NEW YORK – Ayala Pharmaceuticals on Friday said it expects to raise $25 million from the sale of 1,666,666 units of equity securities in a private placement with institutional investors, including Redmile Group and SIO Capital Management.
The Wilmington, Delaware-headquartered company has agreed to price each unit at $15. Each unit comprises one share of Ayala's common stock and a warrant to purchase 0.35 of a share of common stock at an exercise price of $18.10. Investors can exercise the warrants any time during the period beginning on the closing date of the placement and ending on the third anniversary of the closing, the firm said.
It noted that one of the institutional investors has elected to receive pre-funded warrants to purchase common stock in lieu of its common stock.
Jefferies is the exclusive placement agent for the private placement, which is expected to close on Feb. 23.
Ayala CEO Roni Mamluk said in a statement that the funds will allow the company to extend its cash runway into 2023 and achieve planned milestones in 2021.
Specifically, Ayala, which is using a bioinformatics platform and next-generation sequencing to develop targeted drugs against tumorigenic cancer drivers, will use the funding to initiate a pivotal Phase II/III study of AL102 for the treatment of desmoid tumors in the first half of 2021. AL102 is a gamma secretase inhibitor that targets tumor cells with Notch pathway activation.
The company also expects to present data later this year from Phase II studies of its other Notch pathway-directed gamma secretase inhibitor, AL101, in recurrent or metastatic adenoid cystic carcinoma and triple-negative breast cancer with Notch-activating mutations.
In 2019, Ayala partnered with ArcherDx to develop companion diagnostics to identify patients with Notch-activating genetic mutations and fusions and determine if they will respond to its investigational drugs.