aibioFibroGen (now Kyntra Bio) sets up $30.0 million at-the-market stock program
Tickers KYNB
BofA Securities will sell shares as agent for a commission of up to 3.0%. The stock last sold at $0.7724 before the filing.
Key facts
- Company
- Kyntra Bio, Inc. (NASDAQ: KYNB)
- News type
- Financings
- Primary source
- Kyntra Bio, Inc. 424B5 (2025-02-24)
The sales agreement
FibroGen, Inc., now Kyntra Bio, Inc., entered into an ATM Equity Offering Sales Agreement with BofA Securities, Inc. on February 24, 2025. Under it, FibroGen may sell common stock with aggregate sales proceeds of up to $30.0 million, from time to time, through BofA as its sales agent or as principal. BofA will use commercially reasonable efforts to sell the stock on the company's instructions, which may include price, time or size limits. FibroGen will pay BofA a commission of up to 3.0% of the gross sales proceeds. The company is not obligated to make any sales, and the program ends when all the stock under it is sold or the agreement is terminated.
Sales may be made on the Nasdaq Global Select Market, where the stock trades as FGEN, or in other markets allowed by law. The last reported sale price on February 20, 2025 was $0.7724 per share.
The shares are being sold under a Form S-3 shelf, Registration No. 333-280597, declared effective on July 10, 2024, and a prospectus supplement dated February 24, 2025. Cooley LLP gave the opinion on the shares, filed as Exhibit 5.1. The filings do not name counsel to BofA, but the prospectus supplement says FibroGen agreed to reimburse BofA for its counsel's reasonable fees and disbursements up to $150,000.
Dilution and the cash it would bring in
The prospectus supplement says the number of shares outstanding after the offering is based on 100,770,153 shares outstanding as of September 30, 2024. If all 38,839,979 shares were sold at $0.7724 per share, the company would have up to 139,610,132 shares outstanding. The supplement says the actual number will vary with the sales price.
Use of proceeds is stated broadly: working capital and general corporate purposes, including research and development and capital expenditures. The company says it may also use proceeds and its existing cash, cash equivalents and marketable securities to in-license, acquire or invest in businesses, technology platforms, products or assets. It adds that it has no current commitments to do so.
A going-concern warning and a Nasdaq problem
The prospectus supplement says the company has determined there is substantial doubt about its ability to continue as a going concern within 12 months after the supplement's date. The financial statements incorporated by reference are prepared on a going-concern basis that does not adjust asset or liability values for that uncertainty. The supplement says the company may be forced to delay, limit, reduce or end its development programs if it cannot raise capital when needed.
The company also says it is not in compliance with Nasdaq's minimum bid price requirement. Nasdaq sent it a letter on September 12, 2024, saying that the bid price had closed below $1.00 for 30 consecutive business days. The company says it has 180 calendar days, or until March 11, 2025, to regain compliance under Nasdaq listing rule 5810(c)(3)(A). The notice had no immediate effect on the listing, but the supplement warns the stock could be delisted if the company does not regain compliance.
The sale of its China business
On February 20, 2025, FibroGen and an indirect subsidiary agreed to sell all of the equity of FibroGen International (Hong Kong) Ltd. to AstraZeneca for an aggregate purchase price of about $160 million, including $85 million in cash for the enterprise value. The sale is subject to regulatory approval from the China State Administration for Market Regulation. At closing, the company intends to repay its term loan facility with Morgan Stanley Tactical Value. AstraZeneca has been FibroGen's commercialization partner for roxadustat in greater China and South Korea.
The company is developing FG-3246, an antibody-drug conjugate targeting CD46 for metastatic castration-resistant prostate cancer, through a partnership with Fortis Therapeutics. The supplement says the company plans a meeting with the FDA in the second quarter of 2025 to decide next steps for the roxadustat development program in the United States.
The supplement warns the company has broad discretion over the use of net proceeds and may not use them effectively. The sales agreement gives the company no obligation to sell, so the program may raise little or nothing at the prices the market sets.