| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 5, 2024, Akero Therapeutics, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Jefferies LLC, and Evercore Group L.L.C. as representatives of the several underwriters named therein (the “Underwriters”) pursuant to which the Company agreed to issue and sell 11,000,000 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 $29.00 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 1,650,000 shares of Common Stock at the same price per share. The Offering is expected to close on or about March 8, 2024, subject to customary closing conditions.
The net proceeds to the Company from the Offering are expected to be approximately $299.4 million after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, or approximately $344.4 million if the underwriters exercise their option to purchase additional shares from the Company in full. The Company intends to use the net proceeds from the Offering, together with its existing cash, cash equivalents and marketable securities and committed capital assuming the closing of the Offering, to continue to advance the clinical development of efruxifermin (“EFX”), including the Company’s ongoing Phase 2b HARMONY, Phase 3 SYNCHRONY Histology, and Phase 3 SYNCHRONY Real-World studies, manufacture of drug product, and the Company’s Phase 3 SYNCHRONY Outcomes study, 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 committed capital assuming the closing of the Offering, 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 committed capital assuming the closing of the Offering will be sufficient to fund its current operating plan into 2027.
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 March 4, 2024 and a final prospectus supplement dated March 5, 2024.
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 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.
