Opexa Therapeutics, Inc. (NASDAQ:OPXA), a biotechnology company developing a novel T-cell therapy for multiple sclerosis (MS), announced the closing of a private offering of convertible secured promissory notes and warrants to purchase shares of common stock for gross proceeds of approximately $4 million. Opexa expects to use proceeds from the financing to commence its planned Phase IIb clinical study of Tcelna™ in patients with Secondary Progressive MS (SP-MS). Participating in the financing were new investors and existing shareholders, including members of Opexa’s Board of Directors.

“We are grateful for the support of our existing shareholders and their continued belief in the Company, along with the new investors who have joined this offering,” commented Neil K. Warma, Opexa’s President and CEO. “This capital should allow us to commence our planned Phase IIb clinical trial in SP-MS patients following the final review of our CMC submission by the FDA, which is expected shortly. The enthusiasm that has been generated by the MS community anticipating the start of this trial has been remarkable. It is a testament to what we believe is the true potential of the novel therapy we are developing and the impact it could have in addressing the significant unmet need of MS patients.”

Mr. Warma added, “Initiating the trial will be a key milestone for the Company, allowing us to implement the many improvements we have made to the manufacturing process and clinical trial design. This financing should allow us to make meaningful progress with patient recruitment as well as continue to advance ongoing discussions with potential partners. Our planned clinical trial is expected to involve 180 patients, each receiving two annual courses of Tcelna treatment, with each course consisting of five subcutaneous injections per year. In order to continue the clinical study once commenced, we will need to secure a substantial amount of additional financing through a potential partnership or additional capital raises, or both.”

The notes mature on July 25, 2014 and accrue interest at the rate of 12% per annum, compounded annually. Interest is payable semi-annually in either cash or registered shares of common stock at the Company’s election. The notes are secured by substantially all of the Company’s assets and are convertible into a new series of non-voting Convertible Preferred Stock. The notes can be converted at the option of the investors, subject to certain limitations and adjustments. Additionally, the Company can elect to convert the notes if (i) the Company’s common stock closes at or above $2.50 per share for 20 consecutive trading days or (ii) the Company achieves certain additional funding milestones to continue its clinical trial program.

The Convertible Preferred Stock accrues dividends at the rate of 8% per annum, which are cumulative and payable semi-annually in either cash or registered shares of the common stock at the Company’s election. The Convertible Preferred Stock is convertible into shares of the Company’s common stock at the option of the investors at a price of $0.80 per share, subject to certain limitations and adjustments. Additionally, the Company can elect to convert the Convertible Preferred Stock if Opexa’s common stock closes at or above $4.00 per share for 20 consecutive trading days.

The warrants have an exercise price of $1.25 per share, a five-year term, and are exercisable for 75% of the number of shares of common stock into which the notes are ultimately convertible, subject to certain limitations and adjustments. The Company can redeem the warrants at $0.01 per share if the Company’s common stock closes at or above $2.50 per share for 20 consecutive trading days.

A portion of the funds will be maintained in a controlled account as part of the security interest granted by the Company to the investors. The Company committed to file a registration statement to register the underlying shares of common stock as soon as practicable.

About Opexa

Opexa Therapeutics, Inc. is dedicated to the development of patient-specific cellular therapies for the treatment of autoimmune diseases such as MS. The Company’s leading therapy, TcelnaTM, a personalized cellular immunotherapy treatment, is in clinical development targeting both SP-MS and Relapsing Remitting MS. Tcelna is derived from T-cells isolated from peripheral blood, expanded ex vivo and reintroduced into the patients via subcutaneous injections. This process triggers a potent immune response against specific subsets of autoreactive T-cells known to attack myelin and, thereby, reduces the risk of relapse over time.

For more information, visit the Company’s website at www.opexatherapeutics.com.