CAMBRIDGE, Mass. - Leap Therapeutics, Inc. (NASDAQ:LPTX), a company specializing in the development of immuno-oncology therapeutics, has announced a private placement transaction with institutional investors, securing approximately $40 million. The transaction is set to close on April 15, 2024, contingent on customary closing conditions.
The biotech firm will issue over 12 million shares at $2.82 each and pre-funded warrants for an additional 1.5 million shares at $2.819 each. Gilead Sciences, Inc. (NASDAQ:GILD), among other new and existing investors like Samsara BioCapital and Rock Springs Capital, participated in this round of funding.
J.P. Morgan served as the exclusive placement agent for the deal, which adheres to Nasdaq's "Minimum Price" requirement. The company's shares and pre-funded warrants, including shares issued upon exercising the warrants, have not been registered under the Securities Act of 1933 and, as such, cannot be offered or sold without registration or an exemption.
The capital raised, combined with Leap's current assets, is expected to extend the company's operational runway into the second quarter of 2026. The funds are earmarked for the expansion of the DKN-01 DeFianCe clinical trial in colorectal cancer and other studies, as well as for general corporate purposes.
Leap's leading clinical candidate, DKN-01, is a monoclonal antibody targeting the DKK1 protein, being tested in various cancers. The financial infusion is anticipated to enable the expansion of the DeFianCe study and support the company's progression towards Phase 3 readiness.
This private placement follows Leap's ongoing efforts to advance its clinical programs and expand its therapeutic pipeline. The company's strategic moves and clinical developments are routinely disclosed through public filings with the SEC and are accessible via EDGAR or the company's investor relations website.
This news is based on a press release statement from Leap Therapeutics, Inc.
InvestingPro Insights
As Leap Therapeutics, Inc. (NASDAQ:LPTX) looks to strengthen its financial position through a significant private placement, investors are paying close attention to the company's balance sheet and growth prospects. According to InvestingPro data, Leap Therapeutics holds a market capitalization of $77.82 million, which reflects the market's current valuation of the company.
The company's financial health is a mix of strength and caution. One of the key InvestingPro Tips highlights that Leap Therapeutics holds more cash than debt, which is reassuring for investors concerned about the company's liquidity. Additionally, the firm's liquid assets exceed its short-term obligations, providing a buffer for near-term financial challenges.
However, there are areas that require investor attention. The company is quickly burning through cash and has been marked by weak gross profit margins. Moreover, Leap Therapeutics has not been profitable over the last twelve months, and analysts do not anticipate the company will turn a profit this year. This is further reflected in the company's negative earnings per share (EPS), with both basic and diluted EPS for the last twelve months as of Q4 2023 standing at -$3.98.
Despite these challenges, the company has experienced a large price uptick over the last six months, with a 63.29% total return, indicating a growing investor confidence or speculative interest in its future prospects. This could be linked to the potential of its clinical candidate DKN-01 and the recent capital infusion aimed at expanding clinical trials.
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