Clene Inc. (NASDAQ:CLNN), a pharmaceutical company, announced on Monday an amendment to its loan agreement with Avenue Venture Opportunities Fund, L.P., as well as a restatement of a related warrant. The modification, effective today, reduces the principal payment due on October 1, 2024, from $3.33 million to $2 million. Additionally, the company may enter an interest-only period starting November 1, 2024, through December 31, 2024, contingent upon meeting specific funding milestones.
The interest-only period is subject to Clene Inc. securing at least $10 million from equity sales by October 31, 2024, including at least $7 million from an agreement made prior to the amendment date. The company's recent equity offering closed today is expected to fulfill part of this condition.
Further adjustments depend on Clene Inc.'s progress with the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for CNM-Au8, a potential ALS treatment. If the FDA accepts the NDA submission without objection and the company meets other conditions, monthly principal payments of $500,000 will commence after the interest-only period until February 28, 2025, followed by four equal monthly installments to fully amortize the loan. If the NDA milestone is not met, the loan will be fully amortized over four months starting after the interest-only period.
The amendment also adjusts the exercise price of a warrant issued to Avenue from $16.00 to $4.6014 per share, affecting 150,000 shares of Clene Inc. common stock. Other material terms of the loan and the warrant remain unchanged from previous reports filed with the SEC.
In other recent news, Clene Inc. has secured around $7.3 million through stock and warrant sales, as part of a securities purchase agreement with a healthcare-focused institutional investor and private placements with existing stockholders and company insiders. The proceeds are expected to support the clinical development of CNM-Au8®, Clene's drug candidate for neurological diseases like ALS and MS. In addition, Clene Inc. is set to discuss the development of this drug with the FDA, following the compilation of over 700 patient-years of safety data.
The company received a Buy rating from EF Hutton and H.C. Wainwright, with price targets set at $23.00 and $31.00 respectively. Furthermore, Clene Inc. implemented a 1-for-20 reverse stock split, reducing the common stock from roughly 128.7 million shares to approximately 6.4 million shares.
Recent developments also include promising results from Phase 2 clinical trials of CNM-Au8 for treating ALS and Rett Syndrome. The company's ongoing efforts in addressing unmet medical needs in neurodegenerative diseases are reflected in these advancements.
InvestingPro Insights
Recent InvestingPro data provides additional context to Clene Inc.'s (NASDAQ:CLNN) financial situation and strategic decisions. The company's market capitalization stands at $29.63 million, reflecting its current valuation in the pharmaceutical sector. Clene's revenue for the last twelve months as of Q2 2024 was $0.44 million, with a significant revenue decline of 43.62% over the same period.
Two key InvestingPro Tips are particularly relevant to the recent loan amendment and warrant restatement. Firstly, Clene is "quickly burning through cash," which aligns with the company's efforts to restructure its debt obligations and potentially secure additional funding. Secondly, the company is "not profitable over the last twelve months," underscoring the importance of the modified loan terms in managing its financial resources.
These insights highlight the challenges Clene faces as it progresses with its pharmaceutical development program, particularly for CNM-Au8. The loan amendment and the pursuit of additional equity funding appear to be strategic moves to extend the company's runway as it awaits FDA decisions on its NDA submission.
Investors seeking a more comprehensive analysis can access 6 additional InvestingPro Tips for Clene Inc., providing a deeper understanding of the company's financial health and market position.
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