Locust Walk Acquisition Corp. (LWAC) stock prices were down by 5.30% as of the market closing on August 24th, 2021. This brought the price per share down to USD$8.76 at the end of the trading day. Subsequent premarket fluctuations have seen the stock surge by 26.52%, bringing it up to USD$11.14.
LWAC Stock Combines with eFFECTOR
August 24th, 2021 saw the special purpose acquisition company announce the approval of all the proposals related to the acquisition of eFFECTOR Therapeutics. 93.2% of the votes cast by stockholders at the special meeting of stockholders voted in favor of the business combination. This represents roughly 71.7% of LWAC stock’s outstanding shares. Other proposals were also met with overwhelming support in the form of affirmative votes. The transaction is expected to close around August 25th, 2021, after which the company will trade on Nasdaq under the EFTR ticker for common stock and EFTRW for public warrants.
LWAC Stock Capital Generation
The company received elections to redeem roughly 17 million of its outstanding shares. This will result in the trust account holding approximately USD$5.2 million. Consolidated by a concurrent private placement that is expected to generate USD$60.7 million in gross proceeds, LWAC stock will have roughly USD$65.9 million of total cash proceeds from the business combination. Because of this, eFFECTOR has waived the need that the total cash proceeds be equal to or greater than USD$100 million. Before the deduction of expenses related to the combination, the combined company will have roughly USD$53.5 million in net cash available to it.
Allocation of Resources
The partnering company plans to allocate the capital generated from the transaction towards facilitating a readout of topline data from its ongoing Phase 2b KICKSTART trial. The trial is designed to evaluate tomivosertib in conjunction with pembrolizumab in patients with metastatic non-small-cell lung cancer (NSCLC). The funds raised from the business combination will also facilitate a readout of initial overall response rate (ORR) data from LWAC stock’s ongoing Phase 2a dose expansion cohorts. This study is designed to evaluate zotatifin in patients with certain biomarker-positive solid tumors, including, but not limited to, ER+ breast cancer and KRAS-mutant NSCLC.
Future Outlook for LWAC Stock
LWAC stock is poised to capitalize on the opportunities afforded to it in light of its recently approved business combination with eFFECTOR. The company is keen to leverage the resources at its disposal to usher inconsistent growth over the long term. Investors are hopeful that this will translate into significant and sustained increases in shareholder value.
