Mirati Therapeutics Sets Share Price For $800M Public Offering

Mirati Therapeutics (MRTX) has announced the pricing of an underwritten public offering of 4,335,397 shares of its common stock at $202 per share. MRTX is currently trading down 0.5% in Wednesday’s pre-market trading at $209.

The offering consists of 3,960,397 shares to be sold by Mirati and 375,000 shares to be sold by a selling stockholder.

The aggregate gross proceeds to Mirati from this offering are expected to be approximately $800 million, before deducting underwriting discounts, commissions and other expenses.

The offering is set to close on or about October 30, 2020, subject to customary closing conditions.

Mirati has also granted the underwriters a 30-day option to purchase up to an additional 625,309 shares, with the selling stockholder granting up to an additional 25,000 shares.

Mirati says it will use the proceeds for general corporate purposes, including expenses related to the clinical and commercial development and manufacturing scale-up of its product candidates as well as working capital.

The company adds that it will not receive any proceeds from the sale of common stock by the selling stockholder.

The equity offering follows the release of Mirati’s preliminary results from its mutant KRAS selective inhibitor programs showing promising anti-tumor activity.

The preliminary results included updated clinical data of adagrasib (MRTX849), the company’s KRAS G12C inhibitor, and initial preclinical in vivo data of MRTX1133, Mirati’s selective and potent potential first-in-class KRAS G12D inhibitor.

“The adagrasib preliminary data presented today showed deep and durable anti-tumor activity in non-small cell lung cancer (NSCLC), colorectal cancer (CRC) and other solid tumors, providing renewed hope for patients that harbor a KRAS G12C mutation” commented Charles M. Baum, CEO of Mirati.

Indeed, adagrasib demonstrated a 45% confirmed objective response rate as a monotherapy in advanced NSCLC. Meanwhile 70% (16/23) of responders had a best tumor response greater than 40%.

At the same time MRTX1133 demonstrated tumor regression in multiple in vivo tumor models, including pancreatic and colorectal cancers- potentially building up to an Investigational New Drug filing in the first half of 2021.

Overall, shares in Mirati have surged 62% year-to-date, and the stock scores a bullish Strong Buy Street consensus. That’s with 10 buy ratings vs 3 hold ratings. However, due to the recent rally, the $205 average analyst price target indicates shares could pull back from current levels.

“We reiterate our Buy rating and are increasing our price target to $238 from $222 due to our increased probability of success (PoS) for adagrasib” commented HC Wainwright analyst Ed White on October 26.

He called the updated data for the drug ‘remarkable’, saying that the safety and efficacy data could lead to accelerated approval in NSCLC. White estimates adagrasib sales of $105.8M in 2022, growing to approximately $2.6B in 2028. (See MRTX stock analysis on TipRanks)