The initial public offering Cempra Pharmaceuticals plans now has a price.
The Chapel Hill, North Carolina drug development company, which has two clinical-stage antibacterial compounds targeting drug-resistant bacteria, expects to sell 6 million shares for between $11 and $13 per share, raising up to $78 million before fees and expenses, according to an updated registration statement. No date was listed for the offering.
Cempra initially filed to go public last October. According to the updated filing, underwriters for the stock offering will have the option to purchase up to 900,000 in an over-allotment of shares. Also, some Cempra securities holders or parties affiliated with directors of the company have expressed interest in purchasing approximately $20 million in shares.
Proceeds from the Cempra IPO will be used to finance clinical trials on Cempra’s drug candidates. CEM-101, also called solithromycin, is ready to start phase 3 clinical trials as a pneumonia treatment. The company also expects solithromycin to be effective against Legionnaires’ disease as well as sexually transmitted diseases such as syphillis. Cempra announced positive phase 2 clinical trial results for the compound last September, just prior to the IPO filing.
Another Cempra drug candidate, Taksta, has completed phase 2 clinical trials and is being studied as a treatment for skin infections, including MRSA (Methicillin-resistant Staphylococcus).
In the meantime, Cempra has taken other steps to secure its financial position. On December 20, 2011, the company entered into a $20 million loan and security agreement with Hercules Technology Growth Capital. Cempra borrowed $10 million upon closing of the agreement. The company may borrow the remaining $10 million after raising $40 million in equity offering, including the IPO.
Photo credit: Centers for Disease Control/Janice Haney Carr/Jeff Hageman, 2005