SCHEDULE: Baker Bros. Boosts Celcuity Stake Flexibility to 19.99%

Baker Bros. Advisors increased its beneficial ownership limitation in Celcuity Inc. from 4.99% to 19.99% for certain prefunded warrants, signaling potential for increased influence.

Summary

• Baker Bros. Advisors LP and its affiliates (the "Reporting Persons") filed an Amendment No. 1 to Schedule 13D for Celcuity Inc. (the "Issuer").
• The Reporting Persons submitted written notice to Celcuity Inc. on March 20, 2026, to increase the beneficial ownership limitation (the "Maximum Percentage") from 4.99% to 19.99% for 481,437 and 5,666,350 prefunded warrants held by 667, L.P. and Baker Brothers Life Sciences, L.P., respectively.
• The increase in the Maximum Percentage will become effective on May 20, 2026.
• As a result of this change, the Reporting Persons may be deemed to beneficially own up to 19.99% of Celcuity Inc.'s outstanding Common Stock.
• The aggregate amount beneficially owned by each reporting person is 9,582,874 shares, representing 19.99% of the class.
• This beneficial ownership is based on 46,271,259 shares of Common Stock outstanding as of November 6, 2025, plus 1,667,082 shares underlying $0.001 Prefunded Warrants exercisable within 60 days.
• The Reporting Persons hold 7,915,792 shares of Common Stock, 6,147,787 $0.001 Prefunded Warrants, and $30,750,000 in 2.75% Convertible Notes.
• The 2.75% Convertible Notes are currently subject to a 4.99% beneficial ownership limitation, preventing their conversion, but this limitation can also be increased to 19.99% with 61 days' notice.
• The Reporting Persons did not acquire any additional securities in connection with this specific increase in the Maximum Percentage.
• The Funds hold securities for investment purposes and may purchase additional securities or dispose of them based on various factors, including business prospects and market conditions.
• Reporting Persons may discuss items of mutual interest with the Issuer's management and other investors, potentially including financing suggestions.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as a significant institutional investor is increasing its flexibility to own a larger stake, signaling continued confidence, though it's a procedural rather than an immediate operational win.

Positives

• A significant institutional investor, Baker Bros. Advisors, is increasing its flexibility to own a larger stake (up to 19.99%) in Celcuity Inc., indicating continued confidence in the company's long-term prospects.
• The ability to exercise a substantial number of prefunded warrants (6,147,787) up to the new 19.99% limit provides a clear path for increased ownership without immediate market purchases.
• The Reporting Persons' stated intention to hold securities for investment purposes suggests a long-term strategic interest rather than short-term speculation.

Negatives

• The 2.75% Convertible Notes, with a principal amount of $30,750,000, are currently subject to a 4.99% beneficial ownership limitation, preventing their conversion into common stock.
• Any increase in the beneficial ownership limitation for the convertible notes would also require a 61-day waiting period, similar to the warrants.

Risks

• The Reporting Persons may change their present intentions and could acquire additional securities or dispose of some or all of their holdings, which could impact the stock price.
• While currently not having plans for extraordinary corporate transactions, the Reporting Persons may assess whether to make suggestions to management regarding financing or other strategic matters, potentially leading to changes in company direction.

Future Outlook

The Reporting Persons hold securities for investment purposes and may purchase additional securities or dispose of existing holdings in varying amounts and at varying times. They may also engage in discussions with Celcuity Inc.'s management and other investors, potentially offering suggestions regarding financing or other strategic matters. There are no current plans for extraordinary corporate transactions.

Industry Context

StockSavvy.ai notes that Baker Bros. Advisors is a prominent healthcare-focused investment firm known for taking significant stakes in biotechnology and pharmaceutical companies. Their increased flexibility to own a larger portion of Celcuity Inc., a company likely in the biotech or healthcare sector given the investor, suggests a strategic long-term view on Celcuity's potential within its niche. This move aligns with a trend of specialized funds taking active roles in their portfolio companies to drive value.

Comparison to Industry Standards

• Baker Bros. Advisors' strategy of taking substantial, often influential, stakes in biotech companies is a common practice among specialized healthcare funds, similar to firms like Orbimed Advisors or Perceptive Advisors. For instance, Orbimed has historically taken significant positions in emerging biotechs like Reata Pharmaceuticals or Mirati Therapeutics, often exceeding 10% ownership.
• The increase to a 19.99% beneficial ownership limit is a strategic threshold, as exceeding 20% often triggers more stringent accounting requirements (equity method) and regulatory scrutiny, which many institutional investors prefer to avoid while still maintaining significant influence. This is a standard approach seen in many Schedule 13D filings where investors seek influence without full control.
• The holding of both common stock, prefunded warrants, and convertible notes is a diversified approach to equity exposure, common among sophisticated investors seeking to manage risk and optimize entry points, similar to how funds might hold a mix of equity and debt instruments in companies like Moderna or BioNTech during their growth phases.

Stakeholder Impact

• Shareholders: The increased flexibility for a major investor to acquire more shares could be seen as a vote of confidence, potentially stabilizing or boosting share price. However, future dispositions could have the opposite effect.
• Management: The Reporting Persons may engage in discussions and make suggestions regarding financing and other strategic matters, potentially influencing corporate direction.

Next Steps

• The increase in the Maximum Percentage for prefunded warrants will become effective on May 20, 2026.
• Reporting Persons may purchase additional securities or dispose of securities in the future.
• Reporting Persons may discuss items of mutual interest with Celcuity Inc.'s management and other investors.
• Reporting Persons may assess whether to make suggestions to management regarding financing.

Key Dates

Recommendation

A major institutional investor increasing its beneficial ownership flexibility is generally a positive signal, indicating long-term interest and confidence. However, this filing is primarily procedural, granting flexibility rather not announcing an immediate, large-scale acquisition or a significant operational development. It suggests a 'hold' for existing investors, as it reinforces the investment thesis without providing new, immediate catalysts for a 'buy' or 'strong buy' recommendation. New investors might consider a 'buy' on the strength of institutional backing, but the filing itself doesn't present a compelling new entry point.

Keywords

Celcuity Inc., Baker Bros. Advisors, Schedule 13D, Beneficial Ownership, Prefunded Warrants, Convertible Notes, Institutional Investment, Biotechnology, Healthcare Investment, Equity Stake