BOSTON and LONDON – Akari Therapeutics Plc (NASDAQ:AKTX), a biotechnology company focused on autoimmune and inflammatory diseases, announced the initial closing of a private placement financing round, raising approximately $7.6 million. The capital inflow comes from a combination of new and existing investors, demonstrating confidence in Akari’s strategic direction and its upcoming merger with Peak Bio, which is expected to close in the third quarter of 2024.
The private placement, agreed on May 29, 2024, involved the sale of approximately 4.03 million unregistered American Depository Shares (ADS) and Series C Warrants to purchase an equivalent number of ADSs.
The warrants, which are valid for three years from the closing date, allow for cashless exercise and most of them have been set at an exercise price of $1.76 per ADS, matching the Nasdaq closing price on May 29 2024. However, the warrants issued to Akari President, Dr. Ray Prudo, and Interim President and CEO, Samir R. Patel, MD, are priced at $1.79 per ADS.
As of May 31, 2024, Akari has received approximately $7.2 million in gross proceeds and has issued warrants and ADSs accordingly. The remaining securities are expected to be sold within 90 days, pending payment. Paulson Investment Company LLC served as exclusive placement agent for the financing.
The securities sold in this private placement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption from registration requirements.
Akari’s lead product, nomacopan, is a bispecific recombinant inhibitor that targets complement C5 activation and leukotriene B4 (LTB4) activity. The company is also conducting preclinical research on long-acting PAS-nomacopan for geographic atrophy (GA).
This press release contains forward-looking statements, including expectations regarding the proceeds of the private placement and the merger with Peak Bio. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.
Investors should note that this news is based on a press release and should be evaluated in the context of market conditions and other factors.
In other recent news, Akari Therapeutics has seen a significant change in its executive team. Dr. Samir R. Patel has been named interim CEO, following the departure of the previous CEO and COO. The company also announced its merger with Peak Bio, which is expected to be completed by the third quarter of 2024. The merger aims to strengthen the development of therapies in oncology and inflammation.
Concurrently, Akari Therapeutics secured approximately $1.615 million through a private placement agreement with existing investors. The Company expects to file a registration statement on Form S-3 with the Securities and Exchange Commission by the end of March 2024, to facilitate the resale of the American Depository Shares acquired under the Purchase Agreement.
These recent developments, including the leadership transition, merger and private placement, are part of Akari’s strategic efforts to position itself for future growth and enhance shareholder value.
Insights from InvestingPro
Akari Therapeutics (NASDAQ:AKTX) recently made headlines with its private placement funding round, raising significant capital amid challenging market conditions. As investors consider the potential of this biotech company, certain metrics and recommendations from InvestingPro can provide a deeper understanding of the company’s financial health and stock performance.
From a financial perspective, Akari’s market capitalization stands at $13.39 million, indicating its size compared to its biotech peers. Notably, the company’s price-to-earnings (P/E) ratio is currently negative at -0.5, reflecting investor concerns about profitability. The adjusted P/E ratio for the trailing twelve months, as of the first quarter of 2024, is also in negative territory and stands at -0.81, further underlining the challenges the company faces in terms of earnings.
While Akari’s finances are showing signs of strain, with an operating loss of $18.2 million over the same period, the company’s balance sheet has a silver lining. A top tip from InvestingPro highlights that Akari holds more cash than debt, which could provide some financial flexibility in the near term. Despite the recent setbacks, the stock has performed strongly over the past month, with a total return of 24.26%.
Investors considering Akari Therapeutics should also note that analysts do not expect the company to be profitable this year, and that the stock has not been profitable in the last twelve months. Additionally, the company’s short-term obligations exceed its liquid assets, which could lead to liquidity problems.
For a more complete analysis of Akari Therapeutics, including a total of 11 InvestingPro recommendations, investors can visit InvestingPro. For those interested in an annual or semi-annual Pro and Pro+ subscription, please use the coupon code PRONEWS24 to receive an additional 10% discount.
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