Why Chimerix, Inc. Shares Took Off

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 Chimerix (NASDAQ: CMRX  ) , a clinical-stage biopharmaceutical company attempting to develop oral antiviral drugs, rose by as much as 11%, its second double-digit percentage gain over the past six trading sessions, after announcing the completion of its common stock offering.

So what: According to Chimerix's press release, which actually came after the closing bell last night, it offered 8,395,000 shares at $14.22 per share, including a 1,095,000 share option exercised by the underwriters of the deal. All told, the gross proceeds of the transaction equate to $119.4 million for Chimerix. The company plans to use the proceeds to fund its research and development pipeline as well as for general corporate purposes.

Now what: Scratching your head again as Chimerix rallies following a share offering? The big news here is that not only was there strong demand for existing shares, but the underwriters exercised their full overallotment option, giving Chimerix even more gross proceeds in its pocket. The share offering, while dilutive, does give the company a good amount of cash to work with and removes the need for additional capital for the foreseeable future. In addition, the fact that it was able to price its shares at its previous day's closing price (when announced) suggested that demand for shares was high. While I do expect this upside reaction in the share price to be short-lived, I would encourage investors, as I did a week ago today, to keep their eyes closely on brincidofovir, Chimerix's lead antiviral drug. As a possible treatment for cytomegalovirus, this investigational drug could put Chimerix on the map. Ultimately, the success or failure of brincidofovir is really what shareholders should be using to gauge the success of Chimerix.

Chimerix may have soared today, but it's likely going to have a tough time keeping pace with this top stock over the long run
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year, his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252%, and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2974605, ~/Articles/ArticleHandler.aspx, 10/22/2014 8:30:25 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement