WORCESTER, Mass. - Mustang Bio , Inc. (NASDAQ:MBIO), a biopharmaceutical company in the clinical stage, announced a registered direct offering and concurrent private placement of common stock and warrants expected to generate gross proceeds of approximately $2.5 million. The transaction is anticipated to close around June 21, 2024, with H.C. Wainwright & Co. serving as the exclusive placement agent.
The company will issue 6,130,000 shares of common stock or equivalents at $0.41 per share. In addition, in a private placement, Mustang Bio will issue unregistered warrants to purchase an equal number of shares. These warrants, exercisable at $0.41 per share, will become active upon stockholder approval and are set to expire five years from that date.
Mustang Bio intends to use the net proceeds for general corporate purposes and working capital. This offering follows a shelf registration statement filed with the Securities and Exchange Commission (SEC) on May 31, 2024, and declared effective on June 12, 2024. Details regarding the offering will be available in a final prospectus supplement filed with the SEC.
Mustang Bio focuses on developing cell therapies for hard-to-treat cancers, partnering with leading medical institutions in advancing CAR-T therapies. The company was founded by Fortress Biotech, Inc. (NASDAQ:FBIO).
This announcement is based on a press release statement.
In other recent news, Mustang Bio reported a high response rate in its Phase 1/2 clinical trial of MB-106, a CD20-targeted CAR T-cell therapy for a rare blood cancer called Waldenstrom macroglobulinemia. The trial data showed a 90% response rate among participants, with favorable safety outcomes. The development of MB-106 depends on securing additional funding or establishing strategic partnerships.
In related developments, H.C. Wainwright significantly increased its stock target for Fortress Biotech from $10.00 to $24.00, reflecting an optimistic outlook for the company. The firm anticipates significant regulatory milestones for Fortress's partners and aims to address the perceived undervaluation of the company's stock.
Fortress's financial strength is bolstered by equity stakes in several partner companies and potential revenue sharing from Priority Review Vouchers and anticipated royalties.
Roth/MKM maintained a Buy rating on Fortress Biotech stock, highlighting the company's 2023 revenue of $84.5 million, an increase from the $75.7 million reported in 2022. Despite a downward revision of the revenue outlook for 2024 to $88.9 million, the firm anticipates a significant revenue increase in 2025, driven by contributions from Journey Medical's DFD-29 and Checkpoint Therapeutics (NASDAQ:CKPT)' Cosibelimab.
These developments are expected to push Fortress Biotech's consolidated profit and loss cash flow into positive territory by 2026/2027.
InvestingPro Insights
Mustang Bio's parent company, Fortress Biotech Inc. (NASDAQ:FBIO), has been navigating challenging financial waters. According to InvestingPro data, Fortress Biotech has a market capitalization of $35.65 million, reflecting the size of the company in the current market. Despite a revenue growth of 32.48% in the last twelve months as of Q1 2024, the company's financial health is under scrutiny due to a negative gross profit margin of -39.14% in the same period, indicating costs of goods sold outstripping revenue. Additionally, the stock price has seen a significant decline, with a year-to-date price total return of -40.53%.
InvestingPro Tips suggest that while analysts predict Fortress Biotech will become profitable this year, the company is also quickly burning through cash and has been suffering from weak gross profit margins. This financial strain could have implications for subsidiaries like Mustang Bio, as it may affect the parent company's ability to support Mustang Bio's funding needs.
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