What happened
Shares of Oric Pharmaceuticals (ORIC 5.21%) were up more than 19% Monday after rising more than 21% earlier in the day. The clinical-stage biotech company announced a $85 million private placement financing. Its shares are up more than 28% so far this year.
So what
Oric focuses on oncology therapies. The company announced on Monday that it will sell 12.1 million shares to a group of institutional investors in a private placement at $7 a share, which is a 15% premium to the stock's 30-day average and up 8% from Friday's closing price.
The company said the additional funding will allow it to support the development of its early-stage therapies through late 2025. Oric has three therapies in phase 1 trials, ORIC-114, ORIC-533, and ORIC-944. It said it expects to report initial safety and antitumor activity in ORIC-114 to treat patients with EGFR/HER2-mutated solid tumors in the second half of the year. ORIC-533's own early readout as a therapy to treat patients with relapsed and refractory multiple myeloma is expected in the second half of 2023, and ORIC-944 is expected to have initial data as an advanced prostate cancer treatment in the first quarter of 2024.
Now what
Like any clinical-stage biotech company, Oric presents a lot of risk because it will likely be years before it brings a drug to market, much less becomes profitable. The cash raise makes sense since the company's drug candidates are all in the early stages of development. As of the first quarter, the company said it had $208.9 million in cash, which was enough, it said then, to fund operations into the first half of 2025. The private placement should enable the company to operate for another six months, perhaps enough time to bring one of its therapies to market.
