H.C. Wainwright has adjusted its outlook on Inhibikase Therapeutics Inc (NASDAQ: IKT), reducing the price target to $5.00 from the previous $15.00, while continuing to recommend the stock as a Buy.
The revision follows the company's October 9 announcement of a significant private placement aimed at raising approximately $110 million before deducting placement agent fees and other offering expenses.
The financing involves the sale of 58,310,000 shares of Inhibikase Therapeutics' common stock and, for certain investors, pre-funded warrants to purchase up to 21,985,000 shares. Additionally, the deal includes Series A-1 warrants to purchase 40,139,474 shares and Series B-1 warrants to purchase 73,813,529 shares. The securities are being sold at a combined price of $1.37 per share and accompanying warrant.
Inhibikase Therapeutics plans to use the net proceeds from this private investment in public equity (PIPE) to fund the initiation of a Phase 2b trial of IkT-001Pro for the treatment of pulmonary arterial hypertension (PAH) and for general corporate purposes. The closing of the PIPE is scheduled for October 21, 2024.
In other recent news, Inhibikase Therapeutics has announced a private placement financing valued at approximately $110 million, led by Soleus Capital and other investors. The funds will boost the initiation of a Phase 2b trial in pulmonary arterial hypertension (PAH) and underpin general corporate functions.
The company is offering shares of common stock and pre-funded warrants, with the transaction expected to close subject to standard conditions. In conjunction with the financing, board changes are set to occur with four new directors joining.
On the earnings front, Inhibikase reported a net loss of $5.0 million for the second quarter. Despite this, the company managed to raise $4 million in May, extending its cash runway to December 2024. H.C. Wainwright adjusted its full-year 2024 earnings per share (EPS) forecast for Inhibikase to ($2.75), a decrease from the prior estimate.
In other developments, Inhibikase has completed enrollment for its Phase 2 trial of risvodetinib for Parkinson's disease, with top-line data expected soon. An Investigational New Drug (IND) application for a Pro drug formulation of imatinib mesylate for PAH has also been filed, with clinical development set to begin later this year.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Inhibikase Therapeutics' financial position and market performance. The company's market capitalization stands at $10.97 million, reflecting its current valuation in the market.
InvestingPro Tips highlight that Inhibikase holds more cash than debt on its balance sheet, which aligns with the company's recent efforts to raise capital through the private placement. This financial strategy could provide the necessary funds for the planned Phase 2b trial of IkT-001Pro.
Additionally, InvestingPro data shows a significant return of 56.18% over the last year, and a 24.58% return in the past month, indicating recent positive market sentiment. This upward trend in stock performance may be influenced by investor expectations surrounding the company's development pipeline and the recent capital raise.
However, it's important to note that Inhibikase is quickly burning through cash and is not profitable over the last twelve months, as pointed out by InvestingPro Tips. This context underscores the importance of the recent $110 million private placement in supporting the company's ongoing operations and research initiatives.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Inhibikase Therapeutics, providing a deeper understanding of the company's financial health and market position.
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