VANCOUVER, Nov. 7, 2019 /CNW/ - Sierra Oncology, Inc.
(Nasdaq: SRRA), a late-stage drug development company focused
on the development and commercialization of momelotinib, a JAK1,
JAK2 & ACVR1 inhibitor with a potentially differentiated
therapeutic profile for the treatment of myelofibrosis, today
announced the pricing of an underwritten public offering of Series
A convertible preferred stock, together with Series A warrants and
Series B warrants, each to purchase shares of common stock, with
expected gross proceeds to Sierra Oncology of $103 million. The offering is expected to
close on November 13, 2019, subject
to customary closing conditions.
The offering is comprised of 103,000 shares of Series A
preferred stock, 312,090,000 Series A warrants to purchase up to an
aggregate of 312,090,000 shares of common stock at an exercise
price equal to $0.33 per underlying
share of common stock, and 312,090,000 Series B warrants to
purchase up to an aggregate of 102,989,700 shares of common stock
at an exercise price equal to $0.33
per underlying share of common stock. Each share of Series A
preferred stock is accompanied by (i) 3,030 Series A warrants to
purchase an aggregate of 3,030 shares of common stock (which
equates to 100% warrant coverage), and (ii) 3,030 Series B warrants
to purchase an aggregate of 1,000 shares of common stock
(which equates to 33% warrant coverage). Each share of Series A
preferred stock, and the accompanying warrants was sold at a
combined price to the public of $1,000.
Sierra Oncology intends to use the net proceeds from the public
offering to fund MOMENTUM, its planned Phase 3 clinical trial of
momelotinib, as well as for general corporate purposes.
Each share of Series A preferred stock will be initially
convertible into that number of shares of common stock equal to the
purchase price of the Series A preferred stock divided by the
conversion price of the Series A preferred stock, which is
initially equal to $0.33. Each
share of Series A preferred stock will automatically convert to
shares of common stock upon the fifth day of trading following the
announcement of stockholder approval of the first reverse stock
split following the offering, subject to certain beneficial
ownership limitations. Each share of Series A preferred will be
entitled to vote together with the common stock on an as-converted
basis, subject to certain limitations, without regard to the
beneficial ownership limitation, until such time that the shares of
Series A preferred stock automatically convert to common stock.
Following the automatic conversion described above, the Series A
preferred stock will be non-voting.
Each Series A and Series B warrant will have an exercise price
equal to $0.33 per underlying share
of common stock, and will become exercisable following stockholder
approval of an increase in authorized common stock sufficient to
allow for the exercise of the warrants, subject to certain
beneficial ownership limitations. The Series A warrants will expire
five years from the date they first become exercisable and the
Series B warrants will expire on the 75th day
anniversary following the announcement of top-line date from Sierra
Oncology's planned Phase 3 clinical trial of momelotinib.
Shortly following the closing of the offering, Sierra Oncology
expects to appoint four new directors who are affiliated with Vivo
Capital, Longitude Capital, OrbiMed and Abingworth, each of which
is an investor in this offering. Following such appointments,
Sierra expects its board of directors will continue to consist of
eight directors.
Jefferies is acting as the sole book-running manager for the
offering. Oppenheimer & Co. is acting as lead manager for the
offering.
The securities described above are being offered by Sierra
Oncology pursuant to a registration statement on Form S-3 (File No.
333-225650) that was declared effective by the Securities and
Exchange Commission ("SEC") on June
21, 2018. A prospectus supplement and an accompanying
prospectus relating to the offering will be filed with the SEC and
will be available on the SEC's web site at www.sec.gov. Copies of
the prospectus supplement and the accompanying prospectus relating
to this offering may be obtained, when available, by contacting
Jefferies LLC, Attention: Equity Syndicate Prospectus Department,
520 Madison Avenue, 2nd Floor, New York, NY 10022, or by telephone at (877)
821-7388, or by email at prospectus_department@jefferies.com.
This press release shall not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding Sierra Oncology's the completion
of the offering, the expected gross proceeds from the offering, the
intended use of proceeds and the appointment of new directors. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements. These statements
are based on management's current expectations and beliefs and are
subject to a number of risks, uncertainties and assumptions that
could cause actual results to differ materially from those
described in the forward-looking statements. Such forward-looking
statements are subject to a number of risks and uncertainties,
including the risk factors described under the heading "Risk
Factors" set forth in Sierra Oncology's filings with the Securities
and Exchange Commission from time to time, including the Company's
reports filed with the SEC and a preliminary prospectus supplement
filed with the SEC on November 6,
2019. Sierra Oncology undertakes no obligation to update the
forward-looking statements contained herein or to reflect events or
circumstances occurring after the date hereof, other than as may be
required by applicable law.
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SOURCE Sierra Oncology