Item 1.01. Entry into a Material Definitive Agreement.
On May 16, 2023, Akero Therapeutics, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Jefferies LLC, as representative of the several underwriters named therein (the “Underwriter”), pursuant to which the Company agreed to issue and sell 5,238,500 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), to the Underwriter in an underwritten offering at an offering price of $42.00 per share, before deducting underwriting discounts and commissions (the “Offering”). The Offering is expected to close on May 19, 2023, subject to customary closing conditions.
The net proceeds to the Company from the Offering are expected to be approximately $210.9 million after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering, together with its existing cash, cash equivalents and marketable securities, to continue to advance the clinical development of efruxifermin (“EFX”), including the Company’s ongoing Phase 2b HARMONY trial, its ongoing Phase 2b SYMMETRY trial, an expansion cohort of the SYMMETRY trial, manufacture of drug product for Phase 3 clinical trials, and initiation of its planned Phase 3 SYNCHRONY clinical trial program, with the remainder for working capital and other general corporate purposes. The Company may also use a portion of its net proceeds, together with its existing cash, cash equivalents and marketable securities, to develop, co-develop, acquire or invest in products that are complementary to EFX to expand its pipeline. However, the Company currently does not have any agreements or commitments to complete any such transaction.
The Offering was made pursuant to the Company’s Registration Statement on Form S-3ASR (File No. 333-256229) (the “Registration Statement”), which was previously filed with the Securities and Exchange Commission and automatically became effective on May 18, 2021, as supplemented by a prospectus supplement dated May 16, 2023.
The Underwriting Agreement contains customary representations, warranties and covenants of the Company and also provides for customary indemnification obligations of the Company and the Underwriter, including for liabilities under the Securities Act of 1933, as amended. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates and were solely for the benefit of the parties to such agreement. The foregoing summary of the Underwriting Agreement is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1 and incorporated herein by reference.
Goodwin Procter LLP, counsel to the Company, delivered an opinion as to legality of the issuance and sale of the Common Stock in the Offering, a copy of which is attached hereto as Exhibit 5.1 and is incorporated herein by reference.