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What happened:

Shares of Lantheus (LNTH 2.84%) were down almost 20% at 3:10 p.m. EDT Friday after the company announced Thursday after the closing bell that it plans to sell 5.2 million shares in a secondary offering.

So what:

Lantheus, which makes diagnostic medical imaging agents, says it will use the proceeds from the stock offering to pay down approximately $55 million of the $365 million it owes on a senior secured loan.

The deal hasn't priced yet, but with the shares now trading at less than $8 per share, selling 5.2 million shares wouldn't net Lantheus $55 million, so it would have to use some of its current cash if it wants to make that large a pre-payment on its loan. The company ended the second quarter with almost $55 million in the bank, and it's cash flow positive, so kicking in a little of its own nest egg shouldn't be too difficult.

Lantheus' share price fell on the news because, of course, after the secondary offering its current shareholders will own a smaller piece of the pie. The fact that the price of the secondary offering hasn't been disclosed yet also isn't helping. If institutional investors were interested in snapping up shares of the company, Lantheus' investment bankers could have gotten the deal done before the market opened today.

Now what:

Lantheus has been trading well above the $6 price it IPOed at last year, so selling additional shares seems like a good move by management. Sure, current shareholders will own less of the company after the offering, but paying down debt will save it money it would have otherwise burned on interest.

As they say, "raise when you can, not when you have to." And Lantheus certainly didn't have to. The company isn't required to pay off a majority of the debt until 2022.