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NEW YORK - Lexeo Therapeutics, Inc. (NASDAQ:LXEO), a clinical stage genetic medicine company currently trading at $2.82 per share, has announced the successful arrangement of a private placement to the tune of approximately $80 million. According to InvestingPro data, this financing comes at a crucial time as the company has been quickly burning through cash, though it maintains more cash than debt on its balance sheet. The financing round was co-led by Frazier Life Sciences and Janus Henderson Investors, with contributions from a mix of new and existing investors, indicating a strong vote of confidence in the company’s future prospects.
The transaction, which is anticipated to close on May 28, 2025, involves the issuance and sale of over 20 million shares of common stock and, for some investors, pre-funded warrants to purchase additional shares. Each share or warrant comes with a half-share purchase warrant, and the total proceeds are expected to extend Lexeo’s cash runway into 2028. The company’s current market capitalization stands at approximately $93.6 million, with a healthy current ratio of 3.42x, indicating strong short-term liquidity.
The funds raised will be allocated toward advancing Lexeo’s clinical programs, particularly the development of LX2006 for the treatment of Friedreich ataxia cardiomyopathy, as well as general corporate purposes. This strategic move is poised to bolster the company’s position in the field of cardiac genetic medicines, with the aim of transforming the treatment landscape for cardiovascular diseases.
Lexeo’s CEO, R. Nolan Townsend, expressed confidence that the support from the investors will accelerate the company’s program development and foster innovation in next-generation therapies. The securities offered in this private placement have not been registered under the Securities Act of 1933 and will be subject to a registration rights agreement, which obligates the company to register the resale of the shares and underlying common stock.
J.P. Morgan and Oppenheimer & Co. served as co-lead placement agents, while Baird also acted in this capacity for the transaction. The offering adheres to Nasdaq’s Minimum Price rule, ensuring compliance with exchange regulations.
This financial milestone is based on a press release statement and reflects Lexeo’s ongoing commitment to addressing the genetic causes of cardiovascular conditions, while also highlighting the company’s ability to navigate the financial landscape to secure the necessary capital for its ambitious clinical endeavors. With analyst price targets ranging from $15 to $28, and InvestingPro analysis suggesting the stock is currently undervalued, investors seeking detailed insights can access 12 additional ProTips and comprehensive financial metrics through an InvestingPro subscription.
In other recent news, Lexeo Therapeutics reported a fourth-quarter loss of $0.78 per share, missing analyst estimates of a $0.72 loss. Despite this, the company shared positive interim data from clinical trials of its lead drug candidates, which included a 71% and 115% increase in PKP2 protein expression in the LX2020 HEROIC-PKP2 Phase 1/2 trial. Additionally, the first participant evaluated six months post-dosing showed a 67% reduction in premature ventricular contractions. H.C. Wainwright adjusted its price target for Lexeo to $15 from $23 while maintaining a Buy rating, taking into account recent developments in the gene therapy sector. The firm highlighted Lexeo’s promising early data and noted its confidence in the company’s prospects. Meanwhile, Leerink Partners reduced their price target for Lexeo to $18 from $19 but maintained an Outperform rating, citing potential in the company’s clinical programs despite negative market sentiment. Furthermore, Lexeo reported regulatory clarity on its LX2006 program for Friedreich ataxia cardiomyopathy, aligning with the FDA on using frataxin expression increases as an endpoint. The company ended 2024 with $128.5 million in cash and investments, projecting this will fund operations into 2027.
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