Shares of Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) got off to a rocky start this morning, falling more than 8% before the market digested the details of a recently announced share offering. The stock has since reversed course and was up about 12.7% at 3:01 p.m. EDT on Wednesday.
This biotech stock surged earlier this week when the FDA announced it would not require an advisory committee meeting to complete its review of Tavalisse for treatment of immune thrombocytopenic purpura (ITP). The company will need to assemble a sales force if the Agency greenlights the drug, and yesterday's secondary offering announcement wasn't unexpected.
As is usually the case, the stock started slipping as investors had no idea just how many shares the company intended to sell to raise "up to $40 million" in a public offering. The stock reversed course and headed higher once investors got their hands on a regulatory filing that assumes a public offering price of $3.37 per share, the stock's price at Monday's close.
According to Rigel, the company's outstanding share count will rise from 123.8 million at the end of June up to 137.5 million if the offering's underwriters purchase additional shares. That's a lot less dilution than investors had braced for, and it will beef up the company's dwindling cash balance that stood at just $82.3 million at the end of June.