Kidney disease drug developer NephroGenex says in a new SEC filing that its biggest investor wants even more shares as the company counts down to an expected public offering of stock.
On Friday, Nephrogenex said that Care Capital “has indicated an interest in purchasing up to approximately $10.4 million in shares.” The company has priced its IPO at a range of $12 to $14 per share.
Care Capital already is the largest shareholder and stands to own 38.9 percent of shares after an IPO and without an additional purchase, NephroGenex said.
In a “risk factor” as noted to investors, NephroGenex wrote:
“We have a significant stockholder, which will limit your ability to influence corporate matters and may give rise to conflicts of interest.”
The company said that “Care Capital will exert significant influence over us and any action requiring the approval of the holders of our common stock, including the election of directors and approval of significant corporate transactions. This concentration of voting power, which would increase to the extent Care Capital is allocated and purchases shares in this offering, makes it less likely that any other holder of common stock or directors of our business will be able to affect the way we are managed and could delay or prevent an acquisition of us on terms that other stockholders may desire.”
NephroGenex had been expected to go public last week, thus joining several Triangle firms that have executed IPOs over the past year.
Square 1 Bank and Argos Therapeutics also are in the IPO queue. (Check out WRALTechWire’s updated IPO watch.)
The region’s IPO list of firms located in the Triangle or with substantial operations in the region for 2013 was impressive:
- LipoScience, $75 million
- Chimerix, $107 million
- Intrexon, $160 million
- Heat Biologics, $26 million
- Regado Bioscience, $43 million
- ChannelAdvisor, $80 million
- CommScope, $577 million
- Aerie, $68 million
- Quintiles, nearly $1 billion
NephroGenex plans to offer 3.1 million shares in its IPO, priced in the range of $12 to $14 per share, according to a registration statement filed with the Securities and Exchange Commission.
At the $13 midpoint of the offering, NephroGenex would raise $40.3 million, which the company says it will use to finance late-stage clinical trials of its lead drug candidate, a diabetic neuropathy treatment.
Aegis Capital Corp. is the sole book-running manager for the stock offering. The underwriter has been granted an over-allotment option to purchase up to 465,000 shares at the IPO price. The company expects IPO net proceeds of $35.9 million, or $41.4 million if the overallotment option is exercised in full.
Nephrogenex has said that it expects to implement a 1 for 6.5 reverse stock split of its outstanding common stock just before the effective date of the stock offering. That means every 6.5 shares of common stock will be decreased to a single share of common stock. While the reverse stock split does not change a company’s valuation, it does change the value of each share.
Companies sometimes do reverse stock splits prior to an IPO to boost the price of each share and make the stock more attractive to potential investors.
Nephrogenex’s lead drug candidate, Pyridorin, was developed to slow the progression of diabetic neuropathy in patients with type 2 diabetes. Diabetic neuropathy is a chronic, degenerative condition of the kidney. The condition affects 6 million patients in the United States, according to figures from the Centers for Disease Control and Prevention. Diabetic neuropathy can progress to end-stage renal failure, requiring dialysis.
In some circumstances it can lead to death. Nephrogenex said it has already reached agreement with the Food and Drug Administration on the study goals for the phase III clinical trial of Pyridorin.
Nephrogenex has applied to list its shares on the Nasdaq exchange, trading under the symbol “NRX.”
