NeuroBo Pharmaceuticals Announces $70M Private Placement and Direct Offering

NeuroBo Pharmaceuticals, Inc., a clinical-stage biotechnology company based in Cambridge, Massachusetts, has recently made significant strides in its efforts to advance treatments for cardiometabolic diseases. On June 24, 2024, NeuroBo announced the completion of definitive agreements to issue and sell a substantial quantity of its common stock through private and public placements, expected to generate considerable funding for the company's ongoing projects.

The private placement involves the issuance and sale of 4,325,701 shares of NeuroBo's common stock (or pre-funded warrants in place of common stock) at a price of $3.93 per share. Concurrently, in a registered direct offering, NeuroBo has agreed to sell an additional 763,359 shares of its common stock at the same price point. Accompanying these offerings, NeuroBo will issue unregistered Series A warrants to purchase up to 5,089,060 shares and Series B warrants to buy up to 7,633,591 shares of common stock. These Series Warrants are priced at $3.93 per share.

The Series A and B warrants have specific conditional expiration dates. The Series A warrants will expire either twelve months post-Stockholder Approval or within 60 days following NeuroBo's announcement of positive Phase 1 multiple ascending dose (MAD) data for their drug candidate DA-1726. The Series B warrants will expire either five years post-Stockholder Approval or within six months after NeuroBo announces positive Phase 1 Part 3 data for DA-1726.

These offerings, priced at-the-market under Nasdaq norms, are anticipated to close on or around June 25, 2024, pending customary closing conditions. H.C. Wainwright & Co. is acting as the exclusive placement agent for these offerings.

From these transactions, NeuroBo expects to raise approximately $20 million before deducting associated fees and expenses. The company plans to utilize the net proceeds primarily for working capital, general corporate purposes, and the continued clinical development of DA-1726, which aims to treat obesity. Additionally, the potential full exercise of the Series Warrants could provide roughly $50 million, which would be directed towards funding the Phase 1 Part 3 clinical trial of DA-1726. However, there is no guarantee that these warrants will be exercised.

The shares offered in the registered direct offering are being sold under a "shelf" registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (SEC) in April 2024. The private placement shares and the Series Warrants are being offered in a transaction not involving a public offering and have not been registered under the Securities Act of 1933. Therefore, these securities may not be offered or sold in the United States unless registered or exempt from registration under the Securities Act and applicable state laws.

NeuroBo Pharmaceuticals is dedicated to transforming cardiometabolic disease treatment. The company's leading project, DA-1726, is an oxyntomodulin (OXM) analogue functioning as a dual agonist for GLP1R and GCGR. OXM naturally decreases food intake and increases energy expenditure, potentially offering superior weight loss benefits compared to selective GLP1R agonists. Another key project, DA-1241, targets Metabolic Dysfunction-Associated Steatohepatitis (MASH) and acts as a GPR119 agonist, promoting the release of important gut peptides and demonstrating positive effects on liver inflammation, lipid metabolism, and glucose control in preclinical studies.

NeuroBo continues to forge ahead with its innovative research and development efforts, driven by the aim to bring novel treatments for significant health challenges to market.