Shares of Optinose (NASDAQ:OPTN) were down 14% at 11:47 a.m. EST today after the company priced its previously announced secondary offering at $9.75 per share. On Wednesday, shares closed at $11.41, and with that kind of discount, a decline today was all but inevitable.
Optinose raising additional cash through a secondary offering isn't all that unusual; almost every biotech company needs additional capital beyond venture capital and IPO funding to get to profitability. But Optinose's public offering also included $11.5 million in stock that was sold by what the company refers to as "certain selling stockholders."
It would seem ominous that large shareholders are parting with their holdings, but the move could have more to do with the shareholders than their current view of the company. For example, an original venture-capital investor might have needed to sell the shares to return the capital to the limited partners in the venture capital fund. In that case, selling a large chunk all at once is likely better for shareholders than slowing selling off shares, which could put the valuation under more pressure than a one-time reset.
For the shares it's selling, Optinose will receive net proceeds of approximately $39.0 million, and the underwriters have a 30-day option to purchase about $8 million in additional shares.
With the additional cash in hand, Optinose can concentrate on continuing to sell Xhance, its treatment for nasal polyps. Sales were up 30% year over year in the third quarter, which could accelerate if clinical trials testing Xhance in patients with chronic sinusitis are successful. Data from the first of those trials is expected in the second half of 2021.