What: Shares of Lion Biotechnologies, a clinical-stage biotech focused on cancer immunotherapy, leapt by more than 25% as of 12:00 p.m. EDT after the company announced that it has appointed a new CEO and raised money through a private offering.
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So what:Lion's board has appointed Maria Fardis, Ph.D., as the company's new president and CEO, effective June 1, 2016. Dr. Fardis succeeds Elma Hawkins, Ph.D., who has been in the top chair since January of last year.
Dr. Fardis has held a number of executive positions over the years with a variety of successful drug developers, racking up an impressive track record. Most recently she was COO at Acerta Pharma, a company that was ultimately acquired by AstraZeneca for up to $7.0 billion. She also spent time at Pharmacyclics -- which was acquired by AbbVie for $21 billion -- where she helped to develop the blockbuster cancer drug Imbruvica.
In a separate announcement, Lion stated that it is raising $100 million through a private placement equity offering. The company is selling a combination of 9,684,000 shares of common stock and 11,368,500 shares of newly authorized Series B Preferred Stock. The purchase price is $4.75 per share, and the deal is expected to close by June 7, 2016.
The new Series B Preferred Stock is non-voting and will become convertible into one share of common stock, though details of the timing of the conversion were not released.
Now what: Afterthis capital raise is completed, Lion will hold almost $200 million in cash on its books, which at current spending levels should be enough to fund its operations for years to come.That's great to see, as chances are good that spending will beincreasing quickly over the years as it continues to advance its product compounds down the regulatory pathway.
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Image source: Lion Biotechnologies.
It also bodes well that the company was able to attract an experienced leader who already has a relationship with AstraZeneca's top management team. AstraZeneca has partnered with Lion through its MedImmune division, so it's possible that the board hired Dr. Fardis to assist in the company's eventual sale.
Of course, that is all speculation at this point, and the only thing that matters from here is how well the company's therapies perform in clinical trials. However, given the good news about its leadership team and capital position, it's hard to blame the markets for bidding up shares today.
The article Why Lion Biotechnologies Inc. Stock Is Roaring Higher Today originally appeared on Fool.com.
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