Elutia (Nasdaq:ELUT) announced today that it entered into a securities purchase agreement worth total proceeds of $26.2 million.
The drug-eluting biomatrix company expects the private placement financing to result in initial gross proceeds of approximately $10.5 million. The full exercise of warrants would add $15.8 million to reach a total of $26.2 million.
Silver Spring, Maryland-based Elutia expects the cash raised to support the advancement of its drug-eluting biomatrix products. The company also expects the divestiture of its orthobiologics business to aid in the effort. Elutia develops its drug-eluting products for the pacemaker and defibrillator market, plus breast reconstruction post-mastectomy.
The company designed its CanGaroo Envelope for device protection with acellular biologic material. The porcine small intestine submucosa extracellular matrix creates a healthy pocket for implanted devices. Its Simpliderm pre-hydrated human acellular dermal matrix supports soft tissue repair in breast reconstruction. It enhances and supports the angiogenic process, providing a more pliable matrix. The implant results in a lower risk of inflammatory response, fast integration and rapid revascularization.
Existing investor HighCape Capital and new investors Nantahala Capital and a life-sciences-focused investment fund participated. Lake Street Capital Markets acts as the exclusive placement agent. Elutia expects the transaction to close on Sept. 21, subject to certain conditions.
“We appreciate the support of our investors, demonstrating the high value of our platforms and technology for patient care,” said Dr. Randy Mills, president and CEO of Elutia. “The combined proceeds from our orthobiologics divestiture and today’s financing potentially adds more than $60 million in cash to our balance sheet, materially strengthening our financial position and extending our cash runway. We remain well-positioned to execute on our upcoming program milestones involving CanGaroo for device protection and SimpliDerm for breast reconstruction.”
