On March 29, 2019 Aileron Therapeutics (NASDAQ: ALRN), the clinical-stage leader in the field of stabilized cell-permeating peptides to treat cancer and other diseases, reported that it has entered into a securities purchase agreement with a group of institutional accredited investors for the private placement of $26 million of Aileron common stock and warrants (Press release, Aileron Therapeutics, MAR 29, 2019, View Source [SID1234534815]). The private placement is expected to close on or about April 2, 2019 subject to the satisfaction of customary closing conditions.
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The private placement was led by Satter Medical Technology Partners, L.P. with significant additional participation from Jennison Associates (on behalf of certain clients) and an undisclosed institutional investor, in addition to other new and existing investors.
The Company is selling in the private placement 11,838,582 units, consisting of 11,838,582 shares of common stock and associated warrants to purchase 11,838,582 shares of common stock, for a combined price of $2.01 per unit. In addition, the Company is also selling in the private placement 1,096,741 units, consisting of pre-funded warrants to purchase 1,096,741 shares of common stock and associated warrants to purchase 1,096,741 shares of common stock, for a combined price of $2.01 per unit.
William Blair & Company, L.L.C. will act as sole placement agent in connection with the financing.
Aileron expects to receive aggregate gross proceeds of approximately $26 million, before deducting placement agent fees and offering expenses, and excluding the exercise of any warrants. Aileron expects to use the net proceeds from the financing to fund the further advancement of its ALRN-6924 clinical trials and research programs, including its ongoing clinical trial collaboration with Pfizer testing ALRN-6924 in combination with palbociclib in MDM2-amplified cancers and its planned Phase 1b/2 clinical trial to evaluate ALRN-6924 as a myelopreservative agent, to protect against chemotherapy-induced toxicity. This use of proceeds reflects Aileron’s determination to cease enrollment and clinical development in AML/MDS in light of the Company’s resources and its assessment of the commercial opportunities, as well as the changed competitive landscape where seven drugs were approved for AML in the United States in the last two years.
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 applicable state securities laws, and accordingly may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Aileron has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of
common stock issued in the private placement and the shares of common stock issuable upon the exercise of the warrants issued in the private placement.
This 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.