Philadelphia gene therapy developer Cabaletta Bio expects to close a $35 million stock and warrants sale this week, which will support the company's ongoing efforts to develop curative treatment for autoimmune diseases.
Cabaletta (NASDAQ: CABA) is selling pre-funded warrants — in lieu of common stock — to purchase 6.2 million shares of common stock at a price of $5.52 per pre-funded warrant, plus 126,815 shares of its common stock at the same $5.52 per share price.
Participating in the oversubscribed offering are new and existing investors, including Venrock Healthcare Capital Partners, Adage Capital Partners, Cormorant Asset Management and an undisclosed life sciences-focused investment fund.
Cabaletta intends to use the net proceeds from the offering, together with its existing cash and cash equivalents, to fund the completion of preclinical development and the submission of an investigational new drug application submission for CABA-201. The cell therapy candidate is being developed to treat multiple, undisclosed autoimmune disease.
The company, which has about 50 employees, listed cash and cash equivalents of $85.9 million on Sept. 30.
Cabaletta obtained an exclusive worldwide license for CABA-201 from Nanjing IASO Biotherapeutics Co. Ltd. of China in October.
"We believe CABA-201 has the potential to transform treatment of several common autoimmune diseases by providing clinical and serologic remission, and a potential to reset the immune system," said Dr. Stephen Nichtberger, Cabaletta's co-founder and CEO.
The warrant and stock sale funds will also enable the company to fund the initial clinical development of CABA-201, if its investigational new drug application is approved by the Food and Drug Administration.
Funds will also be used for the ongoing clinical studies for the company's DSG3-CAART and MuSK-CAART product candidates, as well as for working capital and general corporate purposes.
DSG3-CAART is a potential treatment under development for patients with mucosal pemphigus vulgaris, a rare skin disorder characterized by blistering of the skin and mucous membranes.
MuSK-CAART is a potential treatment under development for patients with myasthenia gravis, a rare condition caused by a breakdown in communication between nerves and muscles that results in weakness in arm and leg muscles, double vision, and difficulties with speech and chewing.
Founded in 2017, Cabaletta is focused on the discovery and development of engineered T cell therapies for patients with B cell-mediated autoimmune diseases.
The company, which has a sponsored research agreement with the University of Pennsylvania that it expanded in 2020, went public through a $74.8 million initial public stock offering in 2019.
Cowen and Co. and Evercore Group are serving as joint book-running managers for the offering.