Eupraxia Prices IPO Below Expectations

Posted on March 4, 2021 by Mathieu Litalien

Earlier this week, Eupraxia announced it had priced its IPO below expectations. The company had initially expected to raise $50M at prices between $9.00 and $11.00 per share. Unfortunately, demand came in much lower than expected and the company priced the IPO at $8.00 per unit and will issue up to  5,125,000 units for gross proceeds of $41M.

Each Unit consists of one common share and one-half of warrant which have an exercise price of $11.20 per share. 

Upon completion of the IPO and assuming the maximum number of units are sold and the agent's option is exercised in full, Eupraxia will have have 13,634,023 shares outstanding. This gives it a value of approximately $110M. 

The lack of demand is surprising considering it marks the first pharmaceutical IPO to list solely the TSX Index in years. Typically, you see either a dual listing, TSXV or a U.S. listing. Canadian biotechs also tend to graduate to a U.S. listing from the TSXV instead of going to the TSX senior exchange.

Given the low demand for this IPO, it appears the Canadian markets are still not all that interested in early stage biotech companies. We don't see a big rush to jump into this one, but we aren't exactly early-stage biotech investors either.  As we mentioned previously, they have a long runway ahead. The early stage biotechs carry considerable risk but can also yield significant rewards. Definitely not for those with lower risk tolerances. 

The shares are expected to begin trading on March 9.


News Release

Eupraxia Pharmaceuticals Inc. Files Final Prospectus and Announces Pricing of Initial Public Offering


VICTORIA, BC, March 3, 2021 /CNW/ – Eupraxia Pharmaceuticals Inc. (“Eupraxia” or the “Company”), a Phase 2 clinical-stage biotechnology company with an innovative drug delivery technology platform, today announced that it has obtained a receipt for its final prospectus filed with the securities regulatory authorities in each of the provinces of Canada, other than Quebéc, in connection with the initial public offering (the “Offering”) of 5,125,000 units of the Company (the “Units”) at a price of $8.00 per Unit for gross proceeds to the Company of $41,000,000. A copy of the final prospectus in respect of the Offering is available on SEDAR at

Each Unit consists of one common share in the capital of the Company (each a “Common Share”) and one-half of one common share purchase warrant of the Company (each whole common share purchase warrant, a “Warrant”). Each Warrant is exercisable into one common share of the Company (each, a “Warrant Share”) at an exercise price of $11.20 per Warrant Share at any time prior to 5:00 p.m. (Toronto time) on the date that is five years following the closing of the Offering, subject to adjustment in certain events. The Warrants will include an acceleration provision, exercisable at the Company’s option, if the Company’s daily volume weighted average share price is greater than $22.40 for five consecutive trading days.

The Offering is being conducted on a best efforts basis by a syndicate of agents (the “Agents”) led by Raymond James Ltd., as lead agent and sole bookrunner, together with BMO Nesbitt Burns Inc. and Canaccord Genuity Corp.

The Company has granted the Agents an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, at the sole discretion of the Agents, at any time up to 30 days following the closing of the Offering, to purchase up to an additional number of Units equal to 15% of the Units sold pursuant to the Offering (the “Agents’ Option Units”) at a price of $8.00 per Agents’ Option Unit to cover the Agents’ over-allocation position, if any, and for market stabilization purposes.

The closing of the Offering is expected to occur on or about March 9, 2021 (the “Closing Date”) and is subject to customary closing conditions, including the receipt of all necessary regulatory approvals. The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of both the Common Shares and the Warrants under the symbols “EPRX” and “EPRX.WT”, respectively. Listing is subject to the Company fulfilling all of the requirements of the TSX on or before May 25, 2021, including distribution of these securities to a minimum number of public shareholders.

No securities regulatory authority has either approved or disapproved of the contents of this press release. The Common Shares, Warrants and Warrant Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the Common Shares, Warrants and Warrant Shares may not be offered or sold, directly or indirectly, in the United States, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful

About Eupraxia

Eupraxia is a clinical-stage biotechnology company focused on the development of locally delivered, extended-release alternatives to currently approved drugs. Each of Eupraxia’s product candidates has the potential to address therapeutic areas with high unmet medical need, and strives to provide improved patient benefit by delivering targeted, long-lasting activity with fewer side effects.

Eupraxia’s lead product candidate, EP-104IAR, is currently in Phase 2 development for the treatment of pain due to osteoarthritis of the knee. In addition to EP-104IAR, Eupraxia is developing a pipeline of earlier-stage long-acting formulations. Potential pipeline candidates include a range of drugs for indications such as post-surgical pain (EP-105), and post-surgical site infections (EP-201), each designed to improve on the activity and tolerability of approved drugs. Eupraxia is also developing a formulation of EP-104IAR for use in canine and equine osteoarthritis.

NSOURCE Eupraxia Pharmaceuticals Inc.

For further information: For media inquiries, please contact: Vik Peck, Eupraxia Pharmaceuticals Inc., 250.590.3968 ext. 508,; For investor inquiries, please contact: Adam Peeler, on behalf of: Eupraxia Pharmaceuticals Inc., 416.427.1235,

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Mathieu Litalien

About the author

Mathieu is an individual investor and has been investing part-time for the better part of the past 20 years. He is primarily interested in fundamental analysis, focusing on the long-term and his portfolio is composed primarily of dividend-paying equities. Mathieu has a moderate risk profile and also looks for growth and value. His passion for finance and the markets have led him to his MBA and writing for Seeking Alpha and Stocktrades. Mathieu also focuses primarily on stock research and content production for Premium and the Stocktrades blog.