Concert Pharmaceuticals (CNCE) Stock: Why The Price Surged Today

By Amit Chowdhry ● Nov 4, 2021
  • The stock price of Concert Pharmaceuticals Inc (NASDAQ: CNCE) increased 27.43% today. This is why it happened.

The stock price of Concert Pharmaceuticals Inc (NASDAQ: CNCE) increased 27.43% today. Investors are responding positively to Concert Pharmaceuticals announcing that it has entered into an agreement with BVF Partners L.P. and RA Capital Management (RA) to raise gross proceeds of $65 million. 

Plus Concert will have the potential to receive an additional $103 million upon the full exercise of warrants being issued in connection with the agreement. The closing of the financing is expected on or about November 5, 2021. 

With the $65 million raised in this financing, Concert now expects to be able to fund its operations into Q4 2022. And if the warrants being issued in connection with this financing are fully exercised, Concert expects to be funded beyond the anticipated submission of its New Drug Application for CTP-543, which is expected in early 2023.

The financing consists of the sale of common and preferred stock, warrants, and a portion of Concert’s right to receive potential future AVP-786 royalties under an existing licensing agreement with Avanir Pharmaceuticals. As part of the financing, BVF and RA will receive an aggregate of 16.25 million common stock equivalents, warrants to purchase up to 8.125 million common stock equivalents at an exercise price of $5.34 per share and warrants to purchase up to 8,125,000 common stock equivalents at an exercise price of $7.35 per share. The common stock equivalents will be issued as either shares of common stock or convertible preferred stock.

Previously, Concert granted Avanir (a subsidiary of Otsuka America) worldwide rights to develop and commercialize AVP-786 for the treatment of neurologic and psychiatric disorders in exchange for potential future milestones and royalties. And pursuant to this financing, BVF and RA will also receive a portion of potential future AVP-786 royalties currently payable to Concert by Avanir. 

AVP-786 is currently being evaluated in a number of clinical trials, including Phase 3 trials for the treatment of agitation in patients with dementia of the Alzheimer’s type. And upon the closing of the financing, BVF and RA will collectively own 35% of such royalties with the percentage increasing incrementally up to 50% if all of the warrants issued in connection with the financing are exercised by the holders.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.