Pulmatrix (NSDQ:PULM) said today that it landed an agreement with several institutional investors to purchase $5.0 million of shares of common stock in a registered direct offering.
The Lexington, Mass.-based company agreed to sell 2 million shares of common stock at $2.50 apiece. The offering is expected to close on Feb. 2.
Pulmatrix said it anticipates that the offering will bring in $4.5 million in net proceeds, which it plans to use for general corporate purposes and debt payments.
Rodman & Renshaw is the exclusive placement agent in connection with the offering.
The company’s shares soared this month after the company announced that its drug candidate for treating fungal infections in the lungs of cystric fibrosis patients was designated as a ‘qualified infectious disease product’ by the FDA.
With the designation, Pulmatrix won 5 years of market exclusivity for the drug candidate.
“The new QIDP designation is a significant boost to our efforts to make this drug available as quickly as possible to cystic fibrosis patients suffering from fungal lung infections,” Pulmatrix CEO Robert Clarke said in prepared remarks. “It will give us the benefit of an expedited regulatory review. Added to our existing FDA Orphan drug designation for PUR1900, it will give us a full 12 years of market exclusivity.”
Cystic fibrosis patients often experience allergic reactions when their lungs are infected with aspergillus fungus, according to Pulmatrix. Traditionally, doctors try to treat those infections with high doses of oral antifungals, but they can cause severe side effects and are not always effective.
Pulmatrix uses its dry powder iSperse technology in combination with itraconazole, a common oral antifungal, which enables the patient to inhale the drug directly into their lungs.
In November, the company reported that it reeled in its losses by -35% to -$3.2 million compared to Q3 last year. Revenue fell -91% compared with the same period last year to $61,000 for the 3 months ended Sept. 30. Losses per share were -21¢.
Pulmatrix cited the conclusion of a clinical study funded by its collaboration with Mylan (NSDQ:MYL) as the cause of its drastic decrease in revenue.
PULM shares were trading at $2.44 apiece in mid-morning activity, down -27.8%.