On December 23, 2019 Idera Pharmaceuticals, Inc. (Nasdaq: IDRA), or the Company, reported entering into an agreement with funds affiliated with an institutional investor providing for a private placement exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to which Idera has sold shares of Series B1 convertible preferred stock and warrants to purchase common stock for aggregate gross proceeds of $3.9 million (Press release, Idera Pharmaceuticals, DEC 23, 2019, View Source [SID1234552581]). In connection with the agreement for the private placement, the investors in the private placement will pay Idera an upfront option fee of approximately $6.2 million. Under the agreement, Idera also agreed to sell to the investors, at their option and subject to certain conditions including stockholder approval to increase Idera’s authorized shares of common stock, shares of Series B2, Series B3 and Series B4 convertible preferred stock and warrants to purchase common stock for aggregate gross proceeds of up to an additional $87.6 million over a 21 month period after stockholder approval is received. The Company has the right to decline the Series B4 investment if its common stock trades at $7.60 for 20 days out of 30 days subsequent to the closing of the Series B3 investment.
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The transaction was priced at-the-market under the Nasdaq rules. The Series B1 convertible preferred stock and associated warrant had a combined purchase price on an as converted basis of $1.645. The warrants to purchase common stock have an exercise price of $1.52 per share and an exercise period commencing on issuance and a term of seven years.
The Company plans to use the proceeds from the financing primarily to fund the completion, of the ongoing ILLUMINATE-301 clinical trial of its lead product, tilsotolimod, for the treatment of anti-PD-1 refractory metastatic melanoma. The Company also plans to use the subsequent proceeds, if exercised, to fund the potential NDA filing and commercial launch of tilsotolimod along with the ongoing ILLUMINATE-206 trial, and for general corporate purposes.
The shares of convertible preferred stock and warrants sold in the private placement have not been registered under the Securities Act of 1933, as amended, or under any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Idera has granted the purchasers resale registration rights for purposes of registering the resale of the shares of common stock issuable upon conversion of the preferred shares and warrants issued in the private placement.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Tilsotolimod (IMO-2125)
Tilsotolimod is a TLR 9 agonist that received Fast Track Designation from the U.S. Food and Drug Administration (FDA) in 2017 for the treatment of anti-PD-1 refractory melanoma, in combination with ipilimumab as well as orphan drug designation from the FDA for the treatment of melanoma Stages IIb to IV. It signals the immune system to create and activate cancer-fighting cells (T-cells) to target solid tumors. Currently approved immuno-oncology treatments, specifically check-point inhibitors, provide benefit for some patients, but these therapies are limited in patients whose immune responses are missing or weak. Intratumoral injections with tilsotolimod are designed to selectively enable the tumor-specific T-cells to recognize and attack cancers that remained elusive and unrecognized by the immune system exposed to checkpoint inhibitors alone, while limiting toxicity or impact on healthy cells in the body.