Prana Biotechnology Limited (NASDAQ: PRAN) is having a great start to the year in the first pre-market of 2019, and for good reason. The company announced that it has entered into a securities purchase agreement, under which it will receive a large strategic investment. Of course, the news excited investors who are sending the stock on a run for the top in the market this morning. Today, we’ll talk about:
- The strategic investment;
- what we’re seeing from PRAN as a result; and
- what we’ll be watching for with regard to the stock ahead.
PRAN Announces Strategic Investment
As mentioned above, Prana Biotechnology is having a great start to the trading session this morning after announcing that it has entered into a securities purchase agreement. In a press release issued early this morning, the company announced that it has signed the agreement with Life Biosciences.
Under the terms of the agreement, PRAN will receive a strategic investment of about $31.4 million. $7.5 million of this investment will be made initially with an agreement that allows the company to raise an additional $2 million from other investors. The agreement comes with short-term warrants, which if exercised, will generate an additional $31 million in investments.
In a statement, Mr. Geoffrey Kempler, Chairman and CEO at PRAN, had the following to offer:
Life Biosciences’ investment in Prana is an important endorsement of the significance of our work in addressing neurodegenerative disease. This financing will potentially allow us to accelerate our drug development programs.
In the release, the company also said that as part of the transaction and subject to approval by shareholders, Life Biosciences’ co-founders, Trisden Edwards and David Sinclair will join the company’s Board of Directors. In a statement, Mr. Edwards, had the following to offer:
We are excited to acquire a substantial stake in Prana… Their work on a new generation of neurodegenerative drugs fits within our research model that is based on the eight pathways of age-related decline.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Prana Biotechnology, the news proved to be overwhelmingly positive. After all, the strategic investment will not only drive funds into the company, it is a vote of confidence for their work in the biotechnology space. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:19), PRAN is trading at $2.08 per share after a gain of $0.80 per share or 62.50% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on PRAN. In particular, we’re interested in following the story surrounding the company’s use of the funding generated by this strategic investment as well as the changes that Mr. Edwards and Mr. Sinclair bring to the table as members of the Board. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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