Kidney disease drug developer XORTX slides after direct offering announced

On Thursday, October 17, shares of XORTX Therapeutics, a maker of drugs to treat progressive kidney diseases, plunged over 16% in New York and more than 9% on the in Toronto following the announcement of a $1.5 million registered direct offering. On the Nasdaq, the company’s market capitalization now stands at $5.3 million.

Details

On Thursday, XORTX stock lost more than 16% to $1.82 per share on the Nasdaq and over 9% to CAD2.67 per share on the TSX Venture exchange.

Earlier in the day, the company announced that it had entered into agreements with institutional investors to sell 810,810 shares at $1.85 per share, a discount of almost 15% to the closing price the day before (Wednesday, October 16). This also includes an offer of five-year warrants with an exercise price of $2.18.

The deal, expected to close today, Friday, October 18, should raise about $1.5 million (before offering expenses and excluding proceeds received from the exercise of the warrants). XORTX plans to use the proceeds to bolster its working capital. In the first half of 2024, the company’s net loss shrank 20% year over year to $2.8 million. XORTX has no revenue from product sales yet, with all its drugs still in development. It funds its operations primarily by issuing new equity.

About XORTX

Currently, XORTX has three drugs in its pipeline for treating progressive kidney diseases. One of them, the XRx-008 molecule, is in phase II clinical trials. It is designed to treat ADPKD (autosomal dominant polycystic kidney disease), a condition that also affects the cardiovascular system and can lead to premature death. XORTX aims to stop or at least slow the progression of the disease with XRx-008.

Another XORTX product, XRx-101, is designed to treat acute kidney injury associated with Covid-19. A third program aims to find a treatment for type 2 diabetes-related nephropathy.