Evofem Biosciences (NASDAQ: EVFM), a small-cap biopharmaceutical company that focuses on developing products to address women's reproductive health needs, is plunging on the stock market on Wednesday, following the company's announcement of the pricing of a public offering of common stock after the market closed on Tuesday. Shares of Evofem Biosciences are down by 25.1% as of 11:17 a.m. EDT today.
Evofem Biosciences intends to raise about $100 million via this public offering of common stock by selling 28.5 million at $3.50 a share. The company also gave underwriters the option to purchase an additional 4.275 million shares within 30 days. Note that before Evofem Biosciences announced the pricing of this public offering, its shares were going for approximately $6 apiece. Now, the company's stock price has dropped to about $3.46 apiece. With this public offering set to dilute Evofem Biosciences' existing shareholders, it's little wonder that investors aren't too happy.
Evofem Biosciences' stock has been volatile all year long, but the company recently received some great news. In late May, the Food and Drug Administration (FDA) approved Evofem's Phexxi, a prescription gel for the prevention of pregnancy. The healthcare company may be raising more funds to help launch its only FDA-approved product on the market, especially considering that as of March 31, Evofem only had $10.3 million in unrestricted cash and short-term investments. Evofem will likely remain highly volatile moving forward, but risk-tolerant investors will want to keep an eye on this one.