapeutics, Inc.
In other recent news, Cartesian Therapeutics reported positive results from its Phase 2b trial of Descartes-08, a treatment for myasthenia gravis (MG). The company revealed that 71% of patients showed a significant improvement, compared to 25% for placebo. Cartesian also announced the commencement of a Phase 2 trial for Descartes-08 targeting systemic lupus erythematosus (SLE), with the first patient already dosed.
The U.S. Food and Drug Administration (FDA) awarded Cartesian's lead product candidate, Descartes-08, the Regenerative Medicine Advanced Therapy (RMAT) designation, which is expected to expedite the therapy's development. The company anticipates releasing topline results from its Phase 2b study mid-year.
In the realm of financial analysis, Mizuho Securities resumed coverage on Cartesian Therapeutics shares, assigning a Buy rating. The firm highlighted the potential of Cartesian's mRNA-based CAR-T technology in the treatment of autoimmune diseases. Mizuho also anticipates that the Phase 2b results of Descartes-08 in treating MG could spark wider interest in the company's stock.
InvestingPro Insights
As Cartesian Therapeutics, Inc. (NASDAQ: RNAC) embarks on a significant financing round to advance its mRNA cell therapy programs, investors are taking a closer look at the company's financial health and market performance. According to real-time data provided by InvestingPro, Cartesian Therapeutics currently holds a market capitalization of $431.91 million, reflecting the market's valuation of the company.
Investors should note that Cartesian Therapeutics does not pay a dividend, which is not uncommon for biotech firms focused on growth and reinvesting earnings into research and development. Moreover, the company's recent performance indicates a strong return over the last three months, with a price total return of 52.61%. This could signal growing investor optimism about the company's future prospects, particularly in light of the recent PIPE financing.
Nonetheless, it's important to consider that analysts do not expect Cartesian to be profitable this year, and the company has experienced a sales decline in the current year. Gross profit margins have also been weak, with the last twelve months as of Q1 2024 showing a gross profit margin of -118.3%. These metrics from InvestingPro suggest that while Cartesian is making strides in its clinical pipeline, it is still navigating the financial challenges typical of the biotech sector.
To gain a deeper understanding of Cartesian Therapeutics' financial situation and to access more InvestingPro Tips, investors can visit InvestingPro. There are 8 additional InvestingPro Tips available for Cartesian Therapeutics, which can provide further insights into the company's financial health and market performance. For those interested in a subscription, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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