Dara BioSciences seeks to raise $32.5 million

Dara BioSciences is seeking to raise as much as $32.5 million through a sale of stock and warrants.

The Raleigh company is offering to sell about 8 million “units” at a per unit price of $2.48 – which was the closing price of the company’s stock on April 16.

Each unit consists of one share of common stock and a warrant to purchase a half-share at an exercise price that is 125 percent of the closing bid price of Dara’s stock before the pricing of the offering.

Dara plans to use the proceeds from the sale to fund “commercial activities related to our product portfolio,” among other uses.

Dara has two products on the market: Soltamox, an oral liquid formulation used in the treatment and prevention of breast cancer, and Bionect, a topical treatment for skin irritation and burns caused by radiation. Dara also has exclusive U.S. commercial rights to market and sell Gelclair for the treatment of oral mucositis, or swelling and bleeding of the mouth and gums.

Dara is also developing a treatment of chemotherapy-induced peripheral neuropathy in cancer patients. The company’s stock jumped 23 percent in a single day in February after the company announced that the treatment had received orphan drug designation from the Food and Drug Administration.

In the company’s regulatory filing for this latest offering, Dara notes among the risks to investors is that new investors “will incur substantial dilution as a result of this offering and future equity issuances, and as a result, our stock price could decline.” Purchasing the units in the offering, the company notes, will mean immediate dilution of $1.10 per share in the net tangible book value of the common stock acquired.

Dara also notes that there is no established public trading market for the warrants being offered, nor does the company expect one to develop. “Without an active market, the liquidity of the warrants would be limited.”

Dara shares closed Tuesday at $1.83, down 3 cents. The stock has dropped 28 percent since the stock and warrant sale was announced.