HCW Biologics (HCW Biologics (HCWB)) is having another big day on Friday, with shares jumping 17% after the company announced a $4 million private placement. This comes on the heels of a wild 262% rally earlier in May, which was sparked by strong first-quarter earnings and an exclusive worldwide licensing agreement with Trimmune.
The company filed an 8-K with the SEC on Thursday, saying it entered into a Securities Purchase Agreement with accredited health care investors. The deal involves issuing about 2.85 million units at $1.405 each, raising roughly $4 million.
So what's the money for? Management plans to use the proceeds to advance its clinical pipeline. Specifically, the cash will fund trials for HCW9302 and push forward IND-enabling studies for its T-Cell Engager, HCW11-018b, and its second-generation immune checkpoint inhibitor, HCW11-040. Some of the funds will also go toward general corporate purposes and paying down debt.
This capital injection is a lifeline for the Miramar, Florida-based biotech. As of the last filing, the company had just $1.23 million in cash and equivalents, down from $1.95 million a year ago. The news also halted a two-day slide where retail investors were taking profits after the Trimmune licensing excitement.
From a technical perspective, HCWB is in a steep short-term uptrend. The stock is trading about 348% above its 20-day simple moving average (72 cents) and 470% above its 50-day SMA (56 cents). That's a stretched, chase-style move rather than a slow grind higher. The relative strength index (RSI) is at 84.92, deep in overbought territory. While the 20-day SMA is above the 50-day SMA—a bullish crossover—the 50-day SMA remains below the 200-day SMA, keeping the longer-term picture mixed after a rough 12 months that saw the stock drop 61.6%.
At the time of publication Friday, HCWB shares were trading at $3.02, up 17.05% on the day.
