First Wave BioPharma, Inc. (NASDAQ: FWBI) saw a 38.74% increase in stock price, reaching $5.30 during Tuesday’s extended session. First Wave BioPharma’s shares dropped 9.26% during the regular session, closing at $3.82. The increase in FWBI shares followed an equity transaction.
Recent agreements between First Wave BioPharma (FWBI) and some holders of its outstanding warrants, exercisable for 881,337 shares of common stock, were made. The agreement states that the stakeholders will exchange their existing warrants for new ones when they exercise their existing ones at a discounted exercise price of $5.50 per share.
Before subtracting financial advising costs, the total projected gross revenues from the exercise of the current warrants is estimated to be around $4.8 million. According to Nasdaq regulations, the issuing of the new warrants and the corresponding decrease in the redemption price of the existing warrants were structured as an at-market transaction.
The exercising holders will receive new warrants to buy shares of common stock in a private placement in exchange for the prompt exercise of the current warrants for cash and the payment of $0.125 per share underlying the new warrants. The new warrants will be convertible into up to 1,762,674 shares of common stock. The conversion will be at an exercise price of $5.00 per share within their five-year exercise term.
First Wave BioPharma has also signed a non-binding term sheet to market its Niclosamide program, which treats inflammatory bowel diseases (IBD). With the proposed transaction, FWBI will be able to concentrate its development efforts on Adrulipase, Capeserod, and other three of its late-stage clinical products.
Additionally, it has a Phase 3-ready oral biotherapeutic for celiac disease called Latiglutenase, which will be investigated following the conclusion of the previously disclosed possible merger with ImmunogenX. With the inclusion of Sanofi’s Phase 2-ready Capeserod and the impending addition of Phase 3-ready Latiglutenase, FWBI has recently reenergized its GI-focused clinical development program.
Given that each study has a considerable potential to target GI disorders for which there are presently no viable medicines, FWBI plans to swiftly progress these initiatives in 2024.
