Rexahn Pharmaceuticals (RNN) Stock Is Under the Hammer; Here’s What You Need to Know
Shares of biotechnology company Rexahn Pharmaceuticals (RNN) are collapsing – down nearly 43% as of this writing. The reason? Rexahn announced this morning that it will be selling 10.75 million shares of its own stock to raise cash for “its lead clinical programs, including the funding of its clinical development programs for RX-3117 and RX-5902, and for working capital and general corporate purposes.”
In addition to this big dilution, Rexahn is offering new stock for a price that implies about 30% discount to yesterday’s closing price. Each share of common stock is being sold together with a common warrant to purchase one share of common stock at a combined effective price to the public of $0.80 per share and accompanying common warrant. The common warrants will be exercisable immediately at an exercise price of $0.80 per share and will expire five years from the date of issuance.
On the other hand, these new shares won’t just raise the share count but they’ll also raise cash. Rexahn expects the sale of these new shares to help shore up its balance sheet by generating as much as $8.6 million in new capital, excluding the proceeds, if any, from the exercise of the warrants.
Last Friday, January 18, clinical investigators from six trial sites in the U.S. presented updated positive interim safety and efficacy data from an ongoing Phase IIa clinical trial of RX-3117 in combination with nab-paclitaxel (Abraxane) as front-line therapy in patients with metastatic pancreatic cancer at the 2019 American Society of Clinical Oncology Gastrointestinal (ASCOGI) Cancers Symposium in San Francisco, California. RX-3117 is Rexahn’s leading drug candidate and a prodrug of a nucleoside analog activated by an enzyme highly expressed in tumors and largely absent in healthy cells. Rexahn guides to completing patient enrollment in this Phase IIa trial 1Q19, with additional interim results to be presented at a major medical conference (or two) by year-end.
The Street Verdict
Wall Street’s confidence backing this biotech player is strong, with TipRanks analytics showcasing RNN as a Buy. Based on 4 analysts polled in the last 12 months, all 4 rate a Buy on Rexahn stock. The 12-month average price target stands at $10.12, which implies a huge upside from current levels. (See RNN’s price targets and analyst ratings on TipRanks)