Gracell Biotechnologies, a Nasdaq-listed Chinese biopharmaceutical firm that develops cell therapies targeting cancer and autoimmune diseases, has inked a deal to raise $150 million in a private placement from a group of healthcare specialist funds.
Gracell, which has yet to introduce any products to the market, said in a statement that this private placement in public equity (PIPE) deal is expected to help extend its cash runway into the second half of 2026.
The deal was oversubscribed by new and existing institutional investors, including Palo Alto-based healthcare investment firm Vivo Capital, which led the deal. Participating investors include Adage Capital Partners, Exome Asset Management, Janus Henderson Investors, Logos Capital, OrbiMed, Pivotal Life Sciences, RA Capital Management, and TCGX.
As part of the deal, Gracell agreed to sell 138.9 million ordinary shares—equivalent to 27.78 million of its American depositary shares (ADSs)—at a price of $3.6 per ADS. This tranche will help the firm raise $100 million in proceeds, according to the statement.
Separately, it will offer the investors warrants to purchase about 44.8 million ordinary shares—equivalent to almost 9 million of the firm’s ADSs—at an exercise price of $5.58 per ADS. This part may lead to an additional $50 million if the warrants are fully exercised within its valid period of 24 months after the closing of this private placement.
The financing is expected to complete on August 10, 2023, subject to customary closing conditions.
As Gracell works to advance product candidates in markets including China, the US, and Europe, the firm intends to use the net proceeds to fund its product R&D and research programmes. The financing will also replenish the firm’s working capital, as well as other general corporate purposes.
Gracell was established in May 2017 by a founding team led by Dr. William Wei Cao, who had previously co-founded Nasdaq-listed cell therapy firm Cellular Biomedicine Group.
It is developing a clinical-stage pipeline with the potential to overcome major industry challenges that persist with conventional CAR-T therapies, including lengthy manufacturing time, suboptimal cell quality, high therapy cost, and lack of effective CAR-T therapies for solid tumours and autoimmune diseases.
Backed by renowned venture investors like Singapore’s Temasek Holdings and Lilly Asia Ventures, Gracell Biotechnologies went public on Nasdaq in January 2021, raising $209 million in its initial public offering (IPO).