NEW YORK - Protara Therapeutics, Inc. (NASDAQ:TARA), a company focusing on the development of therapies for cancer and rare diseases, has announced a private placement financing deal that is expected to generate approximately $45 million in gross proceeds.
The transaction involves the sale of over 9 million shares of common stock and pre-funded warrants to purchase additional stock, along with accompanying common warrants, to institutional accredited investors.
The sale price for each share and its attached warrant is set at $4.15, while each pre-funded warrant, along with its attached common warrant, is priced at $4.149. The closing of the deal is anticipated to occur on April 10, 2024, pending the fulfillment of standard closing conditions.
Leading the offering are RA Capital Management and Acorn Bioventures, with participation from a mix of new and existing investors including Boxer Capital, Woodline Partners LP, Catalio Capital Management, StemPoint Capital, Armistice Capital, Velan Capital, and a healthcare fund.
In connection with the private placement, Protara has also agreed to provide certain registration rights for the resale of the common stock and the stock issuable upon exercising the pre-funded and common warrants. The resale of the pre-funded and common warrants will not be registered under the Securities Act of 1933.
Protara intends to utilize the net proceeds from this private placement for general corporate and working capital purposes. This includes funding clinical trials such as the addition of a new dose cohort and a systemic priming cohort to the ongoing ADVANCED-2 Phase 2 clinical trial of TARA-002, the company’s product candidate for treating high-risk Non-Muscle Invasive Bladder Cancer (NMIBC).
Guggenheim Securities, LLC served as the lead placement agent, with Oppenheimer & Co. also acting as a placement agent in the transaction. The common stock and pre-funded warrants issued in the private placement have not been registered under the Securities Act, or any state securities laws and are being offered under an exemption from registration requirements.
The company's financial outlook suggests that the proceeds from this private placement, combined with existing cash reserves, should be sufficient to fund operations into 2026.
This report is based on a press release statement from Protara Therapeutics.
InvestingPro Insights
Protara Therapeutics, Inc. (NASDAQ:TARA) has recently secured a significant private placement that promises to bolster its financial position and support its ongoing clinical trials. InvestingPro data sheds light on several financial metrics that could be of interest to investors monitoring the company's progress and financial health. As of the last twelve months of Q4 2023, Protara Therapeutics holds a market capitalization of $45.96 million and exhibits a price to book ratio of 0.67, suggesting that its stock is trading at less than the net asset value of the company. Despite a challenging financial performance with an operating income of -$43.61 million, the company’s stock has experienced a remarkable 139.29% price total return over the last six months.
InvestingPro Tips highlight a mix of strengths and concerns for Protara Therapeutics. The company holds more cash than debt, which is a positive indicator of financial stability, and its liquid assets exceed short-term obligations, providing some cushion for near-term financial needs. However, the company is quickly burning through cash and suffers from weak gross profit margins. Analysts are not optimistic about profitability in the near term, as net income is expected to drop this year, and the company does not pay dividends to shareholders. Moreover, the stock price has been quite volatile, which may be a point of caution for risk-averse investors. Despite these challenges, Protara has shown a strong return over the last three months, with a 93.27% price total return, which could attract investors looking for growth potential in their portfolios.
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