Aileron Therapeutics Prices $40M Direct Offering Under Nasdaq Rules

Aileron Therapeutics, Inc., a biopharmaceutical company developing innovative medicines for orphan pulmonary and fibrosis diseases, has announced the pricing of an underwritten registered direct offering. This offering falls under Nasdaq rules and involves the sale of 4,273,505 shares of the company's common stock, along with warrants to purchase an equal number of shares. The combined public offering price for each share and accompanying warrant is set at $4.68.

The total expected gross proceeds from this offering are approximately $20 million. This figure is calculated before deducting underwriting discounts, commissions, and other expenses related to the offering. Additionally, if the warrants are exercised, the company could potentially receive another $20 million. The offering is anticipated to close around May 3, 2024, contingent on meeting standard closing conditions.

The attached warrants will have an exercise price matching the offering price of $4.68 per share, and they will be exercisable immediately upon issuance. These warrants will remain valid for three years from the date of issuance. There is a provision for Aileron to call the warrants for cancellation under specific conditions. This can occur within the ten trading days following thirty days after the public release of top-line results from the Phase 1b clinical trial of LTI-03, provided no drug-related adverse events have led to discontinuation. Aileron can issue this call notice only if the volume-weighted average price of its shares exceeds the exercise price of the warrants. Any unexercised warrants will be canceled ten trading days after the call notice for a nominal consideration of $0.001 per share.

Titan Partners Group, a division of American Capital Partners, is acting as the sole book-running manager for this offering. The securities are being offered under a shelf registration statement on Form S-3, which was previously filed with the SEC and became effective on June 16, 2022. The offering is being conducted solely through a prospectus supplement and the accompanying prospectus, which are part of the registration statement. A final prospectus supplement will be filed with the SEC and will be accessible via the SEC’s website.

Aileron Therapeutics is focused on advancing a pipeline of unique medicines aimed at addressing serious unmet needs in orphan pulmonary and fibrosis conditions. The company’s leading candidate, LTI-03, is a synthetic peptide with a dual mechanism of action. It targets alveolar epithelial cell survival and inhibits profibrotic signaling. LTI-03 is currently undergoing a Phase 1b clinical trial for idiopathic pulmonary fibrosis treatment. Another product candidate, LTI-01, is a proenzyme that has completed Phase 1b and Phase 2a clinical trials aimed at treating loculated pleural effusions. LTI-01 has received Orphan Drug Designation in both the US and the EU, and Fast Track Designation in the US.