GTx, Inc. Banks $43.4 Million

November 10, 2014

By Riley McDermid, BioSpace.com Breaking News Staff

Cancer biotech firm GTx, Inc. today announced that it will sell approximately $43.4 million of its common stock and warrants to purchase common stock in a private placement via a securities purchase agreement with Biotechnology Value Fund, L. P., some stakeholders and an unnamed group from its management team and board of directors.

Based in Memphis, Tenn., GTx focuses on the discovery, development, and commercialization of small molecules for the treatment of cancer, including breast and prostate cancer, cancer supportive care, cancer prevention and the treatment of cancer-related muscle wasting.

Private placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. It is often used by investors to shore up its existing capital base.

Under the terms of the deal, GTx will receive approximately $43.4 million in gross proceeds from the sale of 64,311,112 shares of GTx common stock and the issuance of warrants for the purchase of 64,311,112 additional shares of GTx common stock. That weights the per unit purchase price of a share of GTx common stock at around $0.675. The warrants outlined in the deal will have a per-share exercise price of $0.85 and will be exercisable for a four year period, said the firm.

The closing of the private placement is subject to customary closing conditions. The deal was unanimously approved by a special committee comprised of disinterested and independent members of GTx’s board of directors. Jefferies LLC served as exclusive financial advisor to the special committee. GTx said details regarding the private placement will be included in a Form 8-K filed with the Securities and Exchange Commission.

“Neither the shares of GTx common stock nor the warrants to be issued in connection with the private placement have been registered under the Securities Act of 1933, as amended (the “Securities Act"),” said the company in a statement. Therefore these securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act.

“GTx has agreed to file certain registration statements covering the resale of the GTx common stock as well as the GTx common stock issuable upon exercise of the warrants,” said the company.