Small Massachusetts biotech tries to beat back the bears with $55M PIPE
As the bear market continues to hold down biotechs of several shapes and sizes, one company is selling shares to extend its runway.
Boston-based X4 Pharmaceuticals announced Friday that it has agreed to sell over 50 million shares of common stock to certain investors in a PIPE financing. The company is anticipating that gross proceeds from the PIPE will be approximately $55 million and close on July 6, with a purchase set at $1.09.
On Thursday, X4 also changed its loan and security agreement with Hercules Capital to extend its loan facility by up to 12 months into 2024. This amendment results in a potential reduction of X4’s cash burn by $20 million over the interest-only period, the company said.
X4 expects to use the funds for clinical development and work on lead candidate mavorixafor, which is intended to treat a rare form of non-Hodgkin lymphoma known as Waldernström’s macroglobulinemia. The funds will also be used for working capital and other general uses.
The biotech’s new line of credit comes as it announced a deal with the Leukemia & Lymphoma Society (LLS) to develop mavorixafor in 2021, but also as it faces a huge pitfall in its stock price. X4 has recently been dipping into the penny stock range and has seen its price $XFOR plummet by over 60% since the beginning of the year.
Friday’s PIPE financing included new investors such as New Enterprise Associates (NEA), Acorn Bioventures and Lumira Ventures, as well as existing investors, including co-lead investor Bain Capital Life Sciences, OrbiMed, AXA Investment Managers and Hercules Capital.
