– All Outstanding Convertible
Debentures Converted into Common Stock – – Funds to be Used
for Continued Clinical Development of Lead Candidate,
Onapristone – – Multiple Potential Indications Include
Endometrial, Breast and Prostate Cancers –
Arno Therapeutics, Inc. (OTCQB:ARNI), a clinical stage
biopharmaceutical company focused on the development of oncology
therapeutics, today announced a series of financial transactions,
including the completion of a private placement of newly issued
shares of common stock and common stock warrants, resulting in
gross proceeds to the Company of $30.7 million.
The private placement includes participation from all major
investors in Arno's 2012 financing, such as affiliates of Soros
Fund Management LLC, Perceptive Advisors LLC, Sabby Capital, The
Pontifax Group, Commercial Street Capital LLC, and Bellco Capital
LLC, an investment firm controlled by Arno's Executive Chairman,
Dr. Arie S. Belldegrun and his family. New investors include OPKO
Health, Inc. (NYSE:OPK), Mr. David Bonderman, founding partner of
TPG Capital, and Dr. Phillip Frost, Chairman and CEO of OPKO. As
with Arno's 2012 financing, the Company's senior management team
also participated in the private placement. The Company intends to
use the net proceeds from this financing primarily to fund ongoing
activities for its onapristone development program.
In conjunction with the financing, all holders of Arno's
outstanding 8% Senior Convertible Debentures issued in November and
December 2012 agreed to convert the entire amount of their
debentures into shares of common stock. Additionally, the
Company has implemented a 1-for-8 reverse split of its common
stock.
Glenn Mattes, President and Chief Executive Officer of Arno
Therapeutics, stated, "This private placement and capital
restructuring reflect the progress of our scientific team and the
advancement of our lead product and cancer therapeutic,
onapristone, into the clinic. We believe these financial
initiatives position Arno advantageously in the capital markets and
provide the financing for our clinical development program. I
want to thank our Executive Chairman, the entire Board and our
investors for their unwavering support and
commitment."
Dr. Arie Belldegrun, Executive Chairman of Arno Therapeutics,
added, "I am extremely pleased with the accomplishments we
announced today. Arno is now poised to commence two important Phase
I clinical trials with onapristone to address the need for new and
effective treatment in several large indications including breast
and prostate cancers. Arno's Chief Medical Officer Dr. Alex
Zukiwski, a highly experienced drug developer, and I are
very impressed with the results from previous clinical trials and
extensive pre-clinical testing of onapristone as an effective
hormone treatment in women's cancers and the potential in prostate
cancer. We look forward to announcing clinical results in the
coming months."
In connection with the financing transaction, the Company has
entered into an agreement with OPKO, pursuant to which OPKO has
been granted a right of first negotiation, providing exclusive
rights to negotiate with Arno for a limited period regarding any
potential strategic transactions that Arno's Board of Directors
elects to pursue. In addition, OPKO shall have the right to
designate one individual to serve as an observer to all meetings of
Arno's Board of Directors.
Dr. Phillip Frost, OPKO's Chairman and Chief Executive Officer,
said, "Our team at OPKO regularly reviews what we consider exciting
healthcare investments that offer scientific opportunities in areas
of unmet medical need. Our process for selection is diligent. We
were attracted to Arno based on the potential of onapristone and
its progress towards the clinic. Dr. Belldegrun and the Arno
development team have constructed a thoughtful clinical strategy
intelligently incorporating a fully developed companion diagnostic.
We look forward to expanding our relationship with Arno as the
Company continues to advance the compound's clinical
development."
Mr. Mattes concluded, "We are making significant progress toward
the commercialization of onapristone, as the Phase I study in women
with progesterone receptor positive tumors is on track to begin in
November 2013 and the Phase I study of onapristone in men with
androgen independent prostate cancer is scheduled to commence in
early 2014. We are excited by the potential of both studies, and
expect to achieve meaningful clinical milestones as we continue our
efforts to bring this product to market."
Terms of Financing
In connection with the financing transaction, the Company
entered into a securities purchase agreement with the investors,
pursuant to which it issued and sold a total of approximately 12.8
million units of its securities for gross cash proceeds of $30.7
million. Each unit consisted of (A) one share of common stock, or
at each investor's election, a 5-year "Series C" warrant to
purchase one share of common stock at an exercise price of $0.01
per share, (B) a five-year "Series D" warrant to purchase one share
of common stock at an exercise price of $4.00 per share, and (C) a
"Series E" warrant to purchase, on or before October 31, 2014, one
share of common stock at an exercise price of $2.40 per
share. The per unit price of the securities sold in the
private placement was $2.40, or $2.39 to the extent an investor
elected to purchase a Series C warrant in lieu of a share of common
stock. All of the foregoing share amounts reflect the 1-for-8
reverse stock split effected immediately prior to the completion of
the financing, as described below.
