| Item 1.01. | Entry into a Material Definitive Agreement. |
On September 14, 2022, Akero Therapeutics, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Jefferies LLC, as representatives of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell 7,692,308 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), to the Underwriters at a public offering price of $26.00 per share (the “Offering”). Under the terms of the Underwriting Agreement, the Company also granted the Underwriters an option exercisable for 30 days to purchase up to an additional 1,153,846 shares of Common Stock at the same price per share, which was exercised in full on September 15, 2022. The Offering is expected to close on September 19, 2022, subject to customary closing conditions.
The net proceeds to the Company from the Offering are expected to be approximately $215.8 million after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, including the full exercise by the Underwriters of their option to purchase additional shares from the Company. The Company intends to use the net proceeds from the Offering, together with its existing cash, cash equivalents and marketable securities and potentially funds available under its agreement with Hercules Capital, Inc., to continue to advance the clinical development of 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 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 and potentially funds available under its agreement with Hercules Capital, Inc., 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 Company believes that the net proceeds from this offering, together with its cash, cash equivalents and marketable securities and potentially funds available under its agreement with Hercules Capital, Inc. will be sufficient to fund its current operating plan into 2025.
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, and a related prospectus included in the Registration Statement, as supplemented by a preliminary prospectus supplement dated September 14, 2022 and a final prospectus supplement dated September 14, 2022.
The Underwriting Agreement contains customary representations, warranties and covenants of the Company and also provides for customary indemnification obligations of the Company and the Underwriters, 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
