DBV Technologies S.A. (DBVT 0.41%), a clinical-stage food allergy company, is having a tough go of it today. The company's shares are down by a hefty 13.3% on over six times the average daily volume, as of 11:39 a.m. EST.
What's causing investors to run for the exits this morning? Before the opening bell, DBV Technologies announced a sizable global offering of its stock. The offering will reportedly yield gross proceeds of $153.7 million for the company upon closing. DBV Technologies said that the offering should close on Feb. 4, 2020.
Investors probably shouldn't be too shocked over this substantial capital raise. DBV Technologies, after all, is busy gearing up for the potential launch of its peanut allergy medication dubbed Viaskin Peanut. Unfortunately, the company didn't have nearly enough cash to fund a commercial launch, resulting in today's noteworthy capital raise. Per the press release, DBV Technologies said the funds from this stock sale should extend its cash runway until the first quarter of 2021. That's not exactly an extensive cash runway, however, meaning another capital raise could happen before year's end.
Is this double-digit drop in DBV Technologies' share price a buying opportunity? If Viaskin Peanut lives up to some of Wall Street's more optimistic sales projections that presently stand at over $2.2 billion, then the answer is a resounding yes. The company's market cap, after all, is currently less than half of this peak sales forecast. That said, the company will likely have to tap the public markets yet again well before this product starts to become a viable cash cow. As such, this small-cap biopharma stock is arguably best viewed as a intriguing watch list candidate for the time being.