Compass derisks drug development with equity sale
Compass Therapeutics has secured an upsized US$120m from an overnight stock sale that will keep the developer of experimental cancer drugs funded through to 2028.
Jefferies, Piper Sandler and Guggenheim Securities firmed up support at a US$3 fixed price through an earlier wall-cross, enabling them to price an upsized offering of 40m shares versus a US$100m sum targeted at launch.
The offering was priced at a 5.4% discount to Tuesday's closing price of US$3.17.
The cancer drug developer's shares closed on Wednesday at US$3.10, or just above issue price.
Considering the relatively large size of the offering, nearly 20% of the outstanding, the banks allowed some existing shareholders purchasing non-voting prefunded warrants, representing 16.7% of the offering, instead of stock to better manage their holdings.
The warrants have the same economic value as common stock but carry no voting rights until they are exercised for a nominal sum, usually less than a penny a share.
Compass more than doubled its cash balance from US$101m at the end of June, versus four cancer drugs in various stages of development that require financing.
The most advanced candidate is undergoing Phase II/III trials in patients with advanced bile tract cancer.
In reporting second-quarter results on Monday, Compass said early results were showing better than expected survival rates ahead of the next data release early next year.
Compass has three other drugs in earlier stages of development, one in Phase I trials in patients with lung and breast cancer with a second drug in Phase II trials for treating solid tumours.
The third drug has shown effective tumour control in pre-clinical animal studies, with Phase I trials expected to begin next year.