Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of TG Therapeutics (NASDAQ:TGTX), a clinical-stage biopharmaceutical company focused on developing therapies to treat cancer, jumped as much as 17% after announcing the sale of common stock to a single institutional investor after the closing bell last night.
So what: According to the press release from TG Therapeutics, it sold 2,702,809 shares of common stock at $6.71 (yesterday's closing price) to JPMorgan Asset Management's Global Healthcare Fund. The gross proceeds from the underwritten sale are approximately $18.1 million, which the company plans on using to fund the clinical development of TG-1101, a monoclonal antibody geared at treating B-cell proliferative disorders, and TGR-1202, a PI3K delta inhibitor that's being targeted at single-agent heme malignancies, as well as for general corporate purposes. The offering is expected to close on or before March 17.
Now what: Normally you don't see companies rally when they issue common stock, but given that shares are being underwritten at yesterday's closing price, it demonstrates that there's demand for the shares. In addition, the simple fact that one institutional fund is purchasing $18 million worth of TG Therapeutics has to be encouraging from a shareholder perspective. Including gross proceeds, this underwritten sale should move TG Therapeutics to around $68 million in cash on hand. I still would urge caution from shareholders, though, as TG Therapeutics' pipeline is fairly young and small. The aforementioned two experimental therapies represent the sum of its current studies, and only TG-1101 has completed its phase 1 study where it was deemed safe and early clinical activity was noted. I would suggest waiting for much more concrete data before diving into TG Therapeutics.
TG Therapeutics shares may be rocketing higher, but chances are it'll have a hard time keeping up with this top stock in 2014
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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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