On February 14, 2024 Cogent Biosciences, Inc. (Nasdaq: COGT), a biotechnology company focused on developing precision therapies for genetically defined diseases, reported it has entered into a securities purchase agreement for a private investment in public equity financing that is expected to result in gross proceeds of approximately $225 million to the Company, before deducting placement agent fees and offering expenses (Press release, Cogent Biosciences, FEB 14, 2024, View Source [SID1234640088]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

This financing was led by Commodore Capital and a large investment management firm and included participation from both new and existing investors, including Fairmount Funds, Redmile Group, Janus, TCGX, Adage Capital Partners LP, Venrock Healthcare Capital Partners, Deerfield and Perceptive Advisors.

J.P. Morgan Securities LLC, Jefferies LLC and Piper Sandler & Co. acted as placement agents.

"With this announcement, we put Cogent in an extremely strong financial position to move bezuclastinib rapidly through three ongoing registration-directed clinical trials and toward our ultimate goal of positioning it as the best-in-class KIT mutant inhibitor for patients living with systemic mastocytosis and gastrointestinal stromal tumors," said Andrew Robbins, President and Chief Executive Officer of Cogent Biosciences. "We are excited to describe our new clinical data update from Part 1b of the SUMMIT clinical trial in patients with Nonadvanced Systemic Mastocytosis at the annual American Academy of Asthma, Allergy and Immunology (AAAAI) meeting later this month."

Pursuant to the terms of the agreement, Cogent will sell 17 million shares of its common stock at a price of $7.50 per share, representing a premium of approximately 37% to its closing price on February 13, 2024, along with Series B non-voting convertible Preferred Stock (the "Series B Preferred Stock") convertible into approximately 13 million shares of its common stock to a select group of institutional and accredited healthcare specialist investors in an oversubscribed private placement pursuant to the terms of the securities purchase agreement. Subject to Cogent stockholder approval, each share of Series B Preferred Stock will automatically convert into 1,000 shares of common stock, subject to certain beneficial ownership limitations set by each holder. Cogent anticipates the gross proceeds from the private placement to be approximately $225 million, before deducting any offering-related expenses. The private placement is expected to close on or about February 16, 2024, subject to customary closing conditions.

Cogent intends to use the net proceeds from the proposed financing to fund research and development, activities relating to bezuclastinib and other product candidates, as well as for working capital and general corporate purposes. The proceeds from this financing, combined with current cash, cash equivalents and marketable securities, are expected to fund Cogent into 2027 and through all clinical readouts from SUMMIT, PEAK and APEX registration-directed trials.

The securities to be sold in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws. Concurrently with the execution of the securities purchase agreement, Cogent and the investors entered into a registration rights agreement pursuant to which Cogent has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the "SEC") registering the resale of the shares of common stock issued in the private placement and the shares of common stock issuable upon the conversion of the shares of Series B Preferred Stock issued in the private placement no later than the 45th day after the pricing of 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 offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Any offering of the securities under the resale registration statement will only be made by means of a prospectus.