Vaxcyte, Inc. Announces New \$500 Million At-the-Market Equity Offering Agreement

Key Highlights

• Vaxcyte, Inc. (NASDAQ: PCVX) enters a new Sales Agreement with Leerink Partners LLC for an at-the-market (ATM) equity offering program.
• The program allows Vaxcyte to sell up to \$500,000,000 in common stock, from time to time, at prevailing market prices.
• The new agreement supersedes and terminates the previously arranged Open Market Sale Agreement with Jefferies LLC, under which Vaxcyte raised approximately \$270.3 million.
• The ATM program offers flexibility, enabling the company to raise capital as needed, depending on market conditions and corporate funding requirements.
• The shares to be sold under this program have been registered under a shelf registration statement (Form S-3ASR, File No. 333-279735) filed on May 24, 2024.
• Legal opinion provided by Skadden, Arps, Slate, Meagher & Flom LLP confirms the validity of the shares to be issued.

Investor Details & Potential Price-Sensitive Information

• Vaxcyte is not obligated to sell any shares under the new agreement, and Leerink Partners is not obligated to purchase any shares unless and until the company delivers a sale notice.
• There is no guarantee that shares will be sold, or at what price or quantity. Actual sales will depend on market conditions and company discretion.
• The company has made standard representations, warranties, and indemnifications to Leerink Partners, including indemnifying the agent against certain liabilities under the Securities Act.
• The new ATM program provides the company with a significant source of capital and financial flexibility for advancing corporate objectives, including research and development, clinical trials, and general corporate purposes.
• The company’s common stock remains listed on The Nasdaq Stock Market under the symbol “PCVX.”
• Termination of the previous ATM program with Jefferies LLC may signal a shift in capital-raising strategy and preferred banking relationships, which could be of interest to shareholders observing changes in the company’s financial management approach.
• As of the new agreement, Vaxcyte does not qualify as an “emerging growth company” under SEC rules, which may affect certain regulatory requirements and disclosures going forward.

Implications for Shareholders

• Potential Share Dilution: If Vaxcyte fully utilizes the ATM facility, up to \$500 million in new shares could be issued, which may dilute existing shareholders’ equity.
• Increased Financial Flexibility: The ability to raise significant funds on an as-needed basis could support ongoing product development, clinical trials, and potential commercial launches, enhancing the company’s long-term prospects.
• Market Impact: The announcement of a large ATM program can influence share price both positively (due to increased liquidity and funding strength) and negatively (due to dilution concerns). Shareholders should monitor subsequent disclosures on actual share issuance and proceeds raised.
• No Immediate Share Issuance: The agreement itself does not result in immediate dilution; shares will only be sold as determined by management.
• Vaxcyte’s representations and warranties, as well as the legal opinions filed, reinforce the compliance and legitimacy of the offering, reducing legal and regulatory risk for investors.

Summary

Vaxcyte, Inc. has entered into a new at-the-market equity offering agreement with Leerink Partners LLC, enabling the company to raise up to \$500 million by selling shares of common stock at prevailing market prices. This move replaces a previous ATM facility with Jefferies LLC, under which \$270.3 million had been raised. The new agreement provides Vaxcyte with enhanced flexibility to fund its operations and growth initiatives while offering transparency and regulatory compliance to investors. Shareholders should be aware of potential dilution, the strategic shift in banking partners, and the impact such a sizable ATM program could have on the company’s share price and financial outlook.

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