Orexo AB (publ) proposes SEK250M rights issue ahead of drug milestones

An approximately SEK250 million rights issue would finance drug development and a possible U.S. Justice Department settlement payment as Orexo AB (publ) STOORX OTCMKTSORXOY seeks shareholder approval, the company said on Oct. 6. On Aug. 31, Orexo had about SEK118.7 million in cash after excluding temporary working capital items linked to its Zubsolv divestment transition.

The board's Oct. 6 resolution gives existing holders preferential rights to subscribe, subject to approval at an extraordinary meeting planned for Nov. 6. Shareholders, directors and the chief executive have committed about SEK16 million, and an underwriting commitment adds about SEK159 million. Together, those commitments cover 70 per cent of the planned gross raise, while the subscription price and potential dilution remain unknown.

Orexo is a small Swedish pharmaceutical developer based in Uppsala, building rescue medicines around its AmorphOX drug delivery platform.

The STOORX quote showed Orexo shares down 44.7 per cent to SEK7.48 in Stockholm at 9:53 a.m. CEST on Tuesday.

Only 70 Per Cent of the Raise Is Covered

Orexo said the SEK175 million covered by subscriptions and underwriting is the basis for its prioritized spending plan. A fully subscribed issue would bring in about SEK250 million before costs. Holders cannot yet calculate the cash needed to maintain their stake because the price, subscription ratio and maximum new share count have not been announced. Orexo expects to announce final issue terms preliminarily on Nov. 3.

The company estimates it can finance its current business plan for the next 12 months using existing cash, net proceeds from the covered portion of the issue and expected earn-out payments. Its assessment of avoiding further outside financing beyond that period depends on securing partnerships for OX640 and Izipry and keeping development on schedule. That makes the planned raise a bridge to clinical and regulatory milestones, with the partnership outcome still uncertain.

Orexo intends to finance OX640's first pivotal anaphylaxis trial through an expected readout in the first half of 2027. It also listed OX390 and the AmorphOX platform among its development priorities, alongside working capital. Any payment toward its share of an expected U.S. Justice Department settlement remains subject to a final settlement agreement.

"Through the Rights Issue presented today, we are strengthening the financial flexibility to advance OX640 through the first expected read-out, complete the regulatory process for Izipry and continue developing the AmorphOX platform," Orexo chief executive Nikolaj Sørensen said in the Oct. 6 release.

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Izipry Awaits An FDA Review Timetable

Orexo also intends to complete the regulatory process for Izipry, its high-dose naloxone nasal powder designed for opioid overdose rescue. The company resubmitted its U.S. application on Sept. 29 after a 2024 FDA complete response letter, and said then that it expected word on acceptance and a revised review timetable in the coming weeks. Its Oct. 6 financing release describes approval in the first quarter of 2027 as possible, without giving a confirmed FDA decision date.

Read more: Rezolute says FDA recommends pre-BLA meeting after congenital HI trial miss

Anaphylaxis peer ARS Pharmaceuticals, Inc. NASDAQSPRY has received FDA approval for neffy, an epinephrine nasal spray, according to its approval announcement. For dated sector context, the iShares Biotechnology ETF NASDAQIBB closed at US$205.29 at 4 p.m. EDT on Oct. 2.

Orexo plans to ask shareholders at an extraordinary meeting on Nov. 6 to decide whether the rights issue can proceed. If approved, the company proposes Nov. 10 as the record date for subscription rights and plans subscriptions from Nov. 12 to Nov. 26.