Evelo Biosciences has recently made a significant announcement regarding a securities purchase agreement it has entered into. The company has successfully completed a private placement with investors, resulting in the sale of 11 million common shares at a price of $2.31 per share. This development has led to a positive surge in Evelo Biosciences shares, which have increased by 20% to reach $2.78.
Key Details of the Private Placement
In the past year, Evelo Biosciences’ stock has experienced a significant decline of 94%, and Friday’s session saw a further drop of 13%. However, the private placement has provided the company with a much-needed boost. The offering has generated proceeds of $25.5 million and has been led by Evelo’s founder, Flagship Pioneering, with participation from both new and existing investors.
Utilizing the Proceeds
Evelo Biosciences has outlined its intentions for the funds acquired through the private placement. The company plans to allocate the proceeds towards various purposes. Firstly, it aims to utilize the funds to support the readout of its Phase 2a trial of EDP2939, specifically in moderate psoriasis treatment. Furthermore, a portion of the funds, amounting to $5 million, will be allocated to pay off existing debt. Lastly, the remaining funds will be used for general corporate purposes.
The completion of the private placement is anticipated to occur on or around Tuesday, ensuring a swift process for investors involved.
Strategic Reverse Stock Split
On June 29th, Evelo Biosciences made an additional strategic decision involving a reverse stock split. The board approved a 1-for-20 reverse stock split for the company’s common stock. This move aims to increase the per-share price of Evelo Biosciences’ stock, enabling the company to meet the minimum per-share bid price requirement for continued listing on the Nasdaq Global Select Market.
For further information, contact Chris Wack.