Aileron Therapeutics Closes $40 Million Direct Offering

Aileron Therapeutics, Inc. (NASDAQ: ALRN), a biopharmaceutical company focused on developing first-in-class medicines for unmet medical needs in orphan pulmonary and fibrosis indications, has successfully closed its previously announced underwritten registered direct offering. The offering, which adheres to Nasdaq rules, involved the sale of 4,273,505 shares of common stock and accompanying warrants to purchase an equal number of shares. Each unit, consisting of one share of common stock and one warrant, was sold at a public offering price of $4.68 per unit.

The total gross proceeds from this transaction amounted to approximately $20 million. However, this figure does not account for underwriting discounts, commissions, and other related expenses payable by Aileron. Additionally, it excludes any future proceeds that might be derived from the exercise of the accompanying three-year warrants. These warrants have an exercise price of $4.68 per share, are exercisable immediately, and expire three years from their issuance date.

Aileron has the option to call the warrants for cancellation within a designated ten trading day period, starting thirty days post-announcement of the top-line results from their Phase 1b clinical trial of LTI-03 in patients with idiopathic pulmonary fibrosis. This is contingent on the condition that the announcement confirms the absence of drug-related adverse events leading to trial discontinuation. The company can only make this call if the volume-weighted average price of its shares surpasses the exercise price of the warrants on the trading day immediately before the call notice. Warrants not exercised within the ten trading day period after the call notice will be cancelled for $0.001 per warrant share.

Titan Partners Group, a division of American Capital Partners, acted as the sole book-running manager for this offering. The securities were offered under a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (SEC) on June 16, 2022. The offering was conducted only through a prospectus supplement and the accompanying prospectus, which are part of the registration statement. The final prospectus supplement related to the offering was filed with the SEC and is available for free on the SEC’s website.

Aileron Therapeutics specializes in developing innovative therapies for severe diseases with high unmet medical needs. The company's lead product candidate, LTI-03, is a synthetic peptide with dual mechanisms aimed at enhancing alveolar epithelial cell survival and inhibiting profibrotic signaling. Currently, LTI-03 is in a Phase 1b clinical trial for idiopathic pulmonary fibrosis. Another promising candidate, LTI-01, has completed Phase 1b and Phase 2a clinical trials for loculated pleural effusions and has received Orphan Drug Designation in both the US and EU, as well as Fast Track Designation in the US.

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