Cellectar Biosciences, a Madison, WI-based startup developing cancer drugs and imaging tools, began trading on the Nasdaq stock exchange today and is holding a public stock offering expected to raise $12.5 million in cash.
The announcement is a key step for the company, whose stock was traded over the counter. Xconomy recently explored Cellectar’s prospects for jumping to the large, high-profile Nasdaq exchange—a move that isn’t guaranteed for small companies with few tangible assets, but one that can bring much-needed capital and legitimacy in the eyes of Wall Street investors.
“The move to Nasdaq is a significant milestone for Cellectar and underscores our commitment to grow the value of our company and broaden our shareholder base,” says CEO Simon Pedder, in a statement emailed to Xconomy. “The strong fundamentals of the company, together with the increased visibility that Nasdaq provides, should assist us in maximizing shareholder value over the short and long term.”
Cellectar is trading on the Nasdaq Capital Market under the ticker “CLRB.” It said it will issue 3,333,333 shares of common stock at $3.75 per share, plus warrants to purchase up to the same number of additional shares at 1 cent per warrant. Cellectar will also issue another 1,110,000 shares and warrants to cover $4 million in convertible debt and interest. The warrants will have an exercise price of $4.68 per share, Cellectar said.
The offering is expected to close around Aug. 20.
Cellectar expects to raise $12.5 million before paying underwriter Aegis Capital and covering certain offering expenses.
Cellectar was founded in 2002 by University of Wisconsin-Madison radiology professor Jamey Weichert. Over the next eight years, the company raised more than $23 million in venture capital to develop compounds called phospholipid ethers (PLEs) that could be used as a vehicle for fluorescent or radioactive material that would help detect and map the locations of cancer cells, or to deliver drugs or sources of radiation to the cancer cells. Such targeted drugs should theoretically cause less damage to healthy cells than typical cancer drugs do, thus minimizing side effects. Cellectar has created three novel cancer-targeting products that utilize PLEs—one therapeutic compound and two imaging agents—that are at various stages of development, from pre-clinical testing to a Phase 2 trial.
The company was acquired in 2011 by Newton, MA-based Novelos Therapeutics, whose leading cancer drug candidate had failed a Phase 3 trial. Novelos, a public company that traded its stock over the counter, moved the headquarters of the combined company to Madison.
This year, the company renamed itself Cellectar Biosciences, raised $4 million in a private placement offering of convertible debt, and enacted a 1-for-20 reverse stock split to boost its stock price—and its chances of Nasdaq approval.
Next year will be critical for Cellectar. Pedder said today the company expects to report data in the first half of 2015 from its ongoing Phase 2 trial of one of its imaging compounds in glioblastoma, a type of brain or spinal tumor. By the end of next year, it also intends to report findings from two proof-of-concept trials: one studying the ability of its therapeutic agent to treat multiple myeloma, and another assessing the use of its second imaging agent in breast cancer surgery.