Shares in biotech company Nektar Therapeutics (NASDAQ:NKTR) slipped 10.15% on Tuesday after the company announced a secondary offering of newly issued common stock worth $175 million.
The stock closed at $14.08 with 3.52 million shares changing hands, nearly thrice the average volume of 1.22 million shares.
The fully underwritten offering would be managed by JP Morgan as the sole book running manager. The underwriters have an option to purchase an additional $26.25 million worth of shares of common stock.
Shareholders give the thumbs down to Nektar Therapeutics (NASDAQ:NKTR) equity dilution
Though the company said it would use the proceeds from the offering for general corporate purposes, including research and development and working capital, investors voted with their feet on the proposal and pressed the sell button fearing the dilutive effect on the equity.
This morning, the company announced that it had priced the issue of 13 million shares of its common stock at $13.50 per share. Underwriters have a 30 day option to purchase an additional 1.95 million shares at the same price.
At the time of writing, Nektar shares are trading pre-market at $13.70, down 2.70%.
Nektar Therapeutics (NASDAQ:NKTR) in partnership with Bristol-Myers Squibb Company (NYSE:BMY)
Late last month, the company announced its collaboration with Bristol-Myers Squibb Co for the evaluation of the latter’s Opdivo (nivolumab) with Nektar’s investigational medicine, NKTR-214, as a potential combination treatment regimen in five tumor types and seven potential indications.
“We are excited to explore the potential benefits in multiple types of cancer of the combination of Opdivo with Nektar’s innovative cancer immunotherapy,” said Fouad Namouni, M.D., Head of Oncology, Bristol-Myers Squibb. “We believe that a combination regimen which utilizes two different and complementary mechanisms designed to harness the body’s own immune system to fight cancer has the potential to provide new treatment options for patients.”
The two companies will equally share costs of the combined therapy trials.
Brean initiates coverage of Nektar Therapeutics (NASDAQ:NKTR)
Analysts at Brean Capital on September 30 resumed coverage of Nektar Therapeutics with a buy rating and a price target of $23.