Orphan lung disease company Savara Inc (Nasdaq:SVRA) revealed on Friday that is expects gross proceeds of about USD26.8m before deducting placement agent fees and estimated offering expenses under a private placement with institutional investors.

Under the private placement, the company will purchase 9,569,430 shares of common stock and, in lieu of shares of common stock, pre-funded warrants to purchase an aggregate of 5,780,537 shares of common stock and accompanying milestone warrants to purchase an aggregate of up to 32,577,209 additional shares of common stock at a price of USD1.745 per share and accompanying milestone warrant.

If the milestone warrants are exercised in full, the company would receive additional gross proceeds of USD48.2m, resulting in total transaction gross proceeds of USD75.0m, in each case before deducting placement agent fees and estimated offering expenses.

In connection with the closing, Ricky Sun, PhD of Bain Capital Life Sciences is expected to join the Savara board.

Net proceeds from the transaction are expected to be used by the company to fund a new clinical trial of Molgradex for the treatment of autoimmune pulmonary alveolar proteinosis (aPAP) as well as for other general corporate purposes.

Jefferies and Evercore ISI are acting as placement agents to the company in connection with the private placement.