Shares of Catabasis Pharmaceuticals (NASDAQ: CATB) are surging on Friday premarket after the company announced it has acquired Quellis Biosciences Inc, in a stock for stock transaction.
The company revealed it has also entered into an agreement to sell Series X convertible preferred stock in a private placement to a group of institutional accredited investors led by Perceptive Advisors with participation from new and existing investors.
Catabasis expect to raise approximately $110 million and will look to use the proceeds to enable the completion of IND-enabling studies, Phase 1a, and Phase 1b/ 2 clinical trials for the lead program QLS-215 hereditary angioedema, a potentially life-threatening disease.
“Catabasis has worked diligently with external advisors to explore and evaluate a range of strategic options, and the Board and management team believe that this transaction represents an opportunity to create substantial value for Catabasis’ stockholders,” said Kenneth Bate, Chair of the Catabasis Board of Directors.
Once the acquisition is completed, Catabasis expects to have cash, cash equivalents, and short-term investments of approximately $150 million and a cash runway through 2023.
Its share price has climbed over 53.91% premarket currently trading at $3.76 following Thursday’s close at $2.42.
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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.