A Cincinnati public company working to develop a universal flu vaccine is looking to raise millions in additional capital after its stock price has dropped nearly 90% over the last several days.
Blue Water Vaccines, a downtown-based biopharma company, announced Wednesday it has entered into definitive agreements with several unnamed institutional investors to purchase more than 1.18 million shares of common stock in a private placement priced “at-the-market” under Nasdaq rules.
The company will also issue to the investors unregistered preferred investment options to purchase up to an aggregate of 1.18 million shares.
The purchase price for one share of common stock and one investment option is $6.775. The investment options have an exercise price of $6.65 per share, will be exercisable immediately upon issuance and will have a term equal to four years following the issuance date.
A private placement is another means for a company to raise money from investors — and could help stabilize the company’s stock. Blue Water said the move is expected to raise about $8 million before deducting agent fees and other expenses.
The company said it intends to use the funds for research and development as well as for working capital and other general corporate purposes.
Blue Water Vaccines (Nasdaq: BWV) became Cincinnati’s newest public company when it launched a $20 million IPO, or initial public offering, in February — and with a huge initial splash.
It planned to sell more than 2.2 million shares at $9 per share on the Nasdaq capital market. It opened at $50 — more than 400% above that price — and had traded as high as $90.90.
But its stock price plummeted Thursday, opening at $59.02 and closing at $10.17, an 82.77% drop. Trading was paused multiple times during the day for volatility.
In the days since, Blue Water’s pricing has continued a steady decline. The stock closed Tuesday at $6.65, an 88.7% drop since last week.
Blue Water, founded in 2018 by CEO Joseph Hernandez, is developing several vaccine candidates, including one for influenza, a single-dose shot that would provide lifelong protection against all flu strains.
Blue Water also has a vaccine candidates for H1N1 and streptococcus pneumoniae, designed to specifically prevent middle ear infections, known as acute otitis media, or AOM, in children. The company holds rights to proprietary technology developed at the University of Oxford, Cincinnati Children’s Hospital and St. Jude.
New York-based financial firm H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.
The private placement is expected to close on or about April 18, subject to customary closing conditions.
