Olema stock surges on Novartis deal and $250M private placement

On Monday, Olema Pharmaceuticals experienced a surge of over 10% in its share price following the announcement of a new clinical trial collaboration with Novartis (SIX:NOVN ) and a substantial private placement. The agreements are set to advance the company's development of targeted therapies for breast cancer.

Olema, a clinical-stage biopharmaceutical company, disclosed its collaboration with Novartis for a Phase 3 trial of palazestrant in combination with Novartis' ribociclib for the treatment of ER+/HER2- metastatic breast cancer. This partnership includes the supply of ribociclib for the approximately 1,000 patient trial. Additionally, Olema has entered into a securities purchase agreement for a private placement, which is expected to generate around $250 million.

The company's CEO, Sean P. Bohen, M.D., Ph.D., expressed that these developments fully enable the initiation of the pivotal Phase 3 clinical trial, OPERA-02. He also mentioned that the combined resources from the agreements would support other studies, such as the Phase 1/2 study of OP-3136 and the ongoing Phase 3 OPERA-01 monotherapy trial. Bohen anticipates sharing topline data from OPERA-01 in 2026 and presenting recent findings at the upcoming San Antonio Breast Cancer Symposium.

The private placement, which is slated to close on December 4, 2024, will see the issuance of common stock and pre-funded warrants to a mix of new and existing investors. These include well-known entities such as Adage Capital Partners (WA:CPAP ) LP, Bain Capital Life Sciences, and Wellington Management, among others. The transaction is being conducted in compliance with Nasdaq rules and was priced based on the average closing price of Olema's stock over the five trading days ending November 27, 2024.

Jefferies is leading the private placement, with significant investment banks like J.P. Morgan, Citigroup (NYSE:C ), and Goldman Sachs & Co (NYSE:GS ). LLC participating as placement agents. The net proceeds from this private placement, along with Olema's existing capital, are intended to fund the OPERA-02 trial, the study of OP-3136, and the OPERA-01 trial, in addition to providing working capital and supporting general corporate purposes.

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Source: Investing.com