Sierra6 Feb 2020 13:10
Sierra Oncology Completes Conversion of Preferred to Common Stock and Issues Stock to Gilead
VANCOUVER, Feb. 6, 2020 /CNW/ - Sierra Oncology, Inc. (SRRA), a late-stage drug development company focused on the development and commercialization of momelotinib, a JAK1, JAK2 & ACVR1 inhibitor with a potentially differentiated therapeutic profile for the treatment of myelofibrosis, today announced that the Series A convertible voting preferred stock issued in its recently completed $103.0 million financing (gross proceeds) have been fully converted into shares of common stock.
In addition, Gilead Sciences, Inc. (Gilead) has been issued 725,283 shares of common stock and a warrant to purchase an equivalent amount of common stock, in consideration for meaningfully reduced royalty rates and elimination of a near term milestone in an amendment to the Asset Purchase Agreement with Gilead for momelotinib, as previously announced.
"These announcements bring clarity to Sierra's simplified go-forward capital structure. We are fortunate to have built both a healthy balance sheet and a critical mass of high quality, supportive shareholders, led by Vivo Capital, Longitude Capital, OrbiMed and Abingworth, investors in our recent financing and from which we appointed four new directors to Sierra's Board, as well as Gilead. These stakeholders are aligned with Management in our focus on achieving regulatory and commercial success with our Phase 3 drug candidate, momelotinib, which has the potential to become an important therapeutic for both first and second line myelofibrosis patients, including the majority that suffer from anemia and thrombocytopenia," said Dr. Nick Glover, President and CEO of Sierra Oncology.
There are now 10,395,732 total shares of common stock outstanding and warrants to purchase 11,102,251 shares of common stock, with an exercise price equal to $13.20 per share. Of these warrants, warrants to purchase approximately 2,574,727 shares of common stock (the Series B warrants) may only be exercised by paying the exercise price in cash, and will expire on the 75th day anniversary following the announcement of top-line data from MOMENTUM, Sierra Oncology's ongoing Phase 3 clinical trial of momelotinib. If these Series B warrants are fully exercised, the company will receive approximately $34.0 million in proceeds.
Sierra Oncology previously reported its cash and cash equivalents totaled $67.7 million as of September 30, 2019, and that subsequently it had closed an underwritten public offering with gross proceeds to Sierra Oncology of $103.0 million. Prior to the end of 2019, a term loan of $5.0 million was repaid to Silicon Valley Bank.
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