Olema Shares Soar After Novartis Deal and $250 Million Private Placement

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Olema Shares Soar After Novartis Deal and $250 Million Private Placement

On Monday, Olema Pharmaceuticals' stock price rose by over 10% following the announcement of a new clinical trial collaboration with Novartis and a significant private placement. These agreements will advance the development of targeted therapies for breast cancer.

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

The company's CEO, Sean P. Bohen, M.D., Ph.D., stated that these developments fully enable the initiation of the important Phase 3 clinical trial OPERA-02. He also mentioned that the combined resources from the agreements will support other studies, including the Phase 1/2 trial of OP-3136 and the ongoing Phase 3 OPERA-01 monotherapy trial. Bohen expressed the expectation to share initial data from OPERA-01 in 2026 and to present recent findings at the upcoming San Antonio Breast Cancer Symposium.

The private placement, set to close on December 4, 2024, will consist of the issuance of common stock and pre-funded warrants to a mix of new and existing investors. Among these investors are notable firms such as Adage Capital Partners LP, Bain Capital Life Sciences, and Wellington Management. The transaction is being conducted in accordance with Nasdaq rules and is priced based on the average closing price over the five trading days ending November 27, 2024.

Jefferies is leading the private placement, while major investment banks including J.P. Morgan, Citigroup, and Goldman Sachs & Co. LLC are participating as placing agents. The net proceeds from this private placement will be used to finance the OPERA-02 trial, the OP-3136 study, and the OPERA-01 trial, as well as to provide working capital and support general corporate purposes.