Eupraxia Pharmaceuticals Inc. (NASDAQ:EPRX) experienced an approximate 8% drop in its share price on Thursday after the company disclosed the pricing terms for a previously announced public offering.
The company is offering 6,428,574 common shares at $7.00 per share and is also selling pre-funded warrants exercisable for up to 1,428,571 common shares at $6.99999 per warrant. The transaction is anticipated to produce around $55 million in gross proceeds prior to underwriting commissions and other offering expenses.
Underwriters have been granted a 30-day option to buy up to an additional 1,178,571 common shares on the same terms as the base offering. The deal is scheduled to close on February 20, 2026, subject to customary closing conditions.
Cantor and LifeSci Capital are acting as joint book-running managers, while Bloom Burton and Craig-Hallum are serving as co-managers for the offering.
Use of proceeds
- The company intends to use the majority of the proceeds to advance EP-104GI for the treatment of Eosinophilic Esophagitis, including completing ongoing preclinical studies and Phase 2 clinical trials, preparing for Phase 3 trials, and funding manufacturing activities.
- Proceeds will also support the expansion of clinical studies for EP-104GI into other gastrointestinal indications such as esophageal strictures and fibrostenotic Crohn's disease.
- A portion of the funds is planned for research and development of additional pipeline candidates, business development initiatives, and general corporate purposes, which the company identifies to include employee salaries, working capital, and facility leases.
Eupraxia bases its therapeutic approach on its Diffusphere™ technology, designed to enable localized, controlled drug delivery for conditions with important unmet medical needs.
The market reaction - an immediate decline in the company's stock price - followed the financing announcement. The offering structure combines direct common share issuance with pre-funded warrants, and includes an overallotment option for the underwriters.