Olema Oncology announces $250.0 million private placement and Novartis supply deal

Olema Pharmaceuticals, Inc. (Nasdaq: OLMA) said on December 2, 2024 that it had signed a clinical trial collaboration and supply agreement with Novartis, and a securities purchase agreement for a private placement of about $250.0 million. The two deals are linked in the release. The Novartis agreement supplies the ribociclib needed for a planned Phase 3 trial, OPERA-02, of palazestrant combined with ribociclib in frontline ER+/HER2- metastatic breast cancer. The trial is planned at about 1,000 patients.

The financing terms

Olema agreed to sell 19,928,875 shares of common stock at $9.08 each, and pre-funded warrants for up to 7,604,163 shares at $9.0799 each. Gross proceeds are about $250.0 million, before placement agent fees and other offering expenses. The pre-funded warrants have an exercise price of $0.0001 a share, can be exercised immediately and remain exercisable until exercised in full. The price was set from the average Nasdaq official closing price over the five trading days ended November 27, 2024. The closing was expected on or about December 4, 2024.

The securities are unregistered and were sold under an exemption from registration. Olema agreed to file a resale registration statement covering the shares sold.

Who sold the deal

Jefferies is the lead placement agent. J.P. Morgan, Citigroup, Goldman Sachs & Co. LLC, LifeSci Capital, Oppenheimer & Co. and H.C. Wainwright & Co. are also placement agents. The release does not give the fees.

The release names the participants as Adage Capital Partners LP, Bain Capital Life Sciences, BVF Partners L.P., Driehaus Capital Management, Janus Henderson Investors, Paradigm BioCapital Advisors, Wellington Management and Woodline Partners LP, plus an unnamed "large investment manager." It does not say how much any one investor bought.

What Novartis provides, and what Olema gives up

Under the supply agreement, Novartis provides ribociclib for OPERA-02, which Olema sponsors. Clinical data and inventions from the trial will be jointly owned. Olema keeps global commercial and marketing rights to palazestrant. The release gives no payment terms for the supply agreement, so the cost to Olema cannot be measured from this document. The release describes joint ownership of trial data in specific terms but gives no value for it.

What the money is meant to fund

The company says the net proceeds, together with existing cash, cash equivalents and marketable securities, will fund OPERA-02, the Phase 1/2 study of its KAT6 inhibitor OP-3136, the ongoing Phase 3 OPERA-01 monotherapy trial of palazestrant, and working capital. OPERA-02 was expected to start in mid-2025. The company says OPERA-01 topline data are due in 2026 and that it remains on track for them.

The CEO, Sean P. Bohen, M.D., Ph.D., said the company now expects to have the necessary resources to execute the three studies. The release gives no cash balance, no spending plan and no cost estimate for any of them. The funding claim therefore rests on the company's own statement. The release also says Olema will present its latest Phase 1b/2 data for palazestrant with ribociclib at the San Antonio Breast Cancer Symposium the following week, but it does not report those results.

What to weigh

Palazestrant is in Phase 3 testing as a single agent and has Fast Track designation for patients whose disease has progressed after endocrine therapy and a CDK4/6 inhibitor. The release describes its anti-tumor activity in ongoing trials, but it gives no response rates or survival figures. The pipeline now depends on OPERA-01 results due in 2026, and on a roughly 1,000-patient OPERA-02 trial that the release expects to start in mid-2025. The financing gives Olema the cash to reach those readouts, according to the company, but the release does not show how much cash it would have without the placement.

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