Stock reaction
Galecto Inc. (NASDAQ: GLTO) saw its stock trade down 4.3% in after-hours trading on Tuesday after the company disclosed a planned public offering of equity securities. The announcement outlined a proposed sale that would include shares of the company's common stock alongside Series C non-voting convertible preferred stock issued to certain investors.
Details of the proposed offering
According to the company statement, the proposed transaction contemplates both common stock and Series C preferred stock. Galecto indicated it will grant the underwriters a 30-day option to acquire additional common shares, a move that can expand the size of the deal in the immediate secondary market.
The filing states that each share of the Series C preferred stock will be convertible, at the holder's election, into 1,000 shares of common stock, subject to ownership conversion limits. The company also emphasized that the offering is conditional on market conditions and other factors, and that there are no guarantees regarding whether the offering will be completed, or as to its eventual size or terms.
Use of proceeds
Galecto said it intends to allocate the proceeds from the offering to multiple development and corporate needs. Specifically, the company plans to support preclinical studies and clinical trials, provide manufacturing support for its antibody programs, and fund additional research and development activities. A portion of the proceeds is also earmarked for working capital and general corporate purposes.
Advisers on the deal
Jefferies, Leerink Partners, Evercore ISI, and Guggenheim Securities are named as joint book-running managers for the offering.
Clinical pipeline
Galecto is developing a pipeline of antibody therapeutics focused on blood cancers. Programs in development target myeloproliferative neoplasms, including essential thrombocythemia and myelofibrosis. The company also lists GB3226, described as a preclinical dual inhibitor intended for treating genetic subsets of acute myeloid leukemia, among its portfolio.
Note: The company filing and disclosure emphasize that the proposed offering remains subject to market and other conditions and may not proceed as described.