A pharmaceutical company in the Triangle is raising funds to advance its clinical programs a few months after initiating a process to review the company's path forward.
Tenax Therapeutics (Nasdaq: TENX) on Friday announced the pricing of a public offering that's expected to total gross proceeds of about $15.6 million. Proceeds from the offering would support the launch of a phase 3 study that the company – which recently relocated from Morrisville to Chapel Hill – delayed last year as it began its strategic review process, which included the evaluation of a possible sale, merger or other transaction.
The offering includes more than 8.6 million shares priced at $1.80 per share and warrants to purchase up to about 17.3 million shares. The warrants can be exercised immediately at $2.25 per share, according to a statement from Tenax. The company expects the offering to close Tuesday.
The company's stock opened Tuesday at $1.63 a share and was trading around $1.51 by the afternoon.
Tenax didn't say how this offering affects its strategic review process and whether that process remains ongoing. A company spokesperson didn't return a request for comment.
California-based Roth Capital Partners is the company's exclusive placement agent in the offering. Tenax previously shared that Roth would serve as its financial advisor in the strategic review process.
The company plans to use the proceeds to support the clinical development of the drugs imatinib and levosimendan for the treatment of cardiovascular and pulmonary diseases. This includes launching a phase 3 trial this year of imatinib as a treatment for pulmonary arterial hypertension. Tenax planned to begin this study during the second half of last year, but announced it would delay the program after initiating its strategic review process.
That process began in September with Tenax announcing it was "evaluating alternative strategic paths focused on maximizing shareholder value." In a statement at the time, the company said it believed its valuation didn't accurately reflect the potential value of its drug pipeline.
Tenax had a market cap in September of around $5.77 million with its stock trading well below $1 per share. The company implemented a reverse stock split in January to regain Nasdaq compliance.
The company previously reported having cash and cash equivalents of $3.8 million as of Sept. 30.
In addition to supporting its clinical development efforts, the proceeds would provide the company with working capital and funding to support capital expenditures, product development and other general corporate purposes.
The company implemented certain cost-cutting measures after initiating its strategic review process. This includes reducing administrative expenses, delaying clinical trials and relocating the company's corporate headquarters from Morrisville to a shared office space in Chapel Hill.
