Soleno Therapeutics Inc. is selling 10,272,375 units to certain institutional and accredited investors to raise about $16.5 million in gross proceeds.
The units are priced at $1.60625 each and are made up of a common share worth $1.60 and a warrant to buy an additional 0.05 of the company's stock at 0.625 cents apiece, equating to a price of $2 for each one whole share.
The offering, expected to close Dec. 21, will help the biopharmaceutical company meet its clinical trial expenses, which include its ongoing Destiny phase 3 study of medicine Diazoxide Choline to treat a rare and inherited neurobehavioral/metabolic disorder known as Prader-Willi syndrome.
Roth Capital Partners LLC is acting as the company's sole placement agent for the private placement, which is led by bioscience investment firm Abingworth LLP and supported by certain existing investors of the company, including Oracle Investment Management Inc. and entities associated with Jack Schuler and Ernest Mario, the board chairman of Soleno.
In relation to the offering, Abingworth nominated Andrew Sinclair to be appointed as a class I director to Soleno's board, effective upon the closing of the offering and with a term ending at the 2021 annual meeting of stockholders. Sinclair is a partner and portfolio manager at Abingworth.
Concurrent to Sinclair's appointment, Rajen Dalal submitted his resignation as a director from Soleno's board, effective Jan. 1, 2019. His resignation was not the result of any disagreement with Soleno's operations, policies or practices.