The securities sold in the private placement 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
under such act and applicable state securities laws or an
applicable exemption from those registration requirements. The
Company has agreed to file a registration statement covering the
resale of the shares issued in the private placement, including the
shares issuable upon exercise of the warrants. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy these securities, nor shall there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior the registration or
qualification under the securities laws of such jurisdiction.
Recapitalization and Reverse Stock Split
The Company also announced that all holders of its 8% Senior
Convertible Debentures issued in November and December 2012, which
had a principal balance of $14.9 million, agreed to convert the
entire amount of such indebtedness, together with interest accrued
through October 2014, into shares of common stock at a price of
$2.40 per share (as adjusted to give effect to the 1-for-8 reverse
split). In connection with such conversion, the Company issued
a total of approximately 7.1 million newly-issued shares of common
stock (as adjusted to give effect to the 1-for-8 reverse
split). In addition, the Company agreed to amend the terms of
its 18-month Series B warrants issued to the debenture holders in
2012 by extending the termination date to October 31,
2014.
Immediately prior to the completion of the financing
transaction, Arno also effected a 1-for-8 reverse split of its
common stock. The Company effected the reverse split by filing an
amendment to its certificate of incorporation with the Delaware
Secretary of State, as had been previously authorized by
stockholders. The Company expects the reverse split to be
reflected in trading prices quoted on the OTCQB beginning October
30, 2013.
As a result of the reverse split, each issued and outstanding
pre-split share of Arno common stock was combined into one-eighth
of a share. The trading symbol for the common stock will
remain unchanged, although a "D" will be placed at the end of the
symbol (ARNID), for 20 business days to alert the public to the
reverse split. In addition, the Company's common stock will
trade under a new CUSIP number (042564203). It is not necessary for
Company stockholders to exchange their existing stock certificates
for new certificates as a result of the reverse split, although
stockholders may do so if they wish. American Stock Transfer
& Trust Company, the transfer agent for the Company's common
stock, will be distributing written instructions to stockholders on
how to exchange their existing certificates.
As a result of the financing, debenture conversion and reverse
stock split, the Company has approximately 20.4 million shares of
common stock outstanding, plus options and warrants to purchase
approximately 54.0 million additional shares of common stock.
About Arno Therapeutics
Arno Therapeutics is a clinical stage biopharmaceutical company
developing innovative products for the treatment of cancer.
Arno has exclusive worldwide rights to develop and market three
innovative anti-cancer product candidates. These compounds
are in clinical or preclinical development as product candidates to
treat hematologic malignancies and solid tumors. For more
information about the company, please
visit www.arnothera.com.
Forward-Looking Statements
This press release contains forward-looking statements that
involve substantial risks and uncertainties. These statements are
often, but not always, made through the use of words or phrases
such as "anticipates," "expects," "plans," "believes," "intends,"
and similar words or phrases. These forward-looking statements
include, without limitation, statements regarding the timing,
progress and anticipated results of the clinical development of
onapristone, statements regarding Arno's anticipated use of
the proceeds from its private placement of common stock and
warrants, statements regarding its ability to achieve its
development goals with the proceeds from the financing, statements
regarding the expected timing of its planned clinical trials of
onapristone, as well as statements regarding Arno's strategy,
future operations, outlook, milestones, future financial position,
future financial results, plans and objectives. We may not actually
achieve these plans, intentions or expectations and Arno cautions
investors not to place undue reliance on our forward-looking
statements. Actual results or events could differ materially from
the plans, intentions and expectations disclosed in the
forward-looking statements we make. Various important factors could
cause actual results or events to differ materially from the
forward-looking statements that we make. Such factors include,
among others, risks that the results of clinical trials will not
support our claims or beliefs concerning the effectiveness of
onapristone or any of our other product candidates, our ability to
finance the development of our product candidates, regulatory
risks, and our reliance on third party researchers and other
collaborators. Additional risks are described in the company's
Annual Report on Form 10-K for the year ended December 31,
2012. Arno is providing this information as of the date of this
press release and does not undertake any obligation to update any
forward-looking statements as a result of new information, future
events or otherwise.
CONTACT: The Ruth Group
Stephanie Carrington (investors)
scarrington@theruthgroup.com
(646) 536-7017
Kirsten Thomas (media)
kthomas@theruthgroup.com
(646) 536-7014
Arno Therapeutics
Glenn Mattes
gm@arnothera.com
(862) 703-7176
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