Exicure, Inc. Enters Into Definitive Agreement With CBI USA, Inc. for $5.4 Million Equity Financing and Announces Implementation of Strategic Measure to Reduce Cash Burn and Prioritize Strategic Alternatives
September 26 2022 - 4:01PM
Business Wire
- Upon satisfaction of certain closing conditions including
approval by Exicure stockholders, existing investor CBI USA, Inc.
will purchase an aggregate of 3,400,000 shares of common stock for
an aggregate purchase price of $5.4 million, which would result in
CBI obtaining a controlling stake in Exicure
- Exicure to reduce its workforce by approximately 66%, along
with the implementation of other cost-cutting measures
- Company to suspend all pre-clinical activities, and to seek
asset divestiture of SCN9A program
- Company is halting all R&D activities and continues to
explore strategic alternatives focused on maximizing value
Exicure, Inc. (NASDAQ: XCUR) today announced plans to
restructure the Company and align resources to continue exploring
strategic alternatives that maximize stockholder value. After a
strategic review of the Company’s business plans and objectives and
its existing cash resources, the Company’s Board of Directors has
approved the following:
- A workforce reduction of approximately 66%, expected to be
completed by the fourth quarter of 2022;
- Cessation of all R&D activities, including suspension of
all partnered programs;
- Exploration of divesture opportunities for clinical-stage asset
in immuno-oncology and preclinical candidates, including the SCN9A
product candidates for neuropathic pain; and
- Company’s executive team is expected to remain in place
following the restructuring and realignment.
The Company estimates that it will incur total expenses relating
to the restructuring of approximately $0.5 million, consisting of
severance and termination-related costs and expects to record a
significant portion of these charges in the third quarter of 2022.
This restructuring plan is expected to extend the Company’s cash
runway into the second quarter of 2023 based on current operating
plans and estimates.
Update Regarding SCN9A Program
For the SCN9A program targeting the Nav 1.7 channel for
neuropathic pain, Exicure developed several potential candidates
that have shown promising activity in preclinical studies with a
significant level of knockdown of the SCN9A mRNA transcript.
Unfortunately, results from a recent in-vivo animal study in
non-human primates did not meet desired target engagement levels as
observed in previous in vitro preclinical studies. Additional
preclinical studies would be required to understand recent
findings, likely delaying the timing of IND-enabling work. As a
result, Exicure has suspended further pre-clinical activities for
the SCN9A program as it assesses strategic alternatives for all its
assets, including its platform technology, with the goal of
maximizing stockholder value.
“These decisions are never easy, and we understand the impact
they have on all our stakeholders and stockholders, including our
loyal Exicure employees. I want to address our Exicure employees
impacted by our workforce reduction by stating that the decision
today is in no way a reflection on them. I am so proud and honored
to be their colleague at Exicure as I have seen firsthand their
tremendous efforts, sacrifices and contributions in following the
science, being true to the data and ultimately pursuing treatments
in patients with unmet medical needs. Exicure will support them in
transitioning to their future endeavors,” stated Matthias Schroff,
Chief Executive Officer, Exicure.
Private Placement Transaction with CBI, USA
Exicure also today announced that it has agreed, subject to
customary closing conditions including stockholder approval, to
sell an aggregate of 3,400,000 shares of its common stock at a
purchase price of $1.60 per share to existing investor, CBI USA,
Inc. (“CBI USA”), a subsidiary of CBI, Co. Ltd., in a private
placement in public equity (“PIPE”) financing. Upon satisfaction of
certain closing conditions including approval by Exicure
stockholders, CBI USA would hold a controlling position in Exicure
equivalent to approximately 50.4% of the total voting power (based
on the current number of outstanding shares of common stock). Under
the terms of the transaction, assuming stockholders approve the
transaction, CBI USA will also receive the right to nominate the
number of directors to the Company’s Board equivalent to its
proportional equity ownership of shares of the Company’s common
stock from time to time, subject to approval by the Board and
compliance with the provisions of applicable securities
legislation, regulations, rules, policies and Nasdaq rules
including, but not limited to, Nasdaq Listing Rule 5640.
Exicure anticipates that the gross proceeds from the PIPE will
be approximately $5.4 million, before deducting transaction-related
expenses payable by the Company and will be used for working
capital and general corporate purposes. The transaction was
approved by the Board of Directors of Exicure and Exicure
stockholders will receive a proxy statement seeking their approval
of the transaction with CBI USA in the coming weeks.
About Exicure
Exicure, Inc. is an early-stage biotechnology company developing
nucleic acid therapies targeting ribonucleic acid against validated
targets for neurological disorders and hair loss. The team includes
a diverse scientific group with expertise in nucleic acid
chemistry, drug development, and neuroscience. For further
information, see www.exicuretx.com.
Forward-Looking Statements This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this
press release other than statements of historical fact may be
deemed forward looking including, without limitation: statements
regarding the Company’s current business plans and objectives; the
expected cost-savings from the proposed workforce reduction and the
expecting timing for incurring costs associated with the workforce
reduction, and the expected timing of implementing and completing
the workforce reduction; estimated extended cash runway
post-workforce reduction; the Company’s ability and timing to
obtain stockholder approval for the completion of the PIPE; and the
use of proceeds of the PIPE. Words such as “plans,” “expects,”
“will,” “anticipates,” “continue,” “advance,” “believes,” “target,”
“may,” “intend,” “could,” and other words and terms of similar
meaning and expression are intended to identify forward-looking
statements, although not all forward-looking statements contain
such terms. Forward-looking statements are based on management’s
current beliefs and assumptions that are subject to risks and
uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation, the effects of the announcement or
the consummation of the transaction on the market price of the
Company’s common stock; the risks associated with governance and
control matters in controlling investments; the Company’s ability
to successfully implement the workforce reduction; the impact of
the workforce reduction on the Company’s business; the failure to
obtain stockholder approval of the PIPE or the failure to satisfy
any of the other conditions to the completion of the PIPE; risks
relating to the financing required to complete the PIPE; the effect
of the announcement of the PIPE or workforce reduction on the
ability of Exicure to retain and hire key personnel; risks
associated with the disruption of management’s attention from
ongoing business operations due to the transaction; significant
transaction costs, fees, expenses and charges; and the risk of
litigation and/or regulatory actions related to the PIPE. Given
these risks and uncertainties, you are cautioned not to place undue
reliance on such forward-looking statements. For a discussion of
other risks and uncertainties, and other important factors, any of
which could cause the Company’s actual results to differ from those
contained in the forward-looking statements, see the section titled
“Risk Factors” in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2021 filed with the Securities and Exchange
Commission on March 25, 2022, as updated by the Company’s
subsequent filings with the Securities and Exchange Commission. All
information in this press release is as of the date of the release,
and the Company undertakes no duty to update this information or to
publicly announce the results of any revisions to any of such
statements to reflect future events or developments, except as
required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20220926005749/en/
Media: Karen Sharma MacDougall 781-235-3060
ksharma@macdougall.bio
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