Kitov Pharma (KTOV): Shoring up the Balance Sheet by Selling Shares Comes with a Price


After pricing an equity offering that will dilute current investors but help shore up its balance sheet, shares in Kitov Pharma (NASDAQ:KTOV) tumbled nearly 15% today.

The Israeli pharma firm priced 3,260,000 American Depositary Shares (ADS) at $2.5 apiece, which was well below the $3.3 per share where the stock had been trading yesterday afternoon. In addition, Kitov will also issue unregistered warrants to purchase up to 1,630,000 ADSs. The warrants will have a term of 5.5 years, be exercisable immediately following the issuance date and have an exercise price of $2.80 per ADS.

That said, the offering will raise approximately $8,150,000, which will allow the company to advance its investigational drug candidate NT219, which is currently in development for various oncology indications.

Kitov also recently announced that the FDA has approved its flagship combination drug Consensi, which simultaneously treats pain caused by osteoarthritis and treats hypertension. Kitov’s CEO Isaac Israel believes the approval of Consensi puts the company in a stronger position towards securing commercial partnerships for the U.S. and other key territories.

According to H.C. Wainwright analyst Ram Selvaraju, KTOV is grossly undervalued, compared to his $10 price target. As such the analyst rates the stock a Buy. (To watch Selvaraju’s track record, click here)

Bear in mind that H.C. Wainwright is also acting as the exclusive placement agent in connection with the offering.

Kitov is an innovative biopharmaceutical drug development group of companies. Kitov’s flagship combination drug, Consensi™ achieved the primary efficacy endpoints for its Phase III and Phase III/IV clinical trials, and was approved by the FDA for patients suffering from osteoarthritis pain and hypertension. NT219, which is developed by its majority-owned subsidiary, TyrNovo Ltd., is a novel patented small molecule designed to overcome cancer drug resistance that is currently in pre-clinical development. By lowering development risk and cost through fast-track regulatory approval of novel late-stage therapeutics, Kitov plans to deliver rapid ROI and long-term potential to investors, while making a meaningful impact on people’s lives.

 



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