Street Calls of the Week
Alzamend Neuro, Inc., a biopharmaceutical company focused on developing treatments for neurological and psychiatric disorders, has entered into an At-the-Market (ATM) issuance sales agreement with Ascendiant Capital Markets, LLC, according to a recent SEC filing. The agreement, effective as of today, allows the sale of common stock up to $6.5 million.
The ATM offering is facilitated through the sale of common stock from time to time, as per the market's conditions. This approach is in accordance with Rule 415 under the Securities Act of 1933. The shares will be offered following a "shelf" registration statement and an accompanying prospectus filed on August 2, 2023, and declared effective on August 10, 2023.
Ascendiant Capital Markets, LLC will act as the sales agent and will execute the sale of shares based on Alzamend Neuro's instructions within the agreed terms. The company will direct the parameters, including quantity, timing, and minimum prices for the share sales.
The sales agreement stipulates that either party can suspend the offering or terminate the agreement upon written notice. The sales will be conducted in compliance with federal and state laws and the regulations of the Nasdaq Stock Market, where Alzamend Neuro's stock is traded under the ticker NASDAQ:ALZN.
The legal opinion of Olshan Frome Wolosky LLP, counsel to Alzamend Neuro, has been included in the filing to confirm the legality of the share issuance and sale.
This news article is based on information contained in an SEC filing.
In other recent news, Alzamend Neuro has partnered with Massachusetts General Hospital to conduct five Phase II clinical trials for its therapeutic drug candidate AL001. These trials aim to evaluate increased lithium levels in the brain, potentially improving treatments for Alzheimer's, bipolar disorder, major depressive disorder, and post-traumatic stress disorder. The company has secured sufficient capital to finance the initiation and progression of these trials over the next 18 months. Alzamend Neuro also plans to replace the standard lithium carbonate dose for bipolar disorder treatment with a lower dose of AL001, aiming to reduce daily lithium intake by 20%.
As part of its recent developments, Alzamend Neuro has initiated a significant conversion of preferred stock into common shares and warrants, potentially allowing for a purchase price of up to $25 million. Ascendiant Capital has adjusted its outlook on Alzamend Neuro, reducing the 12-month price target to $21 from the previous $25, while maintaining a Buy rating on the stock.
The company's secondary therapeutic candidate, ALZN002, is an active immunotherapy product intended to stimulate the immune system to produce anti-amyloid antibodies, potentially reducing Alzheimer's symptoms. Alzamend Neuro anticipates initiating all five Phase II studies for AL001 in the first half of 2025, with exact dates to be announced before the end of 2024.
InvestingPro Insights
Alzamend Neuro's decision to enter into an ATM issuance sales agreement comes at a critical time for the company, as revealed by recent InvestingPro data. The company's market capitalization stands at a modest $6.27 million, reflecting its current financial position. This context makes the potential $6.5 million raise through the ATM offering particularly significant, as it could nearly double the company's market value.
InvestingPro Tips highlight some challenges facing Alzamend Neuro. The company is "quickly burning through cash" and "suffers from weak gross profit margins." These factors likely contribute to the need for additional funding through the ATM offering. Moreover, the tip indicating that "short term obligations exceed liquid assets" underscores the urgency of the capital raise.
The company's stock performance has been notably weak, with InvestingPro data showing a staggering -94.73% one-year price total return. This decline aligns with the InvestingPro Tip that the "stock has fared poorly over the last month" and has "fallen significantly over the last year."
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Alzamend Neuro, providing a deeper understanding of the company's financial health and market position.
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