Grace Therapeutics secures up to $30 million financing

PRINCETON, N.J. - Grace Therapeutics, Inc. (NASDAQ:GRCE), a biopharmaceutical company focused on developing treatments for rare diseases, announced today that it has entered into agreements to secure up to $30 million in financing. The investment is led by Nantahala Capital and ADAR1 Partners, LP, with additional funds from healthcare-focused institutional investors. According to InvestingPro data, this financing comes at a crucial time as the company has been quickly burning through cash, despite maintaining more cash than debt on its balance sheet.

The company has initially received $15 million in gross proceeds and may receive an additional $15 million upon the exercise of warrants by the investors. The financing is expected to close on Tuesday, subject to customary closing conditions. With a current market capitalization of $32.85 million and a healthy current ratio of 6.01, the company’s liquid assets significantly exceed its short-term obligations.

Grace Therapeutics will issue over 4.4 million shares of common stock, or pre-funded warrants, and accompanying warrants at a price of $3.395 per share. The warrants, exercisable at the same price, will become exercisable upon the U.S. Food and Drug Administration’s approval of the New Drug Application for GTx-104 or by September 25, 2028, whichever comes first. The stock has shown strong momentum with a 37% gain over the past six months, though InvestingPro analysis reveals 8 additional key insights about the company’s performance and prospects.

GTx-104, the company’s lead clinical asset, is a novel injectable formulation of nimodipine for intravenous infusion in patients with aneurysmal Subarachnoid Hemorrhage (aSAH), a rare and life-threatening type of stroke. The company aims to use the net proceeds from the placement to fund pre-commercial development of GTx-104 and for general corporate purposes.

The securities offered in the financing have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration requirements. Grace Therapeutics has committed to filing a registration statement with the Securities and Exchange Commission for the resale of the shares and warrants.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities. The offering will only be made by means of a prospectus following the registration of the securities. Looking ahead, analysts maintain an optimistic outlook, with expectations of profitability this year despite current challenges. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, with analyst price targets suggesting significant upside potential.

The announcement is based on a press release statement from Grace Therapeutics, Inc.

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