Orchestra BioMed (Nasdaq:OBIO) today announced the pricing of an underwritten public offering totaling proceeds of approximately $40 million.
New Hope, Pennsylvania-based Orchestra BioMed’s offering includes more than 9.4 million shares of common stock. The company priced the shares at $2.75 apiece. In lieu of common stock to certain investors, the offering includes pre-funded warrants to purchase more than 5.1 million shares at $2.7499 apiece.
Additionally, the company granted underwriters a 30-day option to purchase up to an additional 2.18 million shares. It expects the offering to close on Aug. 4, subject to customary closing conditions.
Orchestra BioMed plans to use proceeds to fund its atrioventricular interval modulation (AVIM) therapy program and the execution of its BACKBEAT study. It also aims to fund its Virtue sirolimus angioinfusion balloon program and a planned clinical trial. Other uses include future R&D or other additional product candidates, plus general purposes.
BTIG analysts Marie Thibault, Sam Eiber and Alexandra Pang note that the company also entered into new strategic partnerships. It partnered with Ligand Pharmaceuticals and Medtronic, simultaneously announcing the public offering.
With the Ligand deal, the company anticipates $20 million in funding at closing. Ligand also intends to purchase $5 million of Orchestra’s shares and the company may receive an additional $15 million upon future milestones at nine months post-transaction.
Medtronic already serves as a partner for the company’s AVIM therapy, but the analysts say they amended their partnership. It now includes a development plan to add AVIM therapy into a dual-chamber leadless pacemaker. Medtronic also committed an additional $30 million investment into Orchestra BioMed. That includes a $20 million loan agreement and a $10 million agreement to purchase common stock.
The analysts maintain a “Buy” rating for the company.
“We believe that these are the right steps and are pleased to see OBIO add Ligand Pharmaceuticals as a new strategic partner,” they wrote.
