ZIOPHARM Oncology Inc. (NASDAQ: ZIOP) is having a relatively strong start to the trading session this morning after making two separate announcements. The first of these announcements had to do with a fund raise that is expected to bring $50 million through the doors. The second had to do with a newly signed supply agreement that will assist the company in revenue growth. Today, we’ll talk about the news, what we’re seeing from ZIOP stock as a result, and what we’ll be watching for ahead.
ZIOP To Raise $50 Million
As mentioned above, ZIOPHARM Oncology is having a relatively strong start to the trading session this morning after releasing two bits of news. The first had to do with a fund raise. In a press release, the company said that it has entered into definitive securities purchase agreements with regard to the sale of its common stock and warrants to purchase common stock. It is expected that this private placement transaction will generate gross proceeds in the amount of $50 million.
Under the terms of the agreement, ZIOP will issue and sell 18,939,394 shares of its common stock and warrants to purchase up to 18,939,394 additional shares of common stock. Each unit, including one share of common stock and one warrant to purchase one share of common stock will be sold at a purchase price of $2.64 per share.
ZIOP said that the warrants included in this transaction will become exercisable six months following the date of issuance and will expire five years from the date of issuance. The exercise price for the warrants will be $3.01. It is expected that the transaction will close on or around November 13, 2018.
Supply Agreement News
While dilutive transactions like the one announced this morning generally lead to declines, the transaction was overshadowed by a bit of positive news released by the company. In a second press release, ZIOP said that it has entered into a clinical supply agreement with Regeneron Pharmaceuticals.
This agreement surrounds the evaluation of the company’s Ad-RTS-hIL-12 plus veledimex in combination with Regeneron’s PD-1 antibody, known as Libtayo. The combination will be assessed as a treatment for patients with recurrent glioblastoma. Ad-RTS-hIL-12 plus veledimex is an investigational gene therapy that is designed to induce and control the production of human interleukin 12. Ultimately, ZIOP designed the treatment to activate the immune system and recruit cancer fighting T cells into tumors.
ZIOPHARM’s treatment has been approved by the US Food and Drug Administration for the treatment of patients with metastatic cutaneous squamous cell carcinoma or locally advanced CSCC who are not candidates for curative surgery or curative radiation.
According to the terms of the agreement, ZIOP and REGN will initiate a PHase 2 study in the first half of 2019. During the study, the companies will provide patients with rGBM with the treatment to assess the safety and efficacy of the combination. In a statement, Laurence Cooper, M.D., Ph.D. CEO at ZIOP, had the following to offer:
We are excited to collaborate with the oncology team at Regeneron, a world-class, science-driven company with robust oncology expertise… With IL-12 expression under the control of the RheoSwitch Therapeutic System®, we have seen anti-tumor activity as a monotherapy and there is potential to improve upon that response in combination with Libtayo to provide much-needed therapeutic options for patients with rGBM.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of ZIOPHARM, the news proved to be mixed. While the dilutive transaction may be a cause for concern, the news of the agreement with Regeneron proved to be positive, overshadowing any concerns that may have arisen from the offering. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:20), ZIOP is trading at $2.59 per share after a gain of $0.08 per share or 3.19% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ZIOP. In particular, we’re interested in following the company’s new combination trial that will start next year. We’re also interested in following the company’s sales of currently approved treatments and continued work to bring other assets in its pipeline to market. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!