×

Achaogen Raises $25 Million in Private Placement

SOUTH SAN FRANCISCO, Calif., June 02, 2016 (GLOBE NEWSWIRE) -- Achaogen, Inc. (NASDAQ:AKAO), a clinical-stage biopharmaceutical company developing novel antibacterials addressing multi-drug resistant (MDR) gram-negative infections, today announced that it has entered into an agreement to sell shares of its common stock and warrants to purchase shares of its common stock for aggregate gross proceeds of approximately $25 million in a private placement. New Enterprise Associates (NEA), one of the largest biotechnology investors worldwide, led the placement and was joined by EcoR1 Capital, LLC and additional new investors. Achaogen expects to use proceeds of the financing to advance its research and development programs and for general corporate purposes. The Company’s lead product candidate, plazomicin, is being developed to treat serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE).

As a result of this equity financing, the Company expects to meet certain funding conditions under an existing loan agreement with Solar Capital Ltd. and plans to draw an additional $10 million term loan from Solar Capital.

In a separate press release, the Company also announced today that it has been awarded $20 million for an additional option, Option 3, on its existing contract with the Biomedical Advanced Research and Development Authority (BARDA) to support the development of plazomicin. The remaining available funding currently committed under the contract with BARDA now totals approximately $41 million.

“We welcome a distinguished group of new investors to Achaogen,” said Kenneth Hillan, M.B. Ch.B., Achaogen's Chief Executive Officer. “We are excited to advance plazomicin to top-line data from the EPIC study in patients with cUTI and the CARE study in patients with serious bacterial infections due to CRE.”

About the Private Placement
Achaogen has agreed to sell approximately 8 million shares of common stock and warrants to purchase approximately 2 million shares of common stock for aggregate gross proceeds of approximately $25 million before deducting offering expenses. The price to be paid for the common stock, $3.15 per share, is equal to the consolidated closing bid price on the Nasdaq Global Market on the day of pricing, June 1, 2016. The warrants have a per share exercise price of $3.66, are exercisable immediately, and expire five years from the date of issuance.

The Company expects the offering to close by June 3 subject to satisfaction of specified customary closing conditions.

The securities to be sold in this private placement have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and will be sold in a private placement pursuant to Regulation D of the Securities Act. The securities may not be offered or sold in the United States absent registration or pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. Achaogen has agreed to file a registration statement covering the resale of the shares of common stock acquired by the investors and shares of common stock issuable upon exercise of the warrants acquired by the investors.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be by means of a prospectus.

About Achaogen
Achaogen is a clinical-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of novel antibacterials to treat MDR gram-negative infections. Achaogen is developing plazomicin, Achaogen’s lead product candidate, for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae. Achaogen’s plazomicin program is funded in part with Federal funds from the Biomedical Advanced Research and Development Authority, Office of the Assistant Secretary for Preparedness and Response, Office of the Secretary, Department of Health and Human Services, under Contract No. HHSO100201000046C. Plazomicin is the first clinical candidate from Achaogen’s gram-negative antibiotic discovery engine, and Achaogen has other programs in early and late preclinical stages focused on other MDR gram-negative infections. For more information, please visit www.achaogen.com.

Forward-Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical facts contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, Achaogen’s expectations regarding (i) the timing for announcing topline results from Achaogen’s Phase 3 EPIC trial and submission of an NDA to the U.S. Food and Drug Administration, (ii) Achaogen’s plans to draw an additional term loan from Solar Capital, (iii) Achaogen’s planned use of proceeds from its private placement described in this press release, and (iv) the timing of the closing of the private placement described in this press release. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause Achaogen's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the preclinical and clinical development process; specific risks related to the ongoing Phase 3 EPIC trial and Phase 3 CARE trial, including the lack of a prior clinical trial in patients with CRE infections and challenges in enrolling an adequate number of patients with rare infections; the risk of failure to successfully validate, develop and obtain regulatory clearance or approval for the in vitro diagnostic (IVD) assay for plazomicin; the risks and uncertainties of the regulatory approval process; the risks and uncertainties of commercialization and gaining market acceptance; the risk that bacteria may evolve resistance to plazomicin; risks and uncertainties as to Achaogen’s ability to raise additional capital to support the development of plazomicin and its other programs; uncertainties regarding the availability of adequate third-party coverage and reimbursement for newly approved products; Achaogen’s reliance on third parties to conduct certain preclinical studies and all of its clinical trials; Achaogen’s reliance on third-party contract manufacturing organizations to manufacture and supply its product candidates and certain raw materials used in the production thereof; Achaogen’s dependence on its President and Chief Executive Officer; risks and uncertainties related to the acceptance of government funding for certain of Achaogen's programs, including the risk that BARDA could terminate Achaogen’s contract for the funding of the plazomicin development program; risk of third party claims alleging infringement of patents and proprietary rights or seeking to invalidate Achaogen’s patents or proprietary rights; and the risk that Achaogen’s proprietary rights may be insufficient to protect its technologies and product candidates. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Achaogen's business in general, see Achaogen's current and future reports filed with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and its Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Achaogen does not plan to publicly update or revise any forward-looking statements contained in this press release, whether as a result of any new information, future events, changed circumstances or otherwise.

Source: Achaogen, Inc.
AKAO-G

Investor Contact: Hans Vitzthum 212.915.2568 hans@lifesciadvisors.com Media Contact: Denise Powell 510.703.9491 denise@redhousecomms.com

Source:Achaogen Inc.