On June 26, 2023 Orchard Therapeutics (Nasdaq: ORTX), a global gene therapy leader, reported that it has completed the second closing of its previously announced securities purchase agreement, resulting in $34 million of new capital before placement agent and transaction fees (Press release, Orchard Theraputics, JUN 26, 2023, View Source [SID1234632905]).

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In March 2023, the company completed the first closing of an innovative financing arrangement, led by RA Capital Management with participation from other leading healthcare investors that resulted in $34 million of new capital before placement agent and transaction fees. Per the terms of the agreement, the company could bring in an aggregate of up to $188 million (inclusive of the $68 million raised at the first and second closings) at increasing valuations following the achievement of certain U.S. regulatory milestones for OTL-200 for MLD. The conditions of the second closing included shareholder approval and the company’s intention to initiate a biologics license application (BLA) submission following receipt of minutes from a productive pre-BLA meeting with the U.S. Food and Drug Administration for OTL-200, both of which have been achieved. The second closing comprises the sale of units at a purchase price of $8.00 per unit for aggregate proceeds of $34 million, including the issuance of 4.25 million American Depository Shares (ADSs) as well as warrants.

"The initiation of our BLA submission marks a significant de-risking event for Orchard and our OTL-200 program ahead of a potential U.S. approval in MLD," said Frank Thomas, president and chief operating officer of Orchard Therapeutics. "This next wave of funding from the second closing is expected to provide important capital to support preparations for our anticipated first U.S. launch and advance our next-in-line neurometabolic programs derived from our HSC gene therapy platform. We want to thank each of the participating investors for supporting this unique and innovative structure and partnering with us to develop a standout company in the field of gene therapy."

Guggenheim Securities, LLC acted as the sole placement agent for the private placement.

Orchard intends to use the net proceeds from the offering to support its growing commercial capabilities for Libmeldy, prepare for a potential U.S. approval for OTL-200 and advance its HSC gene therapy portfolio. The company expects that its existing cash, cash equivalents and investments, inclusive of the proceeds from the second closing, will fund its anticipated operating, debt service and capital expenditure requirements into mid-2025, with the potential for additional runway extension pending the exercise of the warrants issued as part of the financing.

The securities were sold in a private placement and have not been registered under the Securities Act of 1933, as amended (Securities Act), and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. The Company has agreed to file a resale registration statement with the U.S. Securities and Exchange Commission (SEC), for purposes of registering the resale of the ordinary shares issued or issuable in connection with the offering.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be by means of a prospectus.