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PaxMedica (PXMD) Stock Soared 41% on a $20 Mln Funding Deal

Simon Mugo trader
Updated 18 Nov 2022

The PaxMedica Inc (NASDAQ: PXMD) stock price soared 41%+ after revealing that it had entered into a purchase and registration rights agreement for up to $20 Million With Lincoln Park Capital.

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YOUR CAPITAL IS AT RISK


Investors cheered the news that gives PaxMedica the right to sell up to $20 million of its shares of common stock to Lincoln Park Capital over 30 months. However, the deal is subject to certain limitations, and PaxMedica is not obligated to sell the entire amount of shares or any shares for that matter.

The deal significantly favours PaxMedica because there is no set price at which it must sell the news shares. Instead, the prevailing market prices will determine the price at which the new shares will be sold. Therefore, PaxMedica will sell the new shares at market price when needed. 

The terms of the financing deal continue to improve since it does not contain any restrictions on how PaxMedica shall use the proceeds of the capital raise. There are no participation rights, financial covenants, penalties, or rights of first refusal. 

The clinical-stage biopharmaceutical company excluded any warrants, financial or business covenants, and derivates from the agreement. In addition, Lincoln Park agreed not to short the company’s stock or to engage in hedging activities to get better buying prices.

The financing deal almost seems too good to be true. The deal is valid for 30 months, two and a half years, during which PaxMedica can exercise its right to sell shares worth the entire amount to Lincoln Park Capital. 

Howard Weisman, PaxMedica’s CEO, commented: “This financing affords us additional flexibility as we move toward completing manufacturing validation of intravenous suramin in preparation for NDA submission in late 2023 for the Human African Trypanosomiasis (brucei rhodesiense). The NDA, when submitted, is also expected to trigger an application for a Priority Review Voucher “(PRV”) which the company plans to monetize upon receipt.”

Today’s rally in PaxMedica’s stock price was well-deserved.

*This is not investment advice. 

PaxMedica stock price.

The PaxMedica stock price soared 41.29% to trade at $2.19, rising from Thursday’s closing price of $1.55.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